Exhibit 10.1


 


July 14, 2021


 


Graf Acquisition Corp. IV


1790 Hughes Landing Blvd., Suite 400


The Woodlands, Texas 77380


 


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 Graf Acquisition Corp. IV, a Delaware corporation (the “Company”), and J.P.
Morgan Securities LLC and Oppenheimer & Co. Inc., as representatives (the “Representatives”) of the
several underwriters (each, an “Underwriter” and collectively, the “Underwriters”),
relating to the underwritten initial public offering (the “Public Offering”), of up to 17,250,000 of
the Company’s units (the “Units”), each comprised of one share of the Company’s common stock, par
value $0.0001 per share (the “Common Stock”), and one-fifth 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 as described in the Prospectus (as defined below). The Units were be sold in the Public Offering pursuant
to a registration statement on Form S-1 and prospectus (the “Prospectus”) filed by the Company with the
U.S. Securities and Exchange Commission (the “Commission”) and listed on the New York Stock Exchange. Certain
capitalized terms used herein are defined in paragraph 11 hereof.


 


For good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned is a member of the board of directors of the Company (the
 “Director”) hereby agrees with the Company as follows:


 


1.            The
Director agrees that if the Company seeks stockholder approval of a proposed Business Combination, then in connection with such proposed
Business Combination, she shall (i) vote any shares of Common Stock (as defined below) owned by her in favor of any proposed Business
Combination and (ii) not redeem any shares of Common Stock owned by her in connection with such stockholder approval. If the Company
seeks to consummate a proposed Business Combination by engaging in a tender offer, the Sponsor and each Insider agrees that she will not
sell or tender any shares of Common Stock owned by her in connection therewith.


 


2.            The
Director hereby agrees that in the event that the Company fails to consummate a Business Combination within 24 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 (as it may be amended from time to time, the “Charter”), the
Director shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the shares of 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 (which interest shall be net of taxes payable and 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’ (as defined below)
rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board
of directors, liquidate and dissolve, 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 Director agrees to not propose any amendment to the Charter to modify the substance
or timing of the Company’s obligation to redeem 100% of the Offering Shares if the Company does not complete a Business Combination
within the required time period set forth in the Charter or with respect to any other material provisions relating to stockholders’
rights or pre-initial business combination activity, unless the Company provides its Public Stockholders with the opportunity to redeem
their Offering 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 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 Director acknowledges
that 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 her. The Director hereby further waives, with
respect to any shares of Common Stock held her, if any, any redemption rights she may have in connection with (A) the consummation
of a Business Combination, including, without limitation, any such rights available in the context of a stockholder vote to approve such
Business Combination, or (B) a stockholder vote to approve an amendment to the Charter to modify the substance or timing of the Company’s
obligation to redeem 100% of the Offering Shares if the Company has not consummated a Business Combination within the time period set
forth in the Charter or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination
activity or in the context of a tender offer made by the Company to purchase Offering Shares (although the Director 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.            The
Director hereby agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably injured in the event of a
breach by the Director of her obligations under paragraphs 1, 2, 3, 4, 4(a), and 6, as applicable, of this Letter Agreement (ii) monetary
damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in
addition to any other remedy that such party may have in law or in equity, in the event of such breach.


 


4.            (a) The
Director agrees that she shall not Transfer any Founder Shares (or any 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 and (B) subsequent to the
Business Combination, (x) if the closing 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 120 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
Director agrees that she shall not Transfer any Private Placement Warrants (or any share 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 4(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 that are held by the
Director or any of her permitted transferees (that have complied with this paragraph 4(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, any affiliate of the Sponsor
or to any members of the Graf Acquisition Partners IV LLC (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 any forward purchase
agreement or similar arrangement or in connection with the consummation of an initial Business Combination at prices no greater than the
price at which the securities 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 the Company’s liquidation, merger, capital stock 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 Company’s completion of an 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 and the other restrictions contained in this Agreement (including
provisions relating to voting, the Trust Account and liquidating distributions).


 






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5.            The
Director represents and warrants that 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. The Director’s questionnaire furnished
to the Company is true and accurate in all respects. The Director represents and warrants that: 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; 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 she is not currently a defendant in any such criminal proceeding.


 


6.            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, including the Director, shall receive from the Company any finder’s fee, reimbursement, consulting fee, non-cash
payments, monies in respect of any repayment of a loan or other compensation prior to, or in connection with any services rendered in
order to effectuate, the consummation of the Company’s initial Business Combination (regardless of the type of transaction that
it is), other than the following, none of which will be made from the proceeds held in the Trust Account prior to the completion of the
initial Business Combination: repayment of a loan and advances up to an aggregate of $150,000 made to the Company by the Sponsor; payments
to the Sponsor for certain office space, secretarial and administrative services as may be reasonably required by the Company of $15,000
per month; reimbursement for any reasonable out-of-pocket expenses related to identifying, investigating, negotiating and completing an
initial Business Combination, and repayment of loans, if any, and on such terms as to be determined by the Company from time to time,
made by the Sponsor or an affiliate of the Sponsor or any of the Company’s officers or directors to finance transaction costs in
connection with an intended initial Business Combination, provided, that, if the Company does not consummate an initial Business Combination,
a portion of the working capital held outside the Trust Account may be used by the Company to repay such loaned amounts so long as no
proceeds from the Trust Account are used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price
of $1.50 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants, including as to
exercise price, exercisability and exercise period.


 


7.            The
Director 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.


 






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8.            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) “Common
Stock” shall mean the common stock and the Founder Shares; (iii) “Founder Shares” shall mean
the 4,312,500 shares of common stock issued and outstanding; (iv) “Initial Stockholders” shall mean the
Sponsor and any Insider that holds Founder Shares; (v) “Private Placement Warrants” shall mean the 4,333,533
Warrants that the Sponsor has agreed to purchase for an aggregate purchase price of $6,650,000, or $1.50 per Warrant, in a private placement
occurred 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 and the sale of the Private Placement Warrants were deposited; (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); and (ix) “Warrants” shall mean the Private
Placement Warrants and public warrants.


 


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


 


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


 


11.            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 Director and her
respective successors, heirs and assigns and permitted transferees.


 


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


 


13.            This
Letter Agreement may be executed in 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.


 


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


 






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15.            This
Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. 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.


 


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


 


17.            This
Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation of the
Company.


 


[Signature Page Follows]


 






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	 	Sincerely,
	 	 
	 	 
	 	By:	/s/ Alexandra Lebenthal
	 	 	Name: Alexandra Lebenthal






 


Acknowledged and Agreed:


 


 


	GRAF ACQUISITION CORP. IV	 
	 	 
	By:	/s/ James A. Graf	 
	 	Name: James A. Graf	 
	 	Title: Chief Executive Officer