Exhibit 10.1


 


[ ], 2021


 


Innovatus Life Sciences Acquisition Corp.

777 Third Avenue, 25th Floor

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 among Innovatus Life Sciences Acquisition Corp., a Delaware corporation (the “Company”), and UBS Securities
LLC as representative (the “Representative”) of the several underwriters (each, an “Underwriter”
and collectively, the “Underwriters”), relating to an underwritten initial public offering (the “Public Offering”),
of up to 20,125,000 shares of the Company’s Class A common stock, par value $0.0001 per share (including 2,625,000 shares of
Class A common stock that may be purchased to cover over-allotments, if any) (the “Class A Common Stock”).
The Class A Common Stock will 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 U.S. Securities and Exchange Commission (the “Commission”)
and the Company has applied to have the Class A Common Stock 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, each of Innovatus Life Sciences Acquisition Sponsor, LLC (the “Sponsor”)
and the undersigned individuals, each of whom is a member of the Company’s board of directors and/or management team (each of the
undersigned individuals, 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 (as defined below) owned by it,
him or her in favor of any proposed Business Combination and (ii) not redeem any shares of Common Stock owned by it, him or her in
connection with such stockholder approval. If the Company seeks to consummate a proposed Business Combination by engaging in a tender
offer, the Sponsor and each Insider agrees that it, he or she will not sell or tender any shares of Common Stock owned by it, him or her
in connection therewith.


 


2.             The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within 24 months
from the closing of the Public Offering, or such later period approved by the Company’s stockholders in accordance with the Company’s
amended and restated certificate of incorporation (as it may be amended from time to time, 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 ten business days thereafter, redeem 100% of the shares of Class A
Common Stock sold 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 (as defined below), including interest earned on the funds held in the Trust Account
and not previously released to the Company (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by
the number of then outstanding Offering Shares, which redemption will completely extinguish all Public Stockholders’ (as defined
below) rights as stockholders (including the right to receive further liquidating distributions, if any), 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, liquidate and dissolve, 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 to not propose any amendment to the
Charter to modify 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 set forth in the Charter or with respect to any other material provisions
relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides its Public Stockholders
with the opportunity to redeem their Offering 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 its taxes, 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, him or her. The Sponsor and each
Insider hereby further waives, with respect to any shares of Common Stock held by it, him or her, if any, any redemption rights it, he
or she may have in connection with (A) 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 (B) a stockholder vote to approve an amendment
to the Charter to modify the substance or timing of the Company’s obligation to redeem 100% of the Offering Shares if the Company
has not consummated a Business Combination within the time period set forth in the Charter or with respect to any other material provisions
relating to stockholders’ rights or pre-initial business combination activity or in the context of a tender offer made by the Company
to purchase Offering Shares (although the Sponsor, the Insiders and their respective affiliates shall be entitled to redemption and liquidation
rights with respect to any Offering Shares it or they hold if the Company fails to consummate a Business Combination within the time period
set forth in the Charter).


 


3.             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 Representative, (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 (the “Exchange Act”), and the rules and regulations of the Commission promulgated
thereunder, with respect to, any shares of Common Stock (including, but not limited to, Founder Shares) or any securities convertible
into, or exercisable, or exchangeable for, shares of Common Stock owned by it, him or her, (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 shares of Common Stock (including,
but not limited to, Founder Shares) or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned
by it, him or her, 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). Each of the Insiders and the Sponsor
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 the release or waiver is effected
solely to permit a transfer not for consideration and 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 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 or (ii) any prospective target business with which the Company has entered into a written letter of intent, confidentiality
or other similar agreement or Business Combination 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 or a Target do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Offering
Share and (ii) the actual amount per Offering Share held in the Trust Account as of the date of the liquidation of the Trust Account,
if less than $10.00 per Offering Share is then held in the Trust Account due to reductions in the value of the trust assets, less interest
earned on the Trust Account which may be withdrawn to pay taxes, (y) shall not apply to any claims by a third party or a Target which
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.


 






     


     


    

 


5.             To
the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 2,625,000 shares of Common
Stock within 45 days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees to forfeit, at no
cost, a number of Founder Shares in the aggregate equal to 656,250 multiplied by a fraction, (i) the numerator of which is 2,625,000
minus the number of shares of Common Stock purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the
denominator of which is 2,625,000. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full
by the Underwriters so that the Founder Shares will represent an aggregate of 20.0% of the Company’s issued and outstanding shares
of Class A Common Stock after the Public Offering (without giving effect to the issuance of Private Placement Shares (as defined
below)). The Sponsor further agrees 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 share repurchase or share capitalization, as applicable, immediately prior to the
consummation of the Public Offering in such amount as to maintain the ownership of the initial shareholders prior to the Public Offering
at 20.0% of its issued and outstanding Capital Shares upon the consummation of the Public Offering. In connection with such increase or
decrease in the size of the Public Offering, then (A) the references to 2,625,000 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 Public Shares issued in the Public
Offering and (B) the reference to 656,250 in the formula set forth in the first sentence of this paragraph shall be adjusted to such
number of Founder Shares that the Sponsor would have to surrender to the Company in order for the initial shareholders to hold an aggregate
of 20.0% of the Company’s issued and outstanding shares of Class A Common Stock after the Public Offering.


 


6.             The
Sponsor and each Insider hereby agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably injured in
the event of a breach by such Sponsor or an Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 7(a), and 7(b), as
applicable, 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 any Founder Shares (or any shares of Class A Common Stock issuable
upon conversion thereof) until the earlier of (A) one year after the completion of the Company’s initial Business Combination
and (B) subsequent to the Business Combination, (x) if the closing price of the Class A 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 the Company’s initial Business Combination or (y) the date
on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results
in all of the Company’s stockholders having the right to exchange their shares of Class A 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 Transfer any Private Placement Shares, until 30 days after the completion
of a Business Combination (the “Private Placement 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 or Private Placement Shares that are held by
the Sponsor, any Insider or any of their permitted transferees (that have complied with this paragraph 7(c)), are permitted (i) to
the Company’s officers or directors, any affiliate or family member of any of the Company’s officers or directors, any members
or partners of the Company’s sponsor or their affiliates, any affiliates of the Company’s sponsor, or any employees of such
affiliates; (ii) in the case of an individual, by gift to a member of such individual’s immediate family or to a trust, the
beneficiary of which is a member of such individual’s immediate family, an affiliate of such individual or to a charitable organization;
(iii) in the case of an individual, by virtue of laws of descent and distribution upon death of such individual; (iv) in the
case of an individual, pursuant to a qualified domestic relations order; (v) by private sales or transfers made in connection with
the consummation of an initial Business Combination at prices no greater than the price at which the securities were originally purchased;
(vi) in the event of the Company’s liquidation prior to the completion of an initial Business Combination; (vii) by virtue
of the laws of the State of Delaware or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor; or (viii) in
the event of the Company’s liquidation, merger, capital stock exchange or other similar transaction which results in all of the
Company’s stockholders having the right to exchange their shares of Class A Common Stock for cash, securities or other property
subsequent to the Company’s completion of an initial Business Combination; provided, however, that in the
case of clauses ‎(i) through ‎(v) or ‎(vii), these permitted transferees must enter into a written agreement with
the Company agreeing to be bound by the transfer restrictions herein and the other restrictions contained in this Agreement (including
provisions relating to voting, the Trust Account and liquidating distributions).


 


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 (including any such information included in the Prospectus) is true and accurate in
all respects and does not omit any material information with respect to the Insider’s background. The Sponsor and each Insider’s
questionnaire furnished to the Company is true and accurate in all respects. The Sponsor and each Insider represents and warrants that:
it, he or she 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; it, he or she 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 it, he or she is not currently a defendant in
any such criminal proceeding.


 


9.             Except
as disclosed in the Prospectus, neither the Sponsor nor any officer, nor any affiliate of the Sponsor or any officer, nor any director
of the Company, shall receive from the Company any finder’s fee, reimbursement, consulting fee, non-cash payments, 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), other than the following, none
of which will be made from the proceeds held in the Trust Account prior to the completion of the initial Business Combination: repayment
of a loan and advances up to an aggregate of $300,000 made to the Company by the Sponsor; payments to the Sponsor for certain office space,
secretarial and administrative services as may be reasonably required by the Company of $10,000 per month; and 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 an affiliate of the Sponsor or any
of the Company’s officers or directors to finance transaction costs in connection with an intended initial Business Combination,
provided, that, if the Company does not consummate an initial 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 proceeds from the Trust Account are used for such
repayment. Up to $1,500,000 of such loans may be convertible into shares at a price of $10.00 per share at the option of the lender. Such
shares would be identical to the Private Placement Shares, including as to exercise price, exercisability and exercise period.


 


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 an officer and/or director on the board of directors of the Company and hereby consents to being named in the Prospectus as
an officer and/or director of the Company.


 






     


     


    

 


11.             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; (ii) “Common
Stock” shall mean the Class A common stock and Class B common stock; (iii) “Founder Shares”
shall mean the 5,031,250 shares of Class B common stock issued and outstanding (up to 656,250 Shares of which are subject to complete
or partial forfeiture if the over-allotment option is not exercised by the Underwriters); (iv) “Initial Stockholders”
shall mean the Sponsor and any Insider that holds Founder Shares; (v) “Private Placement Shares” shall mean the
up to 585,000 private placement shares of Class A Common Stock (or up to 637,500 shares of Class A Common Stock if the underwriters’
over-allotment option is exercised in full) that the Sponsor has agreed to purchase at a price of $10.00 per share in a private placement
that shall occur simultaneously with the consummation of the Public Offering; (vi) “Public Stockholders” shall
mean the holders of securities issued in the Public Offering; (vii) “Trust Account” shall mean the trust fund
into which a portion of the net proceeds of the Public Offering and the sale of the Private Placement Shares shall be deposited; and (viii) “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 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).


 


12.             The
Company will maintain an insurance policy or policies providing directors’ and officers’ liability insurance, and each Director
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.


 


13.             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.


 


14.             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 and each
Insider and their respective successors, heirs and assigns and permitted transferees.


 


15.             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.


 


16.             This
Letter Agreement may be executed in any number of original or facsimile 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.


 


17.             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.


 


18.             This
Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. 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.


 






     


     


    

 


19.             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.


 


20.             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, 2021; provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.


 


21.             This
Company, the Sponsor and each Insider hereby acknowledges that the Representative on behalf of the Underwriters is a third party beneficiary
of this Letter Agreement.


 


[Signature Page Follows]


 






     


     


    

 


	 	
    Sincerely,

     

    Innovatus Life Sciences
    Acquisition Sponsor, LLC

	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


	 	 
	 	David Schiff
	 	 
	 	Andrew Hobson
	 	 
	 	Claes Ekstrom
	 	 
	 	Luis Diaz
	 	 
	 	Geoffrey Duyk
	 	 
	 	R. Erik Holmlin
	 	 


 


	
     

    Acknowledged and Agreed:

     

    INNOVATUS LIFE SCIENCES ACQUISITION CORP.

     

	By:	 	 
	 	Name: David Schiff	 
	 	Title: Chief Executive Officer	 


 


[Signature Page to Letter Agreement]