Exhibit 10.1


 


INVESTMENT MANAGEMENT TRUST AGREEMENT


 


This Investment Management
Trust Agreement (this “Agreement”) is made effective as of October 5, 2021 by and between Avalon Acquisition Inc.,
a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York limited purpose
trust company (the “Trustee”).


 


WHEREAS, the Company’s
registration statement on Form S-1, No. 333-253654 and No. 333-260077 (collectively, the “Registration Statement”)
and prospectus (the “Prospectus”) for the initial public offering of the Company’s units (the “Units”),
each of which consists 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 full warrant entitling the holder thereof to purchase one share
of Common Stock (such initial public offering hereinafter referred to as the “Offering”), has been declared effective
as of the date hereof by the U.S. Securities and Exchange Commission; and


 


WHEREAS, the Company has
entered into an Underwriting Agreement (the “Underwriting Agreement”) with Maxim Group LLC as representative (the “Representative”)
of the several underwriters (the “Underwriters”) named therein; and


 


WHEREAS,
if a Business Combination (as defined herein) is not consummated within the initial 15 month period following the closing of the
Offering, upon the request of the Company’s sponsor (the “Sponsor”),
the Company may extend such period by two extensions with each extension being three months for up to a maximum of six months in
the aggregate, subject to the Sponsor or its affiliates or permitted designees depositing $1,800,000 (or $2,070,000 if the Underwriters’
over-allotment option is exercised in full) into the Trust Account (as defined below) no later than the 15 month and the 18 month
anniversary of the Offering for each three month extension (each, an “Extension”),
in exchange for which the Sponsor will receive a non-interest bearing, unsecured promissory note for each Extension payable upon
consummation of a Business Combination; and


 


WHEREAS, as described in
the Prospectus, $182,700,000 of the gross proceeds of the Offering and sale of the Private Placement Warrants (as defined in the
Underwriting Agreement) (or $210,105,000 if the Underwriters’ over-allotment option is exercised in full), and the proceeds
from any loans in connection with an Extension, if any, will be delivered to the Trustee to be deposited and held in a segregated
trust account located at all times in the United States (the “Trust Account”) for the benefit of the Company and the
holders of the Common Stock included in the Units issued in the Offering as hereinafter provided (the amount to be delivered to
the Trustee (and any interest subsequently earned thereon) is referred to herein as the “Property,” the stockholders
for whose benefit the Trustee shall hold the Property will be referred to as the “Public Stockholders,” and the Public
Stockholders and the Company will be referred to together as the “Beneficiaries”); and


 


WHEREAS, pursuant to the
Underwriting Agreement, a portion of the Property equal to $6,300,000, or $7,245,000 if the Underwriters’ over-allotment
option is exercised in full, is attributable to deferred underwriting discounts and commissions that may be payable by the Company
to the Underwriters upon the consummation of the Business Combination (as defined below) (the “Deferred Discount”);
and


 


WHEREAS, the Company and
the Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold
the Property.


 


NOW THEREFORE, IT IS AGREED:


 


1.             Agreements and Covenants of
Trustee. The Trustee hereby agrees and covenants to:


 


(a)         Hold the Property in
trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established by the Trustee at J.P.
Morgan Chase Bank, N.A. (or at another U.S. chartered commercial bank with consolidated assets of $100 billion or more) in the
United States, maintained by the Trustee and at a brokerage institution selected by the Trustee that is reasonably satisfactory
to the Company;


 






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(b)        Manage, supervise and
administer the Trust Account subject to the terms and conditions set forth herein;


 


(c)         In a timely manner, upon
the written instruction of the Company, invest and reinvest the Property in United States government securities within the meaning
of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or less, or in money market
funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated under the Investment Company
Act of 1940, as amended (or any successor rule), which invest only in direct U.S. government treasury obligations, as determined
by the Company; the Trustee may not invest in any other securities or assets, it being understood that the Trust Account will earn
no interest while account funds are uninvested awaiting the Company’s instructions hereunder;
and while the account funds are invested or uninvested the Trustee may earn bank credits or other consideration;


 


(d)        Collect and receive,
when due, all interest or other income arising from the Property, which shall become part of the “Property,” as such
term is used herein;


 


(e)        Promptly notify the Company
and the Representatives of all communications received by the Trustee with respect to any Property requiring action by the Company;


 


(f)         Supply any necessary
information or documents as may be requested by the Company (or its authorized agents) in connection with the Company’s preparation
of the tax returns relating to assets held in the Trust Account;


 


(g)         Participate in any plan
or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed by the Company
to do so;


 


(h)        Render to the Company
monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts and disbursements of
the Trust Account;


 


(i)          Commence liquidation
of the Trust Account only after and promptly after (x) receipt of, and only in accordance with, the terms of a letter from the
Company (“Termination Letter”) in a form substantially similar to that attached hereto as either Exhibit A or
Exhibit B, as applicable, signed on behalf of the Company by its Chief Executive Officer, President, Chief Financial Officer,
Secretary or Chairman of the board of directors of the Company (the “Board”) or other authorized officer of the Company
and in the case of Exhibit A, acknowledged and agreed to by the Representative, and complete the liquidation of the Trust Account
and distribute the Property in the Trust Account, including interest not previously released to the Company to pay its franchise
and income taxes (less up to $100,000 of interest that may be released to the Company to pay dissolution expenses), only as directed
in the Termination Letter and the other documents referred to therein, or (y) upon the date which is the latest of: (1) 15 months
after the closing of the Offering, (2) such later date upon one or more extensions effectuated pursuant to the terms hereof and
the Charter and (3) such later date as may be approved by the Company’s stockholders in accordance with the Charter, if a
Termination Letter has not been received by the Trustee prior to such date, in which case the Trust Account shall be liquidated
in accordance with the procedures set forth in the Termination Letter attached as Exhibit B and the Property in the Trust
Account, including interest not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of
interest that may be released to the Company to pay dissolution expenses) shall be distributed to the Public Stockholders of record
as of such date.


 


(j)         Upon written request
from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit C
(a “Tax Payment Withdrawal Instruction”), withdraw from the Trust Account and distribute to the Company the amount
of interest earned on the Property requested by the Company to cover any income or franchise tax obligation owed by the Company
as a result of assets of the Company or interest or other income earned on the Property, which amount shall be delivered directly
to the Company by electronic funds transfer or other method of prompt payment, and the Company shall forward such payment to the
relevant taxing authority; provided, however, that to the extent there is not sufficient cash in the Trust Account
to pay such tax obligation, the Trustee shall liquidate such assets held in the Trust Account as shall be designated by the Company
in writing to make such distribution so long as there is no reduction in the principal amount per share initially deposited in
the Trust Account; provided, further, that if the tax to be paid is a franchise tax, the written request by the Company
to make such distribution shall be accompanied by a copy of the franchise tax bill from the State of Delaware for the Company and
a written statement from the principal financial officer of the Company setting forth the actual amount payable. The written request
of the Company referenced above shall constitute presumptive evidence that the Company is entitled to said funds, and the Trustee
shall have no responsibility to look beyond said request (it being acknowledged and agreed that any such amount in excess of interest
income earned on the Property shall not be payable from the Trust Account);


 






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(k)        Upon written request
from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit D
(a “Stockholder Redemption Withdrawal Instruction”), the Trustee shall distribute on behalf of the Company the amount
requested by the Company to be used to redeem shares of Common Stock from Public Stockholders properly submitted in connection
with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to (a)
modify the substance or timing of the Company’s obligation to redeem 100% of its public shares of Common Stock in connection
with an initial Business Combination or to redeem 100% of such shares if the Company has not consummated an initial Business Combination
within such time as is described in the Company’s amended and restated certificate of incorporation or (b) with respect to
any other provisions relating to stockholders’ rights or pre-initial Business Combination activity. The written request of
the Company referenced above shall constitute presumptive evidence that the Company is entitled to distribute said funds, and the
Trustee shall have no responsibility to look beyond said request; and


 


(l)          Not make any withdrawals
or distributions from the Trust Account other than pursuant to Section 1(i), (j) or (k) above.


 


(m)        Upon receipt of an extension
letter (“Extension Letter”) substantially similar to Exhibit E hereto at least five business days
prior to the applicable deadline, signed on behalf of the Company by an executive officer, and receipt of the dollar amount specified
in the Extension Letter on or prior to the applicable deadline, follow the instructions set forth in the Extension Letter.


 


2.              Agreements and Covenants
of the Company. The Company hereby agrees and covenants to:


 


(a)         Give all instructions
to the Trustee hereunder in writing, signed by the Company’s Chairman of the Board, President, Chief Executive Officer, Chief
Financial Officer or Secretary. In addition, except with respect to its duties under Sections 1(i), 1(j) and 1(k)
hereof, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or instruction
which it, in good faith and with reasonable care, believes to be given by any one of the persons authorized above to give written
instructions, provided that the Company shall promptly confirm such instructions in writing;


 


(b)        Subject to Section
4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all expenses, including reasonable counsel
fees and disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder and in connection
with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim or demand,
which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or any interest
earned on the Property, except for expenses and losses resulting from the Trustee’s gross negligence, fraud or willful misconduct.
Promptly after the receipt by the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding, pursuant
to which the Trustee intends to seek indemnification under this Section 2(b), it shall notify the Company in writing of
such claim (hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the right to conduct and manage
the defense against such Indemnified Claim; provided that the Trustee shall obtain the consent of the Company with respect
to the selection of counsel, which consent shall not be unreasonably withheld. The Trustee may not agree to settle any Indemnified
Claim without the prior written consent of the Company, which such consent shall not be unreasonably withheld. The Company may
participate in such action with its own counsel;


 


(c)         Pay the Trustee the fees
set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee, and transaction processing
fee which fees shall be subject to modification by the parties from time to time. It is expressly understood that the Property
shall not be used to pay such fees unless and until it is distributed to the Company pursuant to Sections 1(i) through 1(j)
hereof. The Company shall pay the Trustee the initial acceptance fee and the first annual administration fee at the consummation
of the Offering. The Trustee shall refund to the Company the annual administration fee (on a pro rata basis) with respect to any
period after the liquidation of the Trust Account. The Company shall not be responsible for any other fees or charges of the Trustee
except as set forth in this Section 2(c), Schedule A and as may be provided in Section 2(b) hereof;


 






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(d)        In connection with any
vote of the Company’s stockholders regarding a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination involving the Company and one or more businesses (the “Business Combination”), provide
to the Trustee an affidavit or certificate of the inspector of elections for the stockholder meeting verifying the vote of such
stockholders regarding such Business Combination;


 


(e)       Provide the Representatives
with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee with respect to any proposed
withdrawal from the Trust Account promptly after it issues the same;


 


(f)         Instruct the Trustee
to make only those distributions that are permitted under this Agreement, and refrain from instructing the Trustee to make any
distributions that are not permitted under this Agreement; and


 


(g)        Within four (4) business
days after the Underwriters exercise the over-allotment option (or any unexercised portion thereof) or such over-allotment expires,
provide the Trustee with a notice in writing of the total amount of the Deferred Discount, which shall in no event be less than
$6,300,000.


 


(h)        If applicable, issue
a press release at least three days prior to the applicable deadline announcing that the Company received notice from the Sponsor
that the Sponsor intends to deposit funds into the Trust Account for extending the applicable deadline and the Board has approved
such Extension; and


 


(i)         Promptly following
the applicable deadline, disclose whether or not the deadline for the Company to consummate a Business Combination has been extended.


 


3.             Limitations of Liability.
The Trustee shall have no responsibility or liability to:


 


(a)         Imply obligations, perform
duties, inquire or otherwise be subject to the provisions of any agreement or document other than this Agreement and that which
is expressly set forth herein;


 


(b)        Take any action with
respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no liability to any party
except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;


 


(c)         Institute any proceeding
for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of any kind with
respect to, any of the Property unless and until it shall have received instructions from the Company given as provided herein
to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto;


 


(d)         Refund any depreciation
in principal of any Property;


 


(e)        Assume that the authority
of any person designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise in such
designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee;


 


(f)         The other parties hereto
or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and
in the Trustee’s best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct. The Trustee
may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Trustee, which counsel may be the Company’s counsel), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth
and acceptability of any information therein contained) which the Trustee believes, in good faith and with reasonable care, to
be genuine and to be signed or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand,
or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a written
instrument delivered to the Trustee, signed by the proper party or parties and, if the duties or rights of the Trustee are affected,
unless it shall give its prior written consent thereto;


 






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(g)         Verify the accuracy of
the information contained in the Registration Statement;


 


(h)        Provide any assurance
that any Business Combination entered into by the Company or any other action taken by the Company is as contemplated by the Registration
Statement;


 


(i)         File information returns
with respect to the Trust Account with any local, state or federal taxing authority or provide periodic written statements to the
Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;


 


(j)          Prepare, execute and
file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and activities relating
to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but not limited
to, franchise and income tax obligations, except pursuant to Section 1(j) hereof; or


 


(k)        Verify calculations,
qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections 1(i), 1(j) and
1(k) hereof.


  


4.             Trust Account Waiver.
The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”) to, or to any monies
in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it may have now
or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including, without limitation,
under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely against the Company and its
assets outside the Trust Account and not against the Property or any monies in the Trust Account.


 


5.             Termination.
This Agreement shall terminate as follows:


 


(a) If the Trustee gives
written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable efforts to locate
a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such time that the Company
notifies the Trustee that a successor trustee has been appointed and has agreed to become subject to the terms of this Agreement,
the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited to the transfer
of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate; provided,
however, that in the event that the Company does not locate a successor trustee within ninety (90) days of receipt of the
resignation notice from the Trustee, the Trustee may submit an application to have the Property deposited with any court in the
State of New York or with the United States District Court for the Southern District of New York and upon such deposit, the Trustee
shall be immune from any liability whatsoever; or


 


(b) At such
time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions
of Section 1(i) hereof (which section may not be amended under any circumstances) and distributed the Property in accordance
with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Section 2(b).


 


6.             Miscellaneous.


 


(a)        The Company and the Trustee
each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds transferred from the
Trust Account. The Company and the Trustee will each restrict access to confidential information relating to such security procedures
to authorized persons. Each party must notify the other party immediately if it has reason to believe unauthorized persons may
have obtained access to such confidential information, or of any change in its authorized personnel. In executing funds transfers,
the Trustee shall rely upon all information supplied to it by the Company, including, account names, account numbers, and all other
identifying information relating to a Beneficiary, Beneficiary’s bank or intermediary bank. Except for any liability arising
out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability
or expense resulting from any error in the information or transmission of the funds.


 






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(b)        This 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. This Agreement may be executed
in several original or facsimile counterparts, each one of which shall constitute an original, and together shall constitute but
one instrument.


 


(c)         This Agreement contains
the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. This Agreement or any provision
hereof may only be changed, amended or modified (other than to correct a typographical error) by a writing signed by each of the
parties hereto.


 


(d)        This Agreement or any
provision hereof may only be changed, amended or modified pursuant to Section 6(c) hereof with the Consent of the Stockholders,
it being the specific intention of the parties hereto that each of the Company’s stockholders is, and shall be, a third party
beneficiary of this Section 6(d) with the same right and power to enforce this Section 6(d) as the other parties
hereto. For purposes of this Section 6(d), the “Consent of the Stockholders” means receipt by the Trustee of
a certificate from the inspector of elections of the stockholder meeting certifying that either (i) the Company’s stockholders
of record as of a record date established in accordance with Section 213(a) of the Delaware General Corporation Law, as amended
(“DGCL”) (or any successor rule), who hold fifty percent (50%) or more of all then outstanding shares of the Common
Stock and Class B common stock, par value $0.0001 per share, of the Company voting together as a single class, have voted in favor
of such change, amendment or modification, or (ii) the Company’s stockholders of record as of the record date who hold fifty
percent (50%) or more of all then outstanding shares of the Common Stock and Class B common stock, par value $0.0001 per share,
of the Company voting together as a single class, have delivered to such entity a signed writing approving such change, amendment
or modification. Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the
Trustee may rely conclusively on the certification from the inspector or elections referenced above and shall be relieved of all
liability to any party for executing the proposed amendment in reliance thereon.


 


(e)         The parties hereto consent
to the jurisdiction and venue of any state or federal court located in the City of New York, State of New York, for purposes of
resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT, EACH PARTY
WAIVES THE RIGHT TO TRIAL BY JURY.


 


(f) Any notice, consent or
request to be given in connection with any of the terms or provisions of this 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 by facsimile
or email transmission:


 


if to the Trustee, to:


 


Continental Stock Transfer
& Trust Company 


1 State Street, 30th floor





New York, New York 10004 


Attn: Francis Wolf and Celeste
Gonzalez





Email: fwolf@continentalstock.com


 


   cgonzalez@continentalstock.com


 






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if to the Company, to:


 


Avalon Acquisition Inc.





2 Embarcadero Center, 8th
Floor 


San Francisco, CA 94111





Attn: S. Craig Cognetti 


Email: ccognetti@avalonspac.com


 


in each case, with copies
to:


 


Venable LLP





1270 Avenue of the Americas 


New York, New York 10020





Attn: William N. Haddad,
Esq. 


Email: WNHaddad@Venable.com


 


and


 


Maxim Group LLC





300 Park Avenue Ave., 16th
Floor 


New York, NY 10022





Attn: Clifford A. Teller,
Executive Managing Director, Investment Banking 


Email: cteller@maximgrp.com


 


and


 


Ellenoff Grossman & Schole
LLP





1345 Avenue of the Americas 


New York, NY 10105





Attn: Barry Grossman, Esq. 


Fax No: 212-370-7889





Email: bigrossman@egsllp.com


 


(g) Each of the Company and
the Trustee hereby represents that it has the full right and power and has been duly authorized to enter into this Agreement and
to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make any
claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds in the Trust Account
under any circumstance.


 


(h) Each of the Company and
the Trustee hereby acknowledges and agrees that the Representatives, on behalf of the Underwriters, is a third party beneficiary
of this Agreement.


 


(i) Except as specified herein,
no party to this Agreement may assign its rights or delegate its obligations hereunder to any other person or entity.


 


[Signature Page Follows]





 






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IN WITNESS WHEREOF, the
parties have duly executed this Investment Management Trust Agreement as of the date first written above.


 


	 	Continental Stock Transfer & Trust Company, as Trustee
	 	 	 
	 	By:	/s/ Francis Wolf
	 	 	Name: Francis Wolf
	 	 	Title: Vice President
	 	 	 
	 	Avalon Acquisition Inc.
	 	 
	 	By:	/s/ S. Craig Cognetti
	 	 	Name: S. Craig Cognetti
	 	 	Title: Chief Executive Officer



 






    	 



    	 



    

 





SCHEDULE A


 


	Fee Item	 	Time and method of payment	 	Amount
	Initial set-up fee	 	Initial closing of Offering by wire transfer.	 	$	3,500.00	 
	Trustee administration fee	 	Payable annually. First year fee payable at initial closing of Offering by wire transfer; thereafter, payable by wire transfer or check.	 	$	10,000.00	 
	Transaction processing fee for disbursements to Company under Sections 1(i), 1(j) and 1(k)	 	Billed to the Company following disbursement made to Company under Section 1	 	$	250.00	 
	Paying Agent services as required pursuant to Section 1(i)    	 	Billed to Company upon delivery of service pursuant to Section 1(i)	 	 	Prevailing rates	 




 






    	 



    	 



    

 


EXHIBIT A


 


[Letterhead of Company]


 


[Insert date]


 


Continental Stock Transfer & Trust Company





1 State Street 


New York, New York 10004





Attn: Fran Wolf and Celeste Gonzalez


 


	 	Re:	Trust Account - Termination Letter



 


Ladies and Gentlemen:


 


Pursuant to Section 1(i)
of the Investment Management Trust Agreement between Avalon Acquisition Inc. (the “Company”) and Continental Stock
Transfer & Trust Company (the “Trustee”), dated as of , 2021 (the “Trust Agreement”), this is to advise
you that the Company has entered into an agreement with (the “Target Business”) to consummate a business combination
with Target Business (the “Business Combination”) on or about [insert date]. The Company shall notify you at least
seventy-two (72) hours in advance of the actual date of the consummation of the Business Combination (the “Consummation Date”).
Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.


 


In accordance with the
terms of the Trust Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account , and to
transfer the proceeds into the trust operating account at J.P Chase Bank, N.A.to the effect that, on the Consummation Date, all
of the funds held in the Trust Account will be immediately available for transfer to the account or accounts that the Company shall
direct on the Consummation Date. It is acknowledged and agreed that while the funds are on deposit in the trust operating checking
account at J.P. Morgan Chase Bank, N.A. awaiting distribution, the Company will not earn any interest or dividends.


 


On the Consummation Date
(i) counsel for the Company shall deliver to you written notification that the Business Combination has been consummated, or will
be consummated concurrently with your transfer of funds to the accounts as directed by the Company (the “Notification”)
and (ii) the Company shall deliver to you (a) a certificate of the Chief Executive Officer of the Company, which verifies that
the Business Combination has been approved by a vote of the Company’s stockholders, if a vote is held and (b) joint written
instructions signed by the Company and Maxim Group LLC with respect to the transfer of the funds held in the Trust Account, including
payment of the Deferred Discount to Maxim Group LLC from the Trust Account (the “Instruction Letter”). You are hereby
directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the Notification and the
Instruction Letter, in accordance with the terms of the Instruction Letter. In the event that certain deposits held in the Trust
Account may not be liquidated by the Consummation Date without penalty, you will notify the Company in writing of the same and
the Company shall direct you as to whether such funds should remain in the Trust Account and be distributed after the Consummation
Date to the Company. Upon the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses
related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated.


  


In the event that the Business
Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before
the original Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company,
the funds held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day
immediately following the Consummation Date as set forth in such written instruction as soon thereafter as possible.


 


 


	 	Very truly yours,
	 	 
	 	Avalon Acquisition Inc.
	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title:



 


Agreed and acknowledged by:


 


	Maxim Group LLC	 
	 	 
	By:	 	 
	 	Name: 	 
	 	Title:	 



 






    	 



    	 



    

 


EXHIBIT B


 


[Letterhead of Company]


 


[Insert date]


 


Continental Stock Transfer & Trust Company





1 State Street 


New York, New York 10004





Attn: Fran Wolf and Celeste Gonzalez


 


	 	Re:	    Trust Account - Termination Letter




 


Ladies and Gentlemen:


 


Pursuant to Section 1(i)
of the Investment Management Trust Agreement between Avalon Acquisition Inc. (the “Company”) and Continental Stock
Transfer & Trust Company (the “Trustee”), dated as of , 2021 (the “Trust Agreement”), this is to advise
you that the Company has been unable to effect a business combination with a Target Business within the time frame specified in
the Company’s Amended and Restated Certificate of Incorporation, as described in the Company’s Prospectus relating
to the Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.


 


In accordance with the
terms of the Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account and to transfer the total
proceeds into the trust operating account at J.P.Morgan Chase Bank, N.A. to await distribution to the Public Stockholders. The
Company has selected [ ]1 as the effective date for the purpose of determining the Public Stockholders entitled to receive
their share of the liquidation proceeds. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent,
agree to distribute said funds directly to the Public Stockholders in accordance with the terms of the Trust Agreement and the
Amended and Restated Certificate of Incorporation of the Company. Upon the distribution of all the funds, net of any payments necessary
for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall
be terminated, except to the extent otherwise provided in Section 1(i) of the Trust Agreement.


 


	 	 	 	Very truly yours,
	 	 	 	 
	 	 	 	Avalon Acquisition Inc.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	Name: 
	 	 	 	 	Title:
	 	 	 	 	 
	cc:	Maxim Group LLC	 	 	 



 


1 21 months from the closing of the Offering.


 






    	 



    	 



    

 





EXHIBIT C


 


[Letterhead of Company]


 


[Insert date]


 


Continental Stock Transfer & Trust Company





1 State Street, 30th floor 


New York, New York 10004





Attn: Fran Wolf and Celeste Gonzalez


 


	 	Re:	Trust Account - Tax Payment Withdrawal
Instruction



 


Ladies and Gentlemen:


 


Pursuant to Section 1(j)
of the Investment Management Trust Agreement between Avalon Acquisition Inc. (the “Company”) and Continental Stock
Transfer & Trust Company (the “Trustee”), dated as of , 2021 (the “Trust Agreement”), the Company hereby
requests that you deliver to the Company $ of the interest income earned on the Property as of the date hereof. Capitalized terms
used but not defined herein shall have the meanings set forth in the Trust Agreement.


 


The Company needs such
funds to pay for the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of
the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt
of this letter to the Company’s operating account at:


 


	 	 	 	[WIRE INSTRUCTION INFORMATION] 
	 	 	 	 
	 	 	 	Very truly yours,
	 	 	 	Avalon Acquisition Inc.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	Name: 
	 	 	 	 	Title:
	 	 	 	 	 
	cc:	Maxim Group LLC	 	 	 



 






    	 



    	 



    

 





EXHIBIT D


 


[Letterhead of Company]


 


[Insert date]


 


Continental Stock Transfer & Trust Company





1 State Street, 30th floor 


New York, New York 10004





Attn: Fran Wolf and Celeste Gonzalez


 


	 	Re:	Trust Account - Stockholder Redemption Withdrawal Instruction



 


Ladies and Gentlemen:


 


Pursuant to Section
1(k) of the Investment Management Trust Agreement between Avalon Acquisition Inc. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of , 2021 (the “Trust Agreement”), the Company
hereby requests that you deliver to the redeeming Public Stockholders of the Company $ of the principal and interest income earned
on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust
Agreement.


 


The Company needs such
funds to pay its Public Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in
connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation
to (a) modify the substance or timing of the Company’s obligation to redeem 100% of its public shares of Common Stock in
connection with an initial Business Combination or to redeem 100% of such shares if the Company has not consummated an initial
Business Combination within such time as is described in the Company’s amended and restated certificate of incorporation
or (b) with respect to any other provisions relating to stockholders’ rights or pre-initial Business Combination activity.
As such, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter
to the redeeming Public Stockholders in accordance with your customary procedures.


 


	 	 	 	Very truly yours,
	 	 	 	Avalon Acquisition Inc.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	Name: 
	 	 	 	 	Title:
	 	 	 	 	 
	cc:	Maxim Group LLC	 	 	 



 






    	 



    	 



    

 





EXHIBIT E


 


[Letterhead of Company]


 


[Insert date]


 


Continental Stock
Transfer & Trust Company


 


1 State Street, 30th
floor





New York, New York
10004 


Attn: Fran Wolf and
Celeste Gonzalez





 


	 	Re:	Trust Account Extension Letter:



 


Ladies and Gentlemen:


 


Pursuant
to Section 1(m) of Investment Management Trust Agreement between Avalon Acquisition Inc. (the “Company”)
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of , 2021 (the “Trust Agreement”),
this is to advise you that the Company is extending the time available to consummate a Business Combination for an additional three
(3) months, from ________ to ________ (the “Extension”).


 


This
Extension Letter shall serve as the notice required with respect to the Extension prior to the applicable deadline. Capitalized
words used herein and not otherwise defined shall have the meanings ascribed to them in the Trust Agreement.


 


In
accordance with the terms of the Trust Agreement, we hereby authorize you to deposit $ [(or $[ ] if the underwriters’ over-allotment
option was exercised in full)], which will be wired to you, into the Trust Account investments upon receipt.


 


This
is the ____ of up to two Extension Letters.


 


	 	 	 	Very truly yours,
	 	 	 	Avalon Acquisition Inc.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	Name: 
	 	 	 	 	Title:
	 	 	 	 	 
	cc:	Maxim Group LLC