Exhibit 10.1


 


February 10, 2022


 


HNR Acquisition Corp


3730 Kirby Drive, Suite 1200


Houston, TX 77098


 


Re: Initial Public Offering


 


Gentlemen:


 


This letter agreement (this
“Letter Agreement”) is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting
Agreement”) to be entered into by and among HNR Acquisition Corp, a Delaware corporation (the “Company”),
and EF Hutton, division of Benchmark Investments, LLC, as 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 8,625,000 of the Company’s units (including up to 1,125,000 units that may be purchased to cover
over-allotments, if any) (the “Units”), each comprised of one share of the Company’s common stock, par
value $0.0001 per share (the “Common Stock”), and one redeemable warrant. Each warrant (each, a “Warrant”)
entitles the holder thereof to purchase three quarters of one share of Common Stock 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 prospectus (the “Prospectus”)
filed by the Company with the Securities and Exchange Commission (the “Commission”) and the Units have been
approved to be listed on NYSE American. 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, HNRAC Sponsors LLC (the “Sponsor”),
each of the undersigned transferees of Founder Shares (each, a “Transferee”), and each of the undersigned persons,
each of whom is a member of the Company’s board of directors and/or management team (each, an “Insider”
and collectively, the “Insiders”), hereby agrees with the Company as follows:


 


1. The
Initial Stockholders 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 Capital Stock 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 engages in a tender offer in connection with any proposed Business Combination, each Initial Stockholder
and Insider agrees that it, he or she will not seek to sell its, his or her shares of Common Stock to the Company in connection with such
tender offer.


 


2. The Initial
Stockholders and each Insider hereby agree that in the event that the Company fails to consummate a Business Combination within 12
months from the date of the final Prospectus (or otherwise in accordance with the Company’s amended and restated certificate
of incorporation (the “Charter”)), the Initial Stockholders 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, 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 earned on the funds held in the Trust Account
and not previously released to the Company to pay its taxes (which interest shall be net of taxes payable, and less 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’ rights as stockholders of the Company (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 Initial Stockholders and each Insider agree not to propose any amendment to
the Company’s Charter that would modify (i) 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 date of the final Prospectus (or
otherwise in accordance with the Company’s Charter) or (ii) the other provisions relating to stockholders’ rights or
pre-initial business combination activities, 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 (which interest shall be net of amounts released for payment of taxes) divided
by the number of then outstanding Offering Shares. The Initial Stockholders and each Insider each agree to waive its redemption
rights with respect to shares of Capital Stock owned by it in connection with a stockholder vote to approve an amendment to the
Company’s Charter (A) 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 12 months from the date of the final Prospectus or (B) with
respect to any other provision relating to stockholders’ rights or pre-initial business combination activity.


 






     


     


    

 


February 10, 2022


Page 2


 


The Initial Stockholders
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 Initial Stockholders 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 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 Common Stock (although the Initial Stockholder, 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 12 months from the date of the final Prospectus (or otherwise in accordance with the Company’s
Charter)).


 


3. During the period
commencing on the effective date of the Underwriting Agreement and ending on the earlier of (A) 180 days after the completion of the
Business Combination or (B) subsequent to the Business Combination, (x) if the last reported 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 90 days after the 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 Common Stock for cash, securities or other
property, 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 Units, Warrants, shares of Capital Stock 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
Units, Warrants, shares of Capital Stock 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
Initial Stockholders 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 (which for purposes of clarification shall not extend to any other shareholders,
members or managers of the Sponsor) 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 (other than the Company’s independent accountants)
for services rendered or products sold to the Company or (ii) a prospective target business with which the Company has entered into
a letter of intent, confidentiality or other similar agreement for a Business Combination agreement (a
“Target”); provided, however, that such indemnification of the Company by the Sponsor shall
apply only to the extent necessary to ensure that such claims by a third party for services rendered (other than the Company’s
independent public accountants) or products sold to the Company or a Target do not reduce the amount of funds in the Trust Account
to below (i) $10.20 per Offering Share or (ii) such lesser amount per Offering Share held in the Trust Account as of the date of the
liquidation of the Trust Account, due to reductions in the value of the trust assets, in each case, net of the amount of interest
earned on the property in the Trust Account which may be withdrawn to pay taxes, except as to any claims by a third party (including
a Target) 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 Sponsor shall not
be responsible to the extent of any liability for such third-party claims. The Sponsor 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 Sponsor, the Sponsor notifies the Company in writing that it shall undertake such defense.


 



     


     


    

 


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5. To
the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 1,500,000 Units 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 326,250. The forfeiture will be adjusted to the extent that the over-allotment option is not
exercised in full by the Underwriters so that the Initial Stockholders will own an aggregate of approximately 22.48% of the Company’s
issued and outstanding shares of Capital Stock after the Public Offering.


 


6. The
Initial Stockholders 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), 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 Initial Stockholders and each Insider agrees that it, he or she shall not Transfer any Founder Shares until the earlier of (A) 180
days after the completion of the Company’s initial Business Combination or (B) subsequent to the Company’s initial Business
Combination, (x) if 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 90 days
after the consummation of 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 Common Stock for cash, securities or other property (the “Founder Shares Lock-up Period”).


 


(b) The
Initial Stockholders and each Insider agrees that it, he or she shall not Transfer any Private Placement Securities until 30 days after
the completion of a Business Combination (the “Private Securities 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 Securities and shares of Common
Stock issued or issuable upon the exercise of the Private Placement Securities that are held by the Initial Stockholders, any
Insider or any of their permitted transferees (that have complied with this paragraph 7(c)), 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
affiliates of the Initial Stockholders, any members of the Initial Stockholders, or any of their affiliates, officers, directors,
direct and indirect equityholders; (b) in the case of an individual, by gift to a member of the individual’s immediate family,
to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a
charitable organization; (c) in the case of an individual, transfers by virtue of laws of descent and distribution upon death of the
individual; (d) in the case of an individual, transfers 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 shares
were originally purchased; (f) in case of an entity, as a distribution to its partners, shareholders, officers or members upon its
liquidation; and (g) by virtue of the laws of the State of Delaware or the Initial Stockholder’s limited liability company
agreement (or equivalent) upon dissolution of the Initial Stockholder; provided, however, that in the case of clauses (a) through
(g), these permitted transferees must enter into a written agreement agreeing to be bound by the restrictions herein.


 



     


     


    

 


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8. The
Initial Stockholders 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 Initial
Stockholders and each Insider’s questionnaire furnished to the Company is true and accurate in all respects. The Initial Stockholders
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 Initial Stockholders nor any Insider nor any affiliate of the Initial Stockholders 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 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 any loans and advances up to an aggregate of $1,000,000 made to the Company by the Sponsor; payment
to the Sponsor for office space, utilities and secretarial and administrative support for a total of $10,000 per month; reimbursement
for any out-of-pocket expenses related to identifying, investigating and consummating an initial Business Combination; 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 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 or advanced amounts so long as no proceeds from the Trust Account are used for such repayment.
Up to $1,000,000 of any such loans or advances may be convertible into warrants at a price of $1.00 per warrant at the option of the lender.
Such warrants would be identical to the Private Warrants, including as to exercise price, exercisability and exercise period.


 


10. The Initial Stockholders
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 a director of the Company and hereby consents to being named in the Prospectus as an officer and/or a director of
the Company.


 



     


     


    

 


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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) “Capital
Stock” shall mean, collectively, the Common Stock and the Founder Shares; (iii) “Founder Shares”
shall mean the 2,501,250 shares of Common Stock held by the Sponsor and the Transferees (up to an aggregate of 326,250 shares of which
are subject to complete or partial forfeiture by the Sponsor and Transferees if the over- allotment option is not exercised in full by
the Underwriters) and 1,000,000 shares of Common Stock held by Transferee; (iv) “Initial Stockholders” shall
mean the Sponsor, each Transferee and any other holder of Founder Shares immediately prior to the Public Offering; (v) “Private
Placement Securities” shall mean, collectively, the 460,000 private placement units of the Company (“Private
Units”), or up to 505,000 Private Units pro rata to the extent that the over- allotment option in connection with the Public
Offering is exercised, with each Private Unit consisting of (and included in the definition of Private Placement Securities) one share
of Common Stock and one warrant (the a “Private Warrant”) of the Company (including each share of Common Stock
issuable upon exercise of each Private Warrant), each warrant of which shall entitle the Sponsor to purchase three quarters of one share
of Common Stock at an initial exercise price of $11.50, in a private placement transaction occurring simultaneously with the closing of
the Public Offering (and the closing of the over- allotment option, if applicable); (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 Securities shall be deposited;
and (viii) “Transfer” shall mean the (a) sale or assignment 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. 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 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 Initial
Stockholders and each Insider and their respective successors, heirs and assigns and permitted transferees.


 



     


     


    

 


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14. 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.


 


15. 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.


 


16. 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.


 


17. 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 the 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.


 


18. 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.


 


	 	Sincerely,  
	 	 	 
	 	HNR ACQUISITION CORP.
	 	 	 
	 	By:	/s/ Donald Goree
	 	Name: 	Donald Goree
	 	Title:	Chief Executive Officer
	 	 	 
	 	HNRAC SPONSORS, LLC 
	 	 	 
	 	By:	/s/ Donald W. Orr
	 	Name:	Donald W. Orr
	 	Title:	Manager