Exhibit 10.13


 


October 5, 2021


 


Avalon Acquisition Inc.


2 Embarcadero Center, 8th Floor


San Francisco, CA 94111


 


Maxim Group LLC


300 Park Avenue, 16th Floor


New York, NY 10022


 


		Re:	Initial Public Offering



 


Ladies and Gentlemen:


 


This letter (the “Letter Agreement”) is
being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered
into by and between Avalon Acquisition Inc., a Delaware corporation (the “Company”) and Maxim Group LLC,
as representative (“Maxim”), relating to an underwritten initial public offering (the “IPO”)
of the Company’s units (the “Units”), each unit comprised of one share of the Company’s Class A
common stock, par value $0.0001 per share (the “Common Stock”), and three-fourths of one redeemable warrant,
each whole warrant exercisable for one share of Common Stock (each, a “Warrant”). Certain capitalized
terms used herein are defined in paragraph 12 hereof.


 


In order to induce the Company and Maxim to enter into the Underwriting
Agreement and to proceed with the IPO, and in recognition of the benefit that such IPO will confer upon the undersigned, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees
with the Company as follows:


  


	1.	If
the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all shares of Common Stock
beneficially owned by him or her, whether acquired before, in or after the IPO, in favor of such Business Combination.
	 	 
	2.	In
the event that the Company does not complete a Business Combination within the time period set forth in the Company’s amended
and restated certificate of incorporation, as the same may be further amended from time to time (the “Charter”),
the undersigned will, as promptly as possible, take all necessary actions 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,
redeem the IPO 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 Trust Account not previously released to the Company to pay its tax obligations, if any (less
up to $100,000 of such net interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by
the number of then outstanding IPO Shares, which redemption will completely extinguish public stockholders’ rights as stockholders
(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 stockholders and the Company’s board
of directors, dissolve and liquidate, subject in the cases of clauses (ii) and (iii) to the Company’s obligations under
Delaware law to provide for claims of creditors and other requirements of applicable law. The undersigned hereby waives any and
all right, title, interest or claim of any kind in or to any distribution of the Trust Account and any remaining net assets of
the Company as a result of such liquidation with respect to the Founder Shares owned by the undersigned. However, if any of the
undersigned have acquired IPO Shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account
with respect to such IPO Shares in the event that the Company does not complete a Business Combination within the time period
set forth in the Charter. The undersigned acknowledges and agrees that there will be no distribution from the Trust Account with
respect to any Warrants, all rights of which will terminate on the Company’s liquidation.
	 	 
	3.	The
undersigned acknowledges and agrees that prior to entering into a definitive agreement for a Business Combination with a target
business that is affiliated with the undersigned or any other Insiders of the Company or their affiliates, such transaction must
be approved by a majority of the Company’s disinterested independent directors and the Company must obtain an opinion from
an independent investment banking firm, which is a member of the Financial Industry Regulatory Authority, or an independent accounting
firm that such Business Combination is fair to the Company’s unaffiliated stockholders from a financial point of view.



 



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	4.	None
of the undersigned, any member of the family of any of the undersigned, or any affiliate of the undersigned will be entitled to
receive and will not accept any compensation or other cash payment from the Company prior to, or for services rendered in order
to effectuate, the completion of the Business Combination; provided that the Company shall be allowed to make the payments set
forth in the Registration Statement adjacent to the caption “Prospectus Summary—The Offering—Limited payments
to insiders.”
	 	 
	5.
(a)	The undersigned
agrees that the Founder Shares may not be transferred, assigned or sold (except to certain permitted transferees as described
in the Registration Statement or herein) (the “Lockup”) until the earlier to occur of: (1) one
year after the completion of a Business Combination or (2) the date following the completion of the Company’s initial
Business Combination on which the Company completes a liquidation, merger, stock exchange 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. Notwithstanding the foregoing, if the closing price of the Company’s Common Stock equals or exceeds $12.00 per
share (as adjusted for share splits, share capitalizations, 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, the
Founder Shares will be released from the Lockup.    
	 	 
	(b)	Notwithstanding
the provisions set forth in paragraphs 5(a) and 5(c), during the period commencing on the effective date of the Underwriting Agreement
and ending 180 days after such date, the undersigned will not, without the prior written consent of Maxim pursuant to the Underwriting
Agreement, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, hedge or otherwise dispose of or agree
to 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) by the undersigned or any
affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly,
including the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission
(the “SEC”) in respect of, 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 SEC promulgated thereunder with respect to, any Units, shares of Common
Stock, Founder Shares or 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 Common Stock, Founder Shares, 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,
including the filing of a registration statement, specified in clause (i) or (ii). The provisions of this paragraph will
not apply (i) to the transfer of Founder Shares to any independent director appointed or elected to the Company’s board
of directors before or after the IPO or (ii) if the release or waiver is effected solely to permit a transfer not for consideration
and, in each case of (i) 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.



 


	(c)	The undersigned agrees that until the Company completes an initial Business Combination, the undersigned’s Private Placement Warrants will be subject to the transfer restrictions described in the Private Placement Warrants Purchase Agreement relating to the undersigned’s Private Placement Warrants.    



 



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	(d)	Notwithstanding
the provisions set forth in paragraphs 5(a) and (c), transfers, assignments and sales by the undersigned of the Founder Shares,
Private Placement Warrants and shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants or
conversion of the Founder Shares are permitted (i) to the Company’s officers or directors, any affiliates or family
members of any of the Company’s officers or directors, to Avalon Acquisition Holdings, LLC, a Delaware limited liability
company (the “Sponsor”), any members or partners of the Sponsor or their affiliates, any affiliates
of the 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 one 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) by
private sales or transfers made in connection with the completion of the Business Combination at prices no greater than the price
at which the Founder Shares, Private Placement Warrants or shares of Common Stock, as applicable, were originally purchased; (vi) by
virtue of the Sponsor organizational documents upon liquidation or dissolution of the Sponsor; (vii) to the Company for no
value for cancellation in connection with the completion of the Business Combination; (viii) in the event of the Company’s
liquidation prior to the completion of a Business Combination; or (ix) in the event of completion of a liquidation, merger,
share exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange
their shares of Common Stock for cash, securities or other property subsequent to the completion of a Business Combination; provided,
however, that in the case of clauses (i) through (vi) these permitted transferees must enter into a written agreement
agreeing to be bound by the restrictions herein. For the avoidance of doubt, the transfers of Founder Shares, Private Placement
Warrants and shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants or conversion of the
Founder Shares shall be permitted regardless of whether a filing under Section 16(a) of the Exchange Act shall be required
or shall be voluntarily made with respect to such transfers.    
	 	 
	(e)	The undersigned
acknowledges and agrees that if, in order to complete any Business Combination, the holders of Founder Shares or Private Placement
Warrants are required to contribute back to the capital of the Company a portion of any such securities to be cancelled by the
Company or transfer any such securities to third parties, the undersigned will contribute back to the capital of the Company or
transfer to such third parties, at no cost, a proportionate number of Founder Shares or Private Placement Warrants, as applicable,
pro rata with the other holders of Founder Shares or Private Placement Warrants, as applicable.    
	 	 
	6. (a)	In order to minimize
potential conflicts of interest that may arise from multiple corporate affiliations, the undersigned hereby agrees that until
the earliest of the Company’s initial Business Combination or liquidation, the undersigned shall present to the Company
for its consideration, prior to presentation to any other entity, any target business that has a fair market value of at least
80% of the assets held in the Trust Account (excluding the amount of deferred underwriting discounts held in trust and taxes payable
on the interest earned on the trust account), subject to any existing or future fiduciary or contractual obligations the undersigned
might have.    
	 	 
	(b)	The
undersigned hereby agrees and acknowledges that (i) each of Maxim and the Company would be irreparably injured in the event
of a breach of the obligations under paragraph 6(a) above, (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.	The undersigned agrees to be a director or officer of the Company, as applicable, until the earlier of the completion by the Company of an initial Business Combination, the liquidation of the Company, or his or her removal, death or incapacity. In the event of the removal or resignation of the undersigned as a director or officer (as applicable), the undersigned agrees that he or she will not, prior to the completion of the Business Combination, without the prior express written consent of the Company, (i) use for the benefit of the undersigned or to the detriment of the Company or (ii) disclose to any third party (unless required by law or governmental authority), any information regarding a potential target of the Company that is not generally known by persons outside of the Company, the Sponsor, or their respective affiliates. The undersigned’s biographical information previously furnished to the Company and Maxim is true and accurate in all material respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s FINRA Questionnaire previously furnished to the Company and Maxim is true and accurate in all material respects. The undersigned represents and warrants that:


 



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	(a)	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;    
	 	 
	(b)	He or she has never
been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction
or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant
in any such criminal proceeding; and    
	 	 
	(c)	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.



 


	8.	The
undersigned has full right and power, without violating any agreement by which he or she is bound, to enter into this Letter Agreement
and to serve as a director or officer of the Company, as applicable.
	 	 
	9.	The
undersigned hereby waives his or her right to exercise redemption rights with respect to any of the Founder Shares owned or to
be owned by the undersigned, directly or indirectly, and agrees that he or she will not seek redemption with respect to such shares
(or sell such shares to the Company in any tender offer) in connection with any stockholder vote to approve (x) a Business
Combination or (y) an amendment to the Charter that would affect the substance or timing of the Company’s obligation
to allow redemption in connection with the Business Combination or to redeem 100% of the shares of Common Stock if the Company
has not completed a Business Combination within such time set forth in the Charter.
	 	 
	10.	The
undersigned hereby agrees to not propose, or vote in favor of, an amendment to the Company’s Charter (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 IPO Shares if the Company does not complete its initial Business Combination within such time set forth
in the Charter, or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination
activity, unless the Company provides its public stockholders with the opportunity to redeem their IPO 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 IPO Shares.
	 	 
	11.	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 undersigned hereby (i) agrees that any action, proceeding or claim against him arising out of or relating in any way
to this Letter Agreement shall be brought and enforced in the courts of the State of New York of the United States of America
for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive and
(ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
	 	 
	12.	As
used herein, (i) a “Business Combination” shall mean a merger, stock exchange, asset acquisition,
stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities;
(ii) “Insiders” shall mean all officers, directors and Sponsor of the Company immediately prior to the
IPO; (iii) “Founder Shares” shall mean all of the Class B Common Stock of the Company, par value
$0.0001 per share, acquired by an Insider prior to the IPO; (iv) “IPO Shares” shall mean the shares
of Common Stock issued in the Company’s IPO; (v) “Private Placement Warrants” shall mean the warrants
that are being sold privately by the Company simultaneously with the consummation of the IPO; (vi) “Trust Account”
shall mean the trust account into which the net proceeds of the Company’s IPO and a portion of the proceeds from the sale
of the Private Placement Warrants will be deposited; and (vii) “Registration Statement” means the Company’s
registration statement on Form S-1 (SEC File No. 333-253654) filed with the SEC, as amended.



 



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	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.	The
undersigned acknowledges and understands that Maxim and the Company will rely upon the agreements, representations and warranties
set forth herein in proceeding with the IPO and further agrees that Maxim shall be a third party beneficiary of this Letter Agreement.
Nothing contained herein shall be deemed to render Maxim a representative of, or a fiduciary with respect to, the Company, its
stockholders or any creditor or vendor of the Company with respect to the subject matter hereof.
	 	 
	15.	This
Letter Agreement shall be binding on the undersigned and such person’s respective successors, heirs, personal representatives
and assigns. This Letter Agreement shall terminate on the earlier of (i) the completion of a Business Combination and (ii) the
liquidation of the Company; provided, that such termination shall not relieve the undersigned from liability for any breach of
this agreement prior to its termination. The parties hereto may not assign either this Letter Agreement or any of their 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.
	 	 
	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.	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.
	 	 
	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,
	 	 
	 	By:	 /s/
Donald H. Putnam
	 	Name
of Insider: Donald H. Putnam
	 	 
	 	Acknowledged
and Agreed:
	 	 
	 	AVALON
ACQUISITION INC.
	 	 	 
	 	By:	/s/
S. Craig Cognetti 
	 	Name:	S.
Craig Cognetti 
	 	Title:	Chief
Executive Officer




 


[Signature
Page to Letter Agreement]


 


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