Exhibit
10.1


 


 


September 27, 2021


 


Parabellum Acquisition Corp.


3811 Turtle Creek Blvd.


Suite 2125 Dallas, TX 75219


 


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 Parabellum Acquisition Corp., a Delaware corporation (the "Company") and B. Riley Securities, Inc.
as underwriter (the "Underwriter"), relating to an underwritten initial public offering (the "Public
Offering"), of up to 14,375,000 of the Company's units (including up to 1,875,000 units that may be purchased to cover over-allotments,
if any) (the "Units"), each comprised of one share of the Company's Class A common stock, par value $0.0001
per share (the "Common Stock"), and three-quarters of one redeemable warrant. Each whole 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 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 Units listed on the New York Stock Exchange. Certain capitalized terms used herein are defined in paragraph 11 hereof.


 


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 Parabellum Acquisition Partners, LLC, a Delaware limited liability company (the
"Sponsor") and the undersigned individuals, 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 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, the Sponsor and
each Insider agrees that it, he or she will not seek to sell its, his or her shares of Capital Stock to the Company in connection
with such tender offer.


 


2.     The Sponsor and
each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within 18 months from the
closing of the Public Offering, or such later period approved by the Company's stockholders in accordance with the Company's amended
and restated certificate of incorporation (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 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 (as defined below), including interest
earned on the funds held in the Trust Account and not previously released to the Company to pay its 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 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 agrees not to propose any amendment to the Charter to modify (i) the substance or timing of the
ability of holders of Offering Shares to seek redemption in connection with a Business Combination, (ii) certain amendments to
the Charter prior to the completion of a Business Combination or (iii) (A) the Company obligation to redeem 100% of the
Offering Shares if the Company does not complete a Business Combination within such time set forth in the Charter or (B) any
other provisions relating to stockholders' rights or pre-initial Business Combination activity, unless the Company provides its
public stockholders with the opportunity to redeem their shares of Common Stock upon approval of any such amendment at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds
held in the Trust Account and not previously released to the Company to pay its taxes, divided by the number of then outstanding
Offering Shares.


 






    


    


    

 


The Sponsor and each Insider acknowledges that
it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the
Company as a result of any liquidation of the Company with respect to the Founder Shares held by it, him or her. The Sponsor and each
Insider hereby further waives, with respect to any shares of Common Stock held by it, him or her, if any, any redemption rights it, he
or she may have in connection with 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 a stockholder vote to approve an amendment to the Charter
to modify (i) the substance or timing of the ability of holders of Offering Shares to seek redemption in connection with a Business
Combination or (ii) (A) the Company's obligation to redeem 100% of the Offering Shares if the Company does not complete a Business
Combination within such time set forth in the Charter or (B) any other provisions relating to stockholders' rights or pre-initial
Business Combination activity, unless the Company provides its public stockholders with the opportunity to redeem their shares of Common
Stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its
taxes, divided by the number of then outstanding Offering Shares, or (iii) 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
the time period set forth in the Charter).


 


3.     During
the period commencing on the 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, (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 Capital 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 Capital Stock owned by it, him or her, whether any such transaction is to be settled
by delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified
in clause (i) or (ii). Each of the Insiders and the Sponsor acknowledges and agrees that, prior to the effective date of any release
or waiver, of the restrictions set forth in this paragraph 3 or paragraph 7 below, the Company shall announce the impending release or
waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any
release or waiver granted shall only be effective two business days after the publication date of such press release. The provisions of
this paragraph will not apply if the release or waiver is effected solely to permit a transfer not for consideration and the transferee
has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the duration that such terms
remain in effect at the time of the transfer.


 


4.     In
the event of the liquidation of the Trust Account upon the failure of the Company to consummate its initialBusiness 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 shall (x) 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) $10.10 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 $10.10 per Offering
Share is then held in the Trust Account due to reductions in the value of the trust assets, less interest earned on the Trust Account
which may be withdrawn to pay taxes, (y) 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) 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.


 






    


    


    

 


5.     To the extent that
the Underwriter does not exercise its over-allotment option to purchase up to an additional 1,875,000 Units in full 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 468,750 multiplied by a fraction, (i) the numerator of which is 1,875,000 minus the number of Units
purchased by the upon the exercise of their over-allotment option, and (ii) the denominator of which is 1,875,000. The Sponsor will
be required to forfeit only that number of Founder Shares as is necessary 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.


 


6.     (a) The
Underwriter acknowledges that each Insider may become an officer or director of another special purpose acquisition company with
a class of securities intended to be registered under the Exchange Act, even before the Company has entered into a definitive agreement
regarding an initial Business Combination.


 


(b) 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 1, 2, 3, 4, 5, 7(a), 7(b), and 9, as applicable, of this
Letter Agreement, (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall
be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such breach.


 


7.     (a) The Sponsor
and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or shares of Common Stock issuable upon conversion
thereof) until the earlier of (A) one year after the completion of the Company's initial Business Combination or (B) subsequent
to the 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 150 days after the Company's initial Business Combination or (y) the date on which the Company completes a liquidation,
merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company's stockholders having
the right to exchange their shares of 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 or conversion of the Private Placement Warrants or the Founder Shares and 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 affiliate or family member of any of the Company's officers or directors or any
affiliate of the Sponsor or to any member(s) of the Sponsor or any of their affiliates; (b) in the case of an individual,
by gift to a member of such individual's immediate family or to a trust, the beneficiary of which is a member of such individual's
immediate family, an affiliate of such individual or to a charitable organization; (c) in the case of an individual, by virtue
of laws of descent and distribution upon death of such individual; (d) in the case of an individual, pursuant to a qualified
domestic relations order; (e) by private sales or transfers made in connection with the consummation of an initial Business
Combination at prices no greater than the price at which the shares or warrants were originally purchased; (f) in the event of
the Company's liquidation prior to the completion of an initial Business Combination; (g) by virtue of the laws of the State of
Delaware or the Sponsor's limited liability company agreement upon dissolution of the Sponsor or (h) in the event of our
liquidation, merger , capital stock exchange, reorganization or other similar transaction which results in all of our stockholders
having the right to exchange their shares of common stock for cash, securities or other property subsequent to our completion of our
initial business combination; provided, however, that in the case of clauses (a) through (e) or (g), these
permitted transferees must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions
herein.


 






    


    


    

 


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. Each Insider's questionnaire
furnished to the Company is true and accurate in all respects. Each Insider represents and warrants that: it, he or she is not subject
to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any
act or practice relating to the offering of securities in any jurisdiction; it, he or she has never been convicted of, or pleaded guilty
to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining
to any dealings in any securities and it, he or she is not currently a defendant in any such criminal proceeding.


 


9.     Except
as disclosed in the Prospectus, neither the Sponsor nor any officer, nor any affiliate of the Sponsor or any officer, nor any director
of the Company, shall receive from the Company any finder's fee, reimbursement, consulting fee, 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) .


 


10.   The Sponsor and each Insider has
full right and power, without violating any agreement to which it is bound (including, without limitation, any non-competition or non-solicitation
agreement with any employer or former employer), to enter into this Letter Agreement and, as applicable, to serve as an officer and/or
director on the board of directors of the Company and hereby consents to being named in the Prospectus as an officer and/or director
of the Company.


 


11.   As
used herein, (i) "Business Combination" shall mean a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination, involving the Company and one or more businesses; (ii) "Capital
Stock" shall mean, collectively, the Common Stock and the Founder Shares; (iii) "Founder Shares" shall
mean (a) the 3,593,750 shares of the Company's Class B common stock, par value $0.0001 per share, initially issued to the Sponsor
(up to 468,750 Shares of which are subject to complete or partial forfeiture by the Sponsor if the over-allotment option is not exercised
by the Underwriter) for an aggregate purchase price of $25,000, or $0.007 per share, prior to the consummation of the Public Offering;
(iv) "Initial Stockholders" shall mean the Sponsor and any Insider that holds Founder Shares; (v) "Private
Placement Warrants" shall mean the Warrants to purchase up to 6,225,000 shares of Common Stock of the Company (up to 6,600,000
if the over-allotment option is exercised in full) that the Sponsor has agreed to purchase for an aggregate purchase price of $6,225,000
in the aggregate (up to $6,600,000 if the over-allotment option is exercised in full), or $1.00 per Warrant, 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 shall be deposited; and (viii) "Transfer"
shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or
otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or
liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act, and the
rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any
such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention
to effect any transaction specified in clause (a) or (b).


 


12.   The
Company will maintain an insurance policy or policies providing directors' and officers' liability insurance, and each officer
and director shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage
available for any of the Company's directors or officers.


 


13.   This
Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof
and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent
they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed,
amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument
executed by all parties hereto.


 






    


    


    

 


14.   No
party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior
written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall
not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on the Sponsor
and each Insider and their respective successors, heirs and assigns and permitted transferees.


 


15.   Nothing
in this Letter Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto
any right, remedy or claim under or by reason of this Letter Agreement or of any covenant, condition, stipulation, promise or agreement
hereof. All covenants, conditions, stipulations, promises and agreements contained in this Letter Agreement shall be for the sole and
exclusive benefit of the parties hereto and their successors, heirs, personal representatives and assigns and permitted transferees.


 


16.   This
Letter Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.


 


17.   This
Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Letter Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.


 


18.   This Letter Agreement shall be
governed by and construed and enforced in accordance with the laws of the State of New York, 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 New York City, in the State of New York, and irrevocably submit to such jurisdiction and venue, which jurisdiction and
venue shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and venue or that such courts represent an
inconvenient forum.


 


19.   Any notice, consent or request
to be given in connection with any of the terms or provisions of this LetterAgreement shall be in writing and shall be sent by express
mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or facsimile transmission.


 


20.   This
Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation
of the Company; provided, however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated
and closed by December 31, 2021; provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.


 


21.   The
Company, the Sponsor and each Insider hereby acknowledges and agrees that the Underwriter is a third party beneficiary of this
Letter Agreement.


 


[Signature Page Follows]


 






    


    


    

 


	 	Sincerely,
	 	 
	 	PARABELLUM ACQUISITION PARTNERS LLC, a
	 	Delaware limited liability company
	 	 
	 	 
	 	By:	/s/ Narbeh Derhacobian
	 	 	Name: Narbeh Derhacobian
	 	 	Title: Manager
	 	 
	 	 
	 	By:	/s/ Daniel Wolfe
	 	 	Name: Daniel Wolfe
	 	 	Title: Manager
	 	 
	 	 
	 	 	/s/ Narbeh Derhacobian
	 	 	Narbeh Derhacobian
	 	 
	 	 
	 	 	/s/ Ron Shelton
	 	 	Ron Shelton
	 	 	 
	 	 
	 	 	/s/ Daniel B. Wolfe
	 	 	Daniel B. Wolfe
	 	 
	 	 
	 	 	/s/ Ajit Medhekar
	 	 	Ajit Medhekar
	 	 
	 	 
	 	 	/s/ Herve P. Fages
	 	 	Herve P. Fages
	 	 
	 	 
	 	 	/s/ Kevin Palatnik
	 	 	Kevin Palatnik 
	 	 
	 	 
	 	 	/s/ Zac Hirzel
	 	 	Zac Hirzel



 


[Signature Page to Letter Agreement]


 






    


    


    

 


	Acknowledged and Agreed:	 
	 	 
	PARABELLUM ACQUISITION CORP.	 
	 	 
	 	 
	By:	/s/ Narbeh Derhacobian	 
	 	Name: Narbeh Derhacobian	 
	 	Title:   President and Chief Executive Officer	 



 


[Signature Page to Letter Agreement]