Exhibit 10.6


 





June 29, 2021


 


Mountain Crest Acquisition Corp. IV

311 West 43rd Street, 12th Floor

New York, NY 10036


 


Ladies and Gentlemen:


 


Mountain Crest Acquisition
Corp. IV (the “Company”), a blank check company formed for the purpose of acquiring one or more businesses or entities (a
“Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities
Act”), in connection with its initial public offering (“IPO”), pursuant to a registration statement on Form S-1
(“Registration Statement”).


 


The undersigned hereby commits
that it will purchase 195,000 units of the Company (“Placement Units”), each Placement Unit consisting of one share of common
stock of the Company, $0.0001 par value (the “Common Stock”) and one right to receive one-tenth of one share of common stock
upon the consummation of an initial Business Combination, at $10.00 per Placement Unit, for a purchase price of $1,950,000 (the “Placement
Unit Purchase Price”).


 


The undersigned hereby agrees
that it will purchase an additional amount of units of the Company (“Over-Allotment Units”), up to a maximum of 15,000 Over-Allotment
Units, or a maximum purchase price of $150,000 (“Over-Allotment Unit Purchase Price”, together with the Placement Unit Purchase
Price, the “Purchase Price”) so that at least $10.00 per share sold to the public in the IPO is held in the trust account
(as described in the Registration Statement, the “Trust Account”) regardless of whether the over-allotment option is exercised
in full or in part.


 


At least twenty-four (24) hours
prior to the pricing of the IPO, the undersigned will cause the Placement Unit Purchase Price to be delivered to an escrow account with
Loeb & Loeb LLP (“Loeb”).


 


The consummation of the purchase
and issuance of the Placement Units shall occur simultaneously with the consummation of the IPO and the consummation of the purchase
and issuance of the Over-Allotment Units shall occur simultaneously with the closing of any exercise of the over-allotment option related
to the IPO. Simultaneously with or prior to the consummation of the IPO, Loeb shall deposit the Private Unit Purchase Price, without
interest or deduction, into the Trust Account.


 


Each of the Company, and the
undersigned acknowledges and agrees that Loeb is serving hereunder solely as a convenience to the parties to facilitate the purchase
of the Placement Units and Loeb’s sole obligation under this letter agreement is to act with respect to holding and disbursing
the Purchase Price for the Placement Units as described above. Loeb shall not be liable to the Company, the Underwriter or the undersigned
or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services
hereunder unless Loeb has acted in a manner constituting gross negligence or willful misconduct. The Company and the undersigned shall
indemnify Loeb against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act
in connection with this letter agreement except as a result of its gross negligence or willful misconduct. Loeb may rely and shall be
protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed
by it to be genuine and to have been signed or presented by the proper party or parties.


 






     


    


    

 


The Units and Over-Allotment
Units will be identical to the units to be sold by the Company in the IPO. Additionally, the undersigned agrees:


 


	 	●	to
    vote the shares of Common Stock included in the Placement Units and Over-Allotment Units in favor of any proposed Business Combination;


 


	 	●	not to propose,
    or vote in favor of, an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate
    of Incorporation”) that would affect the substance or timing of the Company’s obligation to redeem 100% of the Company’s
    shares of Common Stock sold in the IPO if the Company does not complete an initial Business Combination within 12 months from the
    closing of the IPO (or up to 18 months, as applicable), unless the Company provides the holders of shares of Common Stock underlying
    the units sold in the IPO 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 of the Trust Account, including interest earned on Trust Account and not previously
    released to the Company to pay the Company’s franchise and income taxes, divided by the number of then outstanding shares of
    Common Stock underlying the units sold in the IPO;


 


	 	●	not to convert
    any shares of Common Stock included in the Placement Units and Over-Allotment Units into the right to receive cash from the Trust
    Account in connection with a shareholder vote to approve either a Business Combination or an amendment to the provisions of the Certificate
    of Incorporation, and not to tender any shares of Common Stock included in the Placement Units and Over-Allotment Units in connection
    with a tender offer conducted prior to the closing of a Business Combination;


 


	 	●	that the undersigned
    will not participate in any liquidation distribution with respect to the Placement Units and Over-Allotment Units or any underlying
    securities (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the
    undersigned in the IPO or in the open market) if the Company fails to consummate a Business Combination;


 


	 	●	that the Placement
    Units, Over-Allotment Units and underlying securities will not be transferable until after the consummation of a Business Combination
    except (i) to the Company’s pre-IPO shareholders, or to the Company’s officers, directors, advisors and employees,
    (ii) transfers to the undersigned’s affiliates or its members upon its liquidation, (iii) to relatives and trusts
    for estate planning purposes, (iv) by virtue of the laws of descent and distribution upon death, (v) pursuant to a qualified
    domestic relations order, (vi) by private sales made in connection with the consummation of a Business Combination at prices
    no greater than the price at which the Placement Units were originally purchased or (vii) to the Company for cancellation in
    connection with the consummation of a Business Combination, in each case (except for clause vii) where the transferee agrees to the
    terms of the transfer restrictions; and


 


	 	●	the Placement
    Units and Over-Allotment Units will include any additional terms or restrictions as is customary in other similarly structured blank
    check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which
    will be set forth in the Registration Statement.


 


The undersigned acknowledges
and agrees that the purchaser of the Placement Units and Over-Allotment Units will execute agreements in form and substance typical for
transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as
are reasonably acceptable to the undersigned, including but not limited to an insider letter.


 


The undersigned hereby represents
and warrants that:


 


	 	(a)	it has been
    advised that the Placement Units and Over-Allotment Units have not been registered under the Securities Act;


 


	 	(b)	it will be
    acquiring the Placement Units and Over-Allotment Units for its account for investment purposes only;


 






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	 	(c)	it has no present
    intention of selling or otherwise disposing of the Placement Units and Over-Allotment Units in violation of the securities laws of
    the United States;


 


	 	(d)	it is an “accredited
    investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act;


 


	 	(e)	it has had
    both the opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on
    its behalf concerning the terms and conditions of the offer made hereunder;


 


	 	(f)	it is familiar
    with the proposed business, management, financial condition and affairs of the Company;


 


	 	(g)	it has full
    power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate
    the transactions contemplated in this letter; and


 


	 	(h)	this letter
    constitutes its legal, valid and binding obligation, and is enforceable against it.


 


This letter agreement constitutes
the entire agreement between the undersigned and the Company with respect to the purchase of the Placement Units and Over-Allotment Units,
and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with
respect to the same.


 


	 	Very truly
    yours,
	 	 
	 	MOUNTAIN CREST
    HOLDINGS IV LLC
	 	 
	 	By:	/s/ Suying
    Liu
	 	Name:	Suying Liu
	 	Title:	Member


 


	Accepted and Agreed:	 
	 	 
	MOUNTAIN CREST ACQUISITION CORP. IV	 
	 	 
	By:	/s/ Suying
    Liu	 
	 	Name:	Suying Liu	 
	 	Title:	Chief Executive Officer	 


 






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