Exhibit 10.1


 


September 10, 2021


 


Bannix Acquisition Corp.





300 Tice Boulevard; Suite 315 


Woodcliff Lake, New Jersey 07677


 


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”) to be entered into by and among Bannix Acquisition Corp., a Delaware corporation (the “Company”)
and I-Bankers Securities, Inc. (“I-Bankers”) 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 6,900,000 of the
Company’s units (including up to 900,000 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 $0.01 per share (the “Common Stock”),
one right (the “Rights”) and one redeemable warrant. Each Right entitles the holder to receive one-tenth
of one share of Common Stock upon consummation of the initial business combination. Each warrant (each, a “Warrant”)
entitles the holder thereof to purchase 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 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, Subash Menon and Sudeesh Yezhuvath (through
their investment entity Bannix Management LLP), Suresh Yezhuvath and Seema Rao (collectively, the “Sponsor”)
and each of the undersigned individuals, each of whom is a member of the Company’s board of directors, management
team or holder of founder shares and certain funds and accounts managed by Sea Otter Holdings LLC BD Series, Sixth Borough Capital
Fund LP and Better Works LLC (the “Anchor Investors”), solely in their capacity as a stockholder
of the Company, (each, an “Insider” and collectively, the “Insiders”),
hereby agrees with the Company as follows:


 


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 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 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.


 


1.                  
The Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination
within 15 months from the closing of the Public Offering (or up to 21 months if the Company extended such period in accordance
with the Company’s amended and restated certificate of incorporation (the “Charter”)) or such later
period approved by the Company’s stockholders in accordance with the Company’s 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, 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 Sponsor 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 15 months from the closing of the Public Offering
(or up to 21 months if the Company extended such period 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 Sponsor and each Insider 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 18 months from the closing of the Public
Offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination
activity.


 






    	 



    	 



    

 


2.                  
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 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 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 15 months from the date of
the closing of the Public Offering (or up to 21 months if the Company extended such period in accordance with the Company’s
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 Units, shares of Capital Stock, Warrants 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,
shares of Capital Stock, Warrants 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 (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) $10.15 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
900,000 Units within 30 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 187,500 shares. 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 20.0% of the Company’s issued and outstanding shares of Capital Stock after the Public Offering (excluding
the 350,250 representative shares).


 


6.                  
(a)           Each Insider who is an officer of the Company hereby agrees not to participate in the formation of or to become
an officer of 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 with respect to a Business Combination or unless the Company has failed to
complete a Business Combination within 15 months after the closing of the Public Offering (or up to 21 months if the Company extended
such period in accordance with the Company’s Charter).


 


(b)                
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, 6(a),
7(a), 7(b), and 9 of this Letter Agreement (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching
party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in
the event of such breach.


 


7.                  
(a)            The Sponsor and each Insider agrees
that it, he or she shall not Transfer any Founder Shares until the earlier of (A) one year 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 Sponsor and each Insider agrees that it, he or she shall not Transfer any Private Placement Warrants (or shares
of Common Stock issued or issuable upon the exercise 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 shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants that are held by the
Sponsor, 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 Sponsor, any members of the Sponsor,
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 Sponsor’s limited liability company agreement upon dissolution of the Sponsor; 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 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 Insider nor any affiliate of the Sponsor or any
Insider, nor any director or officer of the Company, shall receive from the Company any finder’s fee, reimbursement, consulting
fee, monies in respect of any repayment of a loan or other compensation prior to, or in connection with any services rendered in
order to effectuate the consummation of 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: payment to the Sponsor for office space, utilities and secretarial and administrative support
for a total of $5,000 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 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 units at
a price of $10.00 per unit at the option of the lender. Such units would be identical to the Private Placement Units, including,
with respect to the warrants included therein, 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 a director of the Company and hereby consents to being named
in the Prospectus as an officer and/or a 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) “Capital Stock” shall mean, collectively,
the Common Stock and the Founder Shares; (iii) “Founder Shares” shall mean the 1,725,000
shares of the Company’s common stock, par value $0.01 per share, held by the Initial Stockholders (up to an aggregate of
225,000 shares of which are subject to complete or partial forfeiture by the Sponsor and the Anchor Investors if the over-allotment
option is not exercised in full by the Underwriters); (iv) “Initial Stockholders” shall mean
the Sponsor, the Anchor Investors and any other holder of Founder Shares immediately prior to the Public Offering; (v) “Private
Placement Units” shall mean the 370,000 units of the Company (or 406,000 units if the over-allotment
option is exercised in full) that the certain initial stockholders and the Anchor Investors have agreed to purchase for an aggregate
purchase price of $3,700,000 in the aggregate (or $3,835,000, if the over-allotment option is exercised in full),
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 Warrants 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).


 






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


 


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.


 






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	 	Sincerely,
	 	 	 
	 	BANNIX ACQUISITION CORP.
	 	 	 
	 	By:	 
	 	Name:	Subash Menon
	 	Title:	Chairman and Chief Executive Officer
	 	 	 
	 	By:	 








 


[Signature Page to Letter Agreement]


 


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