Exhibit 10.5


 


March [•], 2021


 


GP-Act III Acquisition Corp.

300 Park Avenue, 2nd Floor

New York, New York 10022

United States of America


 


		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 or proposed to be entered into by and between GP-Act III Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and Citigroup Global Markets Inc., as the representative of the several underwriters named therein (the “Underwriters”),
relating to an underwritten initial public offering (the “Public Offering”), of 25,000,000 of the Company’s
units (“Units”) (including up to 3,750,000 Units that may be purchased to cover over-allotments, if any), each
comprised of one Class A ordinary share of the Company, par value $0.0001 per share (each, an “Ordinary Share”),
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 shall 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 Securities and Exchange Commission (the “Commission”). 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 (i) GPIAC II, LLC, a Cayman Islands limited liability company,
and (ii) IDS III LLC, a Delaware limited liability company (each a “Co-Sponsor”), and the other undersigned
persons (each, an “Insider” and collectively, the “Insiders”), hereby agrees with the Company
as follows:


 


1.            
Each Co-Sponsor and each Insider agrees with the Company that if the Company seeks shareholder approval of a proposed Business
Combination, then in connection with such proposed Business Combination, it, he or she shall (i) vote any Shares owned by it, him
or her in favor of any proposed Business Combination (including any proposals recommended by the Company’s board of directors
in connection with such Business Combination) and (ii) not redeem any Shares owned by it, him or her in connection with such shareholder
approval.


 


2.            
Each Co-Sponsor and each Insider hereby agrees with the Company 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
shareholders in accordance with the Company’s amended and restated memorandum and articles of association, as they may be
amended from time to time, each Co-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 (10) business days
thereafter, redeem 100% of the Ordinary Shares 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 (less
up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number
of then issued and outstanding Offering Shares, which redemption will completely extinguish all 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 Company’s
board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to
provide for claims of creditors and the requirements of other applicable law. Each Co-Sponsor and each Insider agrees to not propose
any amendment to the Company’s amended and restated memorandum and articles of association (i) to modify the substance or
timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination
or to redeem 100% of the Offering Shares if the Company does not complete its initial Business Combination within 24 months from
the closing of the Public Offering, or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial
Business Combination activity, unless the Company provides its Public Shareholders 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 taxes payable), divided by the number of then issued and
outstanding Offering Shares.



     


     


    


Each Co-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. Each Co-Sponsor
and each Insider hereby further waives, with respect to any Shares held by it, him or her, if any, any redemption rights it, he
or she may have in connection with (x) the consummation of a Business Combination, including, without limitation, any such
rights available in the context of a shareholder vote to approve such Business Combination or in the context of a tender offer
made by the Company to purchase Ordinary Shares and (y) a shareholder vote to amend the Company’s amended and restated
memorandum and articles of association (i) to modify the substance or timing of the Company’s obligation to allow redemption
in connection with the Company’s initial Business Combination or to redeem 100% of the Offering Shares if the Company does
not complete its initial Business Combination within 24 months from the closing of the Public Offering, or (ii) with respect to
any other provision relating to shareholders’ rights or pre-initial Business Combination activity (although the Co-Sponsors
and the Insiders 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 24 months from the date of the closing of the Public Offering).


 


3.            
Notwithstanding 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, each Co-Sponsor and each Insider shall not, without the
prior written consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge or otherwise dispose of (or enter
into any transaction that is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise)), 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 (“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, Warrants or any securities convertible into, or exercisable, or exchangeable for, Ordinary Shares,
or publicly announce an intention to effect any such transaction; provided, however, that the foregoing does not
apply to the forfeiture of any Founder Shares pursuant to their terms or any transfer of Founder Shares to any current or future
independent director of the company (as long as such current or future independent director transferee is subject to this Letter
Agreement or executes an agreement substantially identical to the terms of this Letter Agreement, as applicable to directors and
officers at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result
of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer). Each of the
Insiders and each of the Co-Sponsors 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.



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4.            
In the event of the liquidation of the Trust Account, each Co-Sponsor (which for purposes of clarification shall not extend
to any other shareholders, members or managers of each Co-Sponsor) agrees, severally and not jointly, 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 (other than the Company’s independent registered public accountants) or products sold to the Company or
(ii) a 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 each Co-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 registered 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) $10.00
per share of the Offering Shares or (ii) such lesser amount per share of the Offering Shares 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 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, each Co-Sponsor shall not be
responsible to the extent of any liability for such third party claims. The Co-Sponsors 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 a Co-Sponsor, the relevant Co-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 3,750,000
(as described in the Prospectus) the undersigned agrees that it shall forfeit, at no cost, on a pro rata basis in accordance with
the percentage of Founder Shares held by it, a number of Founder Shares in the aggregate equal to 937,500 multiplied by a fraction,
(i) the numerator of which is 3,750,000 minus the number of Units purchased by the Underwriters upon the exercise of their over-allotment
option, and (ii) the denominator of which is 3,750,000. All references in this Letter Agreement to Founder Shares of the Company
being forfeited shall take effect as surrenders for no consideration of such Founder Shares as a matter of Cayman Islands law.
The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriters so that
the number of Founder Shares will equal an aggregate of 20.0% of the Company’s issued and outstanding Shares after the Public
Offering. The undersigned further agrees that to the extent that (i) the size of the IPO is increased or decreased and (ii) the
undersigned has either purchased or sold Ordinary Shares or an adjustment to the number of Founder Shares has been effected by
way of a share split, share dividend, reverse share split, contribution back to capital or otherwise, in each case in connection
with such increase or decrease in the size of the IPO, then (A) the references to 3,750,000 in the numerator and denominator of
the formula in the immediately preceding sentence shall be changed to a number equal to 15% of the number of Ordinary Shares included
in the Units issued in the IPO and (B) the reference to 937,500 in the formula set forth in the immediately preceding sentence
shall be adjusted to such number of Ordinary Shares that the undersigned would have to return to the Company in order to hold an
aggregate of 20.0% of the sum of (x) the Company’s issued and outstanding IPO Shares and Founder Shares immediately after
the IPO and (y) the number of Ordinary Shares to be sold pursuant to the forward purchase agreement to be entered into between
the Company and the undersigned (or an affiliate of the undersigned) on or about the date hereof.


 


6.            
Each Co-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 Co-Sponsor or 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 seek 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) Each Co-Sponsor and each Insider agrees that it, he or she shall not Transfer (as defined below) any Founder Shares
(or Ordinary Shares 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 last reported sale price of the Ordinary
Shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, rights issuances, 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 following the completion of the Company’s initial Business Combination
on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results
in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property
(the “Founder Shares Lock-up Period”).



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(b)          
Each Co-Sponsor and each Insider agrees that it, he or she shall not Transfer any Private Placement Warrants (or Ordinary
Shares issued or issuable upon the conversion of the Private Placement Warrants), until 30 days after the completion of a Business
Combination (the “Private Placement Warrants 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
Warrants and Ordinary Shares issued or issuable upon the exercise or conversion of the Private Placement Warrants or the Founder
Shares, are permitted:


 


		(i)	to the Company’s directors or officers, any affiliates or family members of any of the Company’s directors or officers,
any members or partners of either Co-Sponsor or their respective affiliates, or any affiliates of either Co-Sponsor, or any employees
of such affiliates;



 


		(ii)	in the case of an individual, by gift to a member 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 person, or to a charitable organization;



 


		(iii)	in the case of an individual, by virtue of laws of descent and distribution upon death of the individual;



 


		(iv)	in the case of an individual, pursuant to a qualified domestic relations order;



 


		(v)	in the case of a trust by distribution to one or more permissible beneficiaries of such trust;



 


		(vi)	by private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection
with the consummation of the Company’s Business Combination at prices no greater than the price at which the securities were
originally purchased;



 


		(vii)	to the Company for no value for cancellation in connection with the consummation of its initial Business Combination;



 


		(viii)	in the event of the Company’s liquidation prior to the Company’s completion of its initial Business Combination;



 


		(ix)	by virtue of the laws of the Cayman Islands, by virtue of either Co- Sponsor’s memorandum and articles of association
or other constitutional, organizational or formational documents, as amended, upon dissolution of either Co-Sponsor, or by virtue
of the constitutional, organizational or formational documents of a subsidiary of either Co-Sponsor that holds any Private Placement
Warrants or any Ordinary Shares, as the case may be, upon liquidation or dissolution of such subsidiary; and




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		(x)	in the event of the Company’s completion of a liquidation, merger, share exchange, reorganization or other similar transaction
which results in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash, securities
or other property subsequent to the completion of the Company’s initial Business Combination,



 


provided, however, that,
in the case of clauses (i) through (vi), these permitted transferees must enter into a written agreement with the Company agreeing
to be bound by the transfer restrictions in this Agreement.


 


8.            
The Co-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, if any (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 such Insider’s
background. Each Insider’s questionnaire furnished to the Company, if any, is true and accurate in all respects. Each Insider
represents and warrants that: it 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 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 is not currently a defendant
in any such criminal proceeding.


 


9.             
Except as disclosed in the Prospectus, none of either Co-Sponsor, any Insider and any affiliate of either Co-Sponsor or
any Insider and 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: (i) repayment of a loan and advances made to the Company by either Co-Sponsor; (ii) payment
to an affiliate of GPIAC II, LLC of a total of $10,000 per month for office space, administrative and support services; (iii) payment
of customary fees for financial advisory services; (iv) reimbursement for any reasonable out-of-pocket expenses related to identifying,
investigating and completing an initial Business Combination; and (v) repayment of loans, if any, and on such terms as to be determined
by the Company from time to time, made by either Co-Sponsor or an affiliate of either Co-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 warrants at a price of $1.50 per warrant at the option of the
lender. Such warrants would be identical to the Private Placement Warrants.



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10.          
Each Co-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 of the Company.


 


11.          
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; (ii) “Shares”
shall mean, collectively, the Ordinary Shares and the Founder Shares; (iii) “Founder Shares” shall mean the
[•] Class B Ordinary Shares, par value $0.0001 per share, issued and outstanding immediately prior to the consummation
of the Public Offering; (iv) “Initial Shareholders” shall mean each Co-Sponsor and any other person that holds
Founder Shares; (v) “Private Placement Warrants” shall mean the Warrants to purchase an aggregate of 4,666,667
Ordinary Shares of the Company (or up to 5,166,667 Ordinary Shares of the Company depending on the extent to which the Underwriters’
over-allotment option is exercised pursuant to the Underwriting Agreement) that the Co-Sponsors have, severally and not jointly,
agreed to purchase for an aggregate purchase price of $7,000,000 (or up to $7,750,000 depending on the extent to which the Underwriters’
over-allotment option is exercised pursuant to the Underwriting Agreement), or $1.50 per Warrant, in private placements that shall
occur simultaneously with the consummation of the Public Offering, the proportion of which are to be acquired by each Co-Sponsor
as disclosed in the Prospectus; (vi) “Public Shareholders” 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 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, (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 (1) each Insider that is the subject of any such change, amendment, modification or waiver
and (2) each Co-Sponsor.


 


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 each Co-Sponsor and each Insider and their respective successors, heirs and assigns and permitted transferees.



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14.          
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.


 


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 or other electronic transmission.


 


16.          
Each party hereto shall not be liable for any breaches or misrepresentations contained in this Letter Agreement by any other
party to this Letter Agreement (including, for the avoidance of doubt, any Insider with respect to any other Insider), and no party
shall be liable or responsible for the obligations of another party, including, without limitation, indemnification obligations
and notice obligations.


 


17.          
This Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods and (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 June 30, 2021; provided further that paragraph 4 of this Letter Agreement shall
survive such liquidation.


 


18.          
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.


 


[Signature page follows]




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	 	Sincerely,
	 	 
	 	GPIAC II, LLC
	 	 
	 	By:
                    GPIC, Ltd., as the sole manager of GPIAC II, LLC

	 	 
	 	By:	 
	 	 	Name:

Title:
	 	 
	 	By:	 
	 	 	Name:

Title:


 


[Signature Page to Letter Agreement]




     


     


    



	 	IDS III LLC
	 	 
	 	By:	 
	 	 	Name:

Title:



 

[Signature Page to Letter Agreement]




     


     


    



	 	Name: Antonio Bonchristiano




 


[Signature Page to Letter Agreement]




     


     


    



	 	Name: Fersen Lamas Lambranho


 


[Signature Page to Letter Agreement]




     


     


    



	 	Name: Irwin Simon



 


[Signature Page to Letter Agreement]




     


     


    

	 	Name: Rodrigo Boscolo



 


[Signature Page to Letter Agreement]




     


     


    



	 	Name: Asha Daniere


 


[Signature Page to Letter Agreement]



     


     


    



	 	Name: Ira Lamel


 


[Signature Page to Letter Agreement]




     


     


    



	 	Name: George Roeth


 


[Signature Page to Letter Agreement]




     


     


    



	 	Name: Mark Tarchetti


 


[Signature Page to Letter Agreement]




     


     


    



	Acknowledged and Agreed:	 
	 	 
	GP-ACT III ACQUISITION CORP.	 
	 	 
	By:	 	 
	 	Name:

Title:	 


 


[Signature Page to Letter Agreement]