Exhibit 10.4


 


October 13, 2020


 


5:01 Acquisition Corp.

501 Second Street, Suite 350

San Francisco, CA 94107


 


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 5:01 Acquisition Corp., a Delaware corporation (the “Company”),
and BofA Securities, Inc., as the underwriter (the “Underwriter”), relating to an underwritten initial
public offering (the “Public Offering”), of 8,000,000 shares, or up to 9,200,000 shares if the Underwriter’s
over-allotment option is exercised in full (collectively, the “Offering Shares”), of the Company’s
Class A common stock, par value $0.0001 per share (the “Class A Common Stock”). The Offering Shares will
be sold in the Public Offering pursuant to a registration statement on Form S-1 and a prospectus (the “Prospectus”)
filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”), and the Company
has applied to have the Offering Shares listed on The Nasdaq Capital Market.


 


In order to induce
the Company and the Underwriter 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 5:01 Acquisition LLC (the
 “Sponsor”) and the undersigned individuals, each of whom is a member of the Company’s board of
directors (the “Board”) and/or management team (each of the undersigned individuals, an “Insider”
and collectively, the “Insiders”), hereby agrees with the Company as follows:


 


		1.	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) “Charter” shall mean the Company’s amended and restated certificate of
incorporation (as it may be amended from time to time); (iii) “Common Stock” shall mean the Class A common
stock and Class B common stock of the Company; (iv) “Founder Shares” shall mean the 2,300,000 shares
of Class B common stock issued and outstanding (up to 300,000 shares of which are subject to forfeiture if the over-allotment option
is not exercised by the Underwriter); (v) “Initial Stockholders” shall mean the Sponsor and any Insider
that holds Founder Shares; (vi) “Private Placement Shares” shall mean the 360,000 shares of Class A Common
Stock (or up to 384,000 shares of Class A Common Stock if the over-allotment option is exercised in full by the Underwriter) that
the Sponsor has agreed to purchase at per share purchase price of $10.00 for an aggregate purchase price of $3,600,000 (or $3,840,000
if the over-allotment option is exercised in full by the Underwriter) in a private placement that shall occur simultaneously with
the consummation of the Public Offering and any exercise of the over-allotment option by the Underwriter; (vii) “Public
Stockholders” shall mean the holders of Offering Shares issued in the Public Offering, other than the Sponsor or
any Insiders; (viii) “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 (ix) “Transfer”
shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase
or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position
or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission promulgated
thereunder with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery
of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause
(a) or (b).



 






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		2.	Representations and warranties; Business combination vote.



 


		a.	The Sponsor and each Insider, with respect to itself, herself or himself, represents and warrants
to the Company that it, she or he has the full right and power, without violating any agreement to which it, she or he is bound
(including, without limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter
into this Letter Agreement, and, as applicable, to serve as an officer of the Company and/or a director on the Board, as applicable,
and each Insider hereby consents to being named in the Prospectus, road show and any other materials as an officer and/or director
of the Company, as applicable.



 


		b.	Each Insider represents and warrants, with respect to herself or himself, that such Insider’s
biographical information furnished to the Company (including any such information included in the Prospectus) is true and accurate
in all material respects and does not omit any material information with respect to such Insider’s background. The Insider’s
questionnaire furnished to the Company and the Underwriter is true and accurate in all material respects. Each Insider represents
and warrants, with respect to herself or himself, that such Insider is not subject to or a respondent in any legal action for,
any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering
of securities in any jurisdiction; such Insider has never been convicted of, or pleaded guilty to, any crime (i) involving fraud,
(ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities
and such Insider is not currently a defendant in any such criminal proceeding; and such Insider has never been suspended or expelled
from membership in any securities or commodities exchange or association or had a securities or commodities license or registration
denied, suspended or revoked.



 


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



 






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		3.	The Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate
an initial Business Combination within the time period set forth in the Charter, the Sponsor and each Insider shall take all reasonable
steps to cause the Company to (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible
but not more than ten business days thereafter (subject to the Company’s Charter), redeem 100% of the Offering Shares (including
any Offering Shares sold in the Public Offering or any Offering Shares that the Sponsor, Insiders or their affiliates purchased
in the Public Offering or later acquired in the open market or in private transactions) at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account
and not previously released to the Company to pay income taxes (less up to $100,000 of interest to pay dissolution expenses), divided
by the number of then outstanding Offering Shares, which redemption will completely extinguish all Public Stockholders’ 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 Board, liquidate
and dissolve, subject in the case of clauses (ii) and (iii) of this paragraph 3, 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 (A) that would modify the substance or timing of the Company’s obligation to redeem 100% of
the Offering Shares if the Company does not complete an initial Business Combination within the required time period set forth
in the Charter or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination
activity, unless, in each case, the Company provides its Public Stockholders with the opportunity to redeem their Offering Shares
in conjunction with any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company
to pay income taxes, 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 or the Private
Placement 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 (i) that would 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 (ii) with respect to any other provision 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).


 


		4.	Lock-up provisions.



 


		a.	Subject to the provisions of paragraph 4(c), hereof, 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 Underwriter, Transfer any shares of Common Stock (including, but not limited to, Founder Shares and the
Private Placement Shares) or any securities convertible into, or exchangeable for, or exercisable, or repayable with, 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 publicly announce any intention to effect any such Transfer.



 






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		b.	Subject to the provisions of paragraph 4(c), (i) 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) or Private
Placement Shares until the earlier of (A) one year after the completion of the Company’s initial Business Combination and
(B) the date subsequent to the initial Business Combination on which (x) 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 other similar transactions)
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 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 (such period, the “Lock-up Period”).



 


		c.	Notwithstanding the provisions of paragraphs 4(a) and 4(b) hereof, the following Transfers of the
Founder Shares, Private Placement Shares and any other securities are permitted by the Sponsor and each Insider: (i) to any persons
(including their affiliates and stockholders) who purchase Private Placement Shares, to such holder’s affiliates, or to the
officers, directors, stockholders, employees and members of the Sponsor and its affiliates, (ii) amongst the Sponsor, the Insiders
or to the Company’s officers, directors and employees, (iii) if a holder is an entity, as a distribution to its partners,
stockholders, or members upon its liquidation, (iv) by bona fide gift to a member of the holder’s immediate family or to
a trust, the beneficiary of which is a holder or a member of a holder’s immediate family, for estate planning purposes, (v)
by virtue of the laws of descent and distribution upon death, (vi) pursuant to a qualified domestic relations order, (vii) in connection
with a pledge to secure obligations of the holder incurred in connection with the holder’s purchase of the Company’s
securities, (viii) in a private sale at a price per share or other security no greater than the price per share or other security
at which the applicable shares or securities were originally purchased from the Company, (ix) to the Company for the cancellation
of up to 300,000 Founder Shares in accordance with paragraph 6 of this Letter Agreement, (x) to the Company for no value for cancellation
in connection with the consummation of its initial Business Combination, (xi) in the event of the Company’s liquidation prior
to the completion of its initial Business Combination; or (xii) in the event of completion of a liquidation, merger, share exchange
or other similar transaction which results in all of the Company’s Public Stockholders having the right to exchange their
Offering Shares for cash, securities or other property subsequent to the completion of an initial Business Combination provided,
that, except for clauses (ix), (x), (xi) and (xii) or with the Company’s prior written consent, in each case the applicable
transferee shall agree in writing to be subject to the terms of this Letter Agreement, including the provisions of this paragraph
4.



 


		d.	Notwithstanding anything herein to the contrary, nothing in this paragraph 4 shall restrict the
Sponsor or any Insider or any transferee subject to the provisions of this paragraph 4 from entering into a 10b5-1 trading plan
during the lock-up periods described in this paragraph 4, provided that such 10b5-1 trading plan does not permit any direct or
indirect sale of any securities of the Company during the applicable lock-up periods under paragraphs 4(a) and 4(b) hereof.



 






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		e.	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 4, 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.



 


		f.	Notwithstanding the foregoing, nothing in Sections 4(a) or (b) will prohibit (i) the issuance and
sale of the Private Placement Shares, (ii) the issuance and sale of additional shares of Class A Common Stock to cover the Underwriter’s
option to purchase additional shares of Class A Common Stock pursuant to the Underwriting Agreement (if any), (iii) the registration
with the Commission by the Company of the Founder Shares or Private Placement Shares pursuant to the terms of that certain Registration
and Stockholder Rights Agreement to be entered into on or around the date of this Letter Agreement and (iv) the issuance of securities
in connection with a Business Combination.



 


		5.	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 taxes payable, (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 Underwriter 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.



 


		6.	To the extent that the Underwriter does not exercise its over-allotment option to purchase up to
an additional 1,200,000 Offering Shares 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 300,000 multiplied by a fraction,
(i) the numerator of which is 1,200,000 minus the number of Offering Shares purchased by the Underwriter upon the exercise of its
over-allotment option, and (ii) the denominator of which is 1,200,000. The forfeiture will be adjusted to the extent that the over-allotment
option is not exercised in full by the Underwriter so that the Founder Shares will represent an aggregate of 20.0% of the Company’s
issued and outstanding shares Common Stock, on an as-converted basis, after the Public Offering (not including the Private Placement
Shares). The Company further agrees that to the extent that the size of the Public Offering is increased or decreased, the Company
will effect a share repurchase or share capitalization, as applicable, with respect to the Founder Shares immediately prior to
the consummation of the Public Offering in such amount as to maintain the ownership of the initial stockholders of the Company
as an aggregate of 20.0% of the Company’s issued and outstanding shares Common Stock, on an as-converted basis, after the
Public Offering (not including the Private Placement Shares or Offering Shares purchased by such stockholders in the Public Offering).



 



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		7.	The Sponsor and each Insider hereby agrees and acknowledges that: (i) the Underwriter 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
2(c), 3, 4, 5 and 6, 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.



 


		8.	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; reimbursement for any reasonable out-of-pocket expenses related to identifying, investigating,
negotiating and completing 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 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.



 


		9.	The Company will maintain an insurance policy or policies providing directors’ and officers’
liability insurance, and each member of the Board 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.



 


		10.	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.



 


		11.	Other than as provided in paragraph 4 of this Letter Agreement, 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.



 






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		12.	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.



 


		13.	This Letter Agreement may be executed in one or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature
page were an original thereof. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature
covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or
other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to
have been duly and validly delivered and be valid and effective for all purposes.



 


		14.	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.



 


		15.	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 laws of another jurisdiction. The parties hereto (i) all agree that any action, proceeding,
claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought and enforced in the courts of
New York City or 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.



 


		16.	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 electronic transmission.



 


		17.	This Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Period
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, 2020; provided further that paragraph 5 of this Letter Agreement
shall survive any such termination.



 


[Signature Page Follows]


 






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	 	Sincerely,
	 	 
	 	5:01 ACQUISITION LLC
	 	 
	 	By:	/s/ Andrew J. Schwab
	 	 	Name:	Andrew J. Schwab
	 	 	Title:	Manager
	 	 
	 	/s/ Andrew J. Schwab
	 	Andrew Schwab
	 	 
	 	/s/ Kush Parmar
	 	Kush Parmar
	 	 
	 	/s/ Galya Blachman
	 	Galya Blachman
	 	 
	 	/s/ Rebecca Lucia
	 	Rebecca Lucia
	 	 
	 	/s/ Jason Ruth
	 	Jason Ruth
	 	 
	 	/s/ Daniella Beckman
	 	Daniella Beckman
	 	 
	 	/s/ Martin Mackay
	 	Martin Mackay
	 	 
	 	/s/ Matthew Patterson
	 	Matthew Patterson



 






     


     


    

 


	Acknowledged and Agreed:	 
	 	 
	5:01 ACQUISITION CORP.	 
	 	 
	By:	/s/ Andrew J. Schwab	 
	 	Name:	Andrew J. Schwab	 
	 	Title:	Co-Chief Executive Officer