Exhibit 10.1


 


February 17, 2022


PowerUp Acquisition Corp.


188 Grand Street


Unit #195


New York, NY 10013


 


Re: Initial Public Offering


 


Gentlemen:


 


This letter (this “Letter
Agreement”) is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”)
to be entered into by and among PowerUp Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and Citigroup Global Markets Inc. as representative (the “Representative”) of the several underwriters (each,
an “Underwriter” and collectively, the “Underwriters”), relating to an underwritten
initial public offering (the “Public Offering”), of up to 28,750,000 of the Company’s units (including
up to 3,750,000 units that may be purchased to cover over-allotments, if any) (the “Units”), each comprised
of one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”),
and one-half of one warrant. Each whole Warrant (each, a “Warrant”) entitles the holder thereof to purchase
one Ordinary Share at a price of $11.50 per share, subject to adjustment. The Units shall be sold in the Public Offering pursuant to a
registration statement on Form S-1 (File No. 333-261941) and prospectus (the “Prospectus”) filed by the
Company with the Securities and Exchange Commission (the “Commission”) and the Company shall apply to have the
Units listed on The Nasdaq Global Market. Certain capitalized terms used herein are defined in Section 13 hereof.


 


In order to induce the Company
and the Underwriters to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, PowerUp Sponsor LLC, a Delaware limited liability company
(the “Sponsor”), and the undersigned individuals, each of whom is a member of the Company’s board of directors
and/or management team (each, an “Insider” and collectively, the “Insiders”), hereby
agree with the Company as follows:


 


1. Proposed Business
Combination.


 


(a) The officers
and directors of the Company will not enter into a binding agreement for a proposed business combination or propose any business combination
to the shareholders of the Company, unless such action is first approved by the Sponsor.


 


(b) Subject to section
1(a), the Sponsor and each Insider agrees that: (a) if the Company seeks shareholder approval of a proposed Business Combination, then
in connection with such proposed Business Combination, it, he or she shall (i) vote any Shares owned by it, him or her in favor of any
proposed Business Combination and (ii) not redeem any Shares owned by it, him or her in connection with such shareholder approval; (b)
if the Company engages in a tender offer in connection with any proposed Business Combination, it, he or she shall not sell any Shares
to the Company in connection therewith; and (c) if the Company seeks shareholder approval of any proposed amendment to the Charter prior
to the consummation of a Business Combination, it, he or she shall not redeem any Shares owned by it, him or her in connection with such
shareholder approval.


 


2. Liquidation; Charter
Amendment; Trust Account Funds.


 


(a) The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within the time
period set forth in the Charter, the Sponsor and each Insider shall take all reasonable steps to cause the Company to (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days
thereafter, subject to lawfully available funds therefor, redeem 100% of the Ordinary Shares sold as part of the Units in the Public
Offering (the “Offering Shares”), at a price per Ordinary Share, 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 any taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of
then issued outstanding Offering Shares, which redemption will completely extinguish all Public Shareholders’ rights as
shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and
the Company’s board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above to the
Company’s obligations under Cayman Islands law to provide for claims of creditors and other requirements of applicable
law.


 






     


     


    

 


(b) The Sponsor
and each Insider agrees to not propose any amendment to the Charter (i) 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 Offering Shares if the Company does
not complete a Business Combination within the time period described in the Prospectus or (ii) with respect to any other provision relating
to shareholders’ rights or pre-Business Combination activity, unless the Company provides its Public Shareholders with the opportunity
to redeem their Ordinary Shares upon approval of any such amendment at a price per Ordinary Share, 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 any taxes, divided by the number of then issued and outstanding Offering Shares.


 


(c) The Sponsor
and each Insider acknowledges that it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust
Account or any other asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares held by it,
him or her. The Sponsor and each Insider hereby further waives any claim such Sponsor or Insider may have in the future as a result of,
or arising out of, any contracts or agreements with the Company and will not seek recourse against the Trust Account for any reason whatsoever
except in each case with respect to the Insider’s right to a pro rata interest in the proceeds held in the Trust Account for any
Offering Shares such Sponsor or Insider may hold.


 


3. Section 16 Matters.
During the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor and
each Insider shall not, without the prior written consent of the Representative, (a) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase
a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission promulgated thereunder,
with respect to any Units, Ordinary Shares, Founder Shares, Private Placement Warrants or any securities convertible into, or exercisable,
or exchangeable for, Ordinary Shares owned by it, him or her, (b) 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, Ordinary Shares, Founder Shares, Private Placement Warrants
or any securities convertible into, or exercisable, or exchangeable for, Ordinary Shares owned by it, him or her, whether any such transaction
is to be settled by delivery of such securities, in cash or otherwise, or (c) publicly announce any intention to effect any transaction
specified in clause (a) or (b). The Sponsor and each Insider acknowledge and agree that, prior to the effective date of any release or
waiver, of the restrictions set forth in this Section 3 or Section 7 below, the Company shall announce the impending release
or waiver by press release through a major news service at least two business days before the effective date of the release or waiver.
Any release or waiver granted shall only be effective two business days after the publication date of such press release. The provisions
of this Section 3 will not apply if the release or waiver is effected solely to permit a transfer not for consideration and the
transferee has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the duration that
such terms remain in effect at the time of the transfer.


 


4. Trust Account Liquidation.
In the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any other shareholders,
members or managers of the Sponsor) agrees to indemnify and hold harmless the Company against any and all loss, liability, claim, damage
and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing
or defending against any litigation, whether pending or threatened, or any claim whatsoever) to which the Company may become subject as
a result of any claim by (a) any third party for services rendered or products sold to the Company or (b) a prospective target business
with which the Company has entered into a letter of intent, confidentiality or other similar agreement or a Business Combination agreement
(a “Target”); provided, however, that such indemnification of the Company by the Sponsor shall apply
only to the extent necessary to ensure that such claims by a third party for services rendered (other than the Company’s independent
public accountants) or products sold to the Company or a Target do not reduce the amount of funds in the Trust Account to below (i) $10.25
per Offering Share or (ii) such lesser amount per Offering Share held in the Trust Account due to reductions in the value of the trust
assets as of the date of the liquidation of the Trust Account, in each case, net of the amount of interest earned on the property in the
Trust Account which may be withdrawn to pay taxes, except as to any claims by a third party (including a Target) who executed a waiver
of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the Underwriters
against certain liabilities, including liabilities under the Securities Act of 1933, as amended. In the event that any such executed waiver
is deemed to be unenforceable against such third party, the Sponsor shall not be responsible to the extent of any liability for such third
party claims. The Sponsor shall have the right to defend against any such claim with counsel of its choice reasonably satisfactory to
the Company if, within 15 days following written receipt of notice of the claim to the Sponsor, the Sponsor notifies the Company in writing
that it shall undertake such defense.


 






     


     


    

 


5. Forfeiture.
To the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 3,750,000 Units within
45 days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees to forfeit, at no cost, a number
of Founder Shares in the aggregate equal to 937,500 multiplied by a fraction, (a) the numerator of which is 3,750,000 minus the number
of Units purchased by the Underwriters upon the exercise of their over-allotment option, and (b) the denominator of which is 3,750,000.
The Sponsor will be required to forfeit only that number of Founder Shares as is necessary so that the Sponsor and Insiders will own an
aggregate of 20.0% of the Company’s issued and outstanding equity shares after the Public Offering.


 


6. Specific Performance.
The Sponsor and each Insider hereby agrees and acknowledges that: (a) the Underwriters and the Company would be irreparably injured in
the event of a breach by such Sponsor or an Insider of its, his or her obligations under Section 1, Section 2, Section
3, Section 4, Section 5, Section 7(a), Section 7(b), Section 8, Section 9 and Section
10, as applicable, of this Letter Agreement (b) monetary damages may not be an adequate remedy for such breach and (c) 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. Lock-Up Restrictions.


 


(a) The Sponsor
and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or Ordinary Shares issuable upon conversion thereof)
until the earlier of (i) six months after the completion of the Company’s initial Business Combination or (ii) subsequent to the
Business Combination, (x) if the last sale price of the Ordinary Shares equals or exceeds $12.00 per Ordinary Share (as adjusted for share
splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days
within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination or (y) the date on
which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of
the Company’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property (the “Founder
Shares Lock-up Period”).


 


(b) The Sponsor
and each Insider agrees that it, he or she shall not Transfer any Private Placement Warrants, until 30 days after the completion of a
Business Combination (such period, together with the Founder Shares Lock-up Period, the “Lock-up Periods”).


 


(c) Notwithstanding
the provisions set forth in Sections 7(a) and Sections 7(b), Transfers of the Founder Shares, Private Placement Warrants
or the Ordinary Shares issued or issuable upon the conversion of the Private Placement Warrants or the Founder Shares and that are held
by the Sponsor, any Insider or any of their permitted transferees (that have complied with this Section 7(c)), are permitted (i)
to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors, any
members of the Sponsor, or any affiliates of the Sponsor; (ii) in the case of an individual, transfers by gift to a member of the individual’s
immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such
person, or to a charitable organization; (iii) in the case of an individual, transfers by virtue of laws of descent and distribution upon
death of the individual; (iv) in the case of an individual, transfers pursuant to a qualified domestic relations order; (v) transfers
by private sales or transfers made in connection with the consummation of a Business Combination at prices no greater than the price at
which the securities were originally purchased; (vi) transfers in the event of the Company’s liquidation prior to the completion
of an initial Business Combination; and (vii) transfers by virtue of the laws of the State of Delaware or the Sponsor’s limited
liability company agreement upon dissolution of the Sponsor; provided, however, that in the case of clauses (i) through (v) or (vii),
these permitted transferees must enter into a written agreement agreeing to be bound by the restrictions herein.


 






     


     


    

 


8. Director and
Officer Appointments. Each of the Insiders agrees to be a director or officer of the Company, as applicable, until the
earlier of the consummation 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 an Insider as a director or officer (as applicable),
each Insider agrees that he or she will not, prior to the consummation of the Business Combination, without the prior express
written consent of the Company, (a) use for the benefit of the undersigned or to the detriment of the Company or (b) disclose to any
third party (unless required by law or governmental authority), any information regarding a potential Target that is not generally
known by persons outside of the Company, the Sponsor, or their respective affiliates.


 


9. Approval of Business
Combination. The undersigned acknowledges and agrees that prior to entering into a definitive agreement for a Business Combination
with a Target that is affiliated with any of the Insiders of the Company or their affiliates, such transaction must be approved by a majority
of the Company’s disinterested directors and the Company must obtain an opinion from an independent investment banking firm or another
independent entity that commonly renders valuation opinions for the type of company the Company is seeking to acquire that such Business
Combination is fair to the Company’s unaffiliated shareholders from a financial point of view.


 


10. Representation and
Warranties. The Sponsor and each Insider represents and warrants that it, he, or she has never been suspended or expelled from
membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied,
suspended or revoked. Each Insider’s biographical information furnished to the Company (including any such information included
in the Prospectus) is true and accurate in all respects and does not omit any material information with respect to the Insider’s
background. Each Insider’s questionnaire furnished to the Company is true and accurate in all respects. Each Insider represents
and warrants that it, he or she: (a) 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)
has never been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling
of funds of another person, or (iii) pertaining to any dealings in any securities and it or he is not currently a defendant in any such
criminal proceeding.


 


11. No Insider Payments.
Except as disclosed in the Prospectus, neither the Sponsor, nor any Insider, nor any affiliate of either the Sponsor or any Insider, nor
any director or officer of the Company, shall receive from the Company any finder’s fee, reimbursement or cash payments 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 amounts described in the Prospectus under the heading “Summary
 – The Offering – Limited Payments to Insiders.”


 


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


 


13. Defined Terms.
As used herein, (a) “Business Combination” shall mean a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination, involving the Company and one or more businesses; (b) “Shares”
shall mean, collectively, the Ordinary Shares, the Founder Shares and the Ordinary Shares issued or issuable upon the conversion of the
Private Placement Warrants or the Founder Shares; (c) “Founder Shares” shall mean the 7,187,500 of the Company’s
Class B ordinary shares, par value $0.0001 per share, issued to the Sponsor (up to 937,500 Shares of which are subject to complete or
partial forfeiture by the Sponsor if the over-allotment option is not exercised by the Underwriters) for an aggregate purchase price of
$25,000, or $0.003 per share, prior to the consummation of the Public Offering; (d) “Private Placement Warrants”
shall mean the 9,138,333 Warrants of the Company (9,763,333 if the over-allotment is exercised in full) that the Company is selling in
a private placement that shall occur simultaneously with the consummation of the Public Offering; (e) “Public Shareholders”
shall mean the holders of securities issued in the Public Offering; (f) “Trust Account” shall mean the trust
fund located in the United States into which a portion of the net proceeds of the Public Offering shall be deposited; (g) “Transfer”
shall mean the (i) 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, (ii) 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 (iii) public announcement of any intention to effect any transaction specified
in clause (g)(i) or (g)(ii); and (h) “Charter” shall mean the Company’s memorandum and articles of association,
as the same may be amended from time to time.


 






     


     


    

 


14. Entire Agreement.
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.


 


15. Assignment; Successors
and Assigns. 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 party. Any purported assignment in violation of this Section shall be void and ineffectual
and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on
the Sponsor and each Insider and their respective successors, heirs and assigns and permitted transferees.


 


16. Third-Party Beneficiaries.


 


(a) The Company, the Sponsor
and each Insider hereby acknowledges and agrees that the Representative on behalf of the Underwriters is a third-party beneficiary of
this Letter Agreement.


 


(b) Subject to Section
16(a), nothing in this Letter Agreement shall be construed to confer upon, or give to, any person or entity other than the Representative
and 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 Representative, the parties hereto, and each of their respective successors, heirs, personal
representatives and assigns and permitted transferees.


 


17. Counterparts.
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.


 


18. Severability.
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.


 


19. Governing Law; Submission
to Jurisdiction. This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State
of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another
jurisdiction. The parties hereto (a) 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 (b) waive any objection to such exclusive jurisdiction
and venue or that such courts represent an inconvenient forum.


 


20. Notices.
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.


 


21. Term. This
Letter Agreement shall terminate on the earlier of (a) the expiration of the Lock-up Periods or (b) the liquidation of the Company; provided,
however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated and closed by
December 31, 2022; provided, further, that Section 4 of this Letter Agreement shall survive such liquidation.


 


[Signature Page Follows]


 






     


     


    

 


	 	Sincerely,
	 	 	 
	 	POWERUP SPONSOR, LLC
	 	 	 
	 	By:	 /s/ Gabriel Schillinger
	 	 	Name:	Gabriel Schillinger
	 	 	Title:	Managing Member
	 	 	 	 
	 	By:	 /s/ Jack Tretton
	 	 	Name:	Jack Tretton, individually
	 	 	 
	 	By:	 /s/ Michael Olson
	 	 	Name:	Michael Olson, individually
	 	 	 
	 	By:	 /s/ Gabriel Schillinger
	 	 	Name:	Gabriel Schillinger, individually
	 	 	 
	 	By:	 /s/ Bruce Hack
	 	 	Name:	Bruce Hack, individually,
	 	 	 
	 	By:	 /s/ Peter Blacklow
	 	 	Name:	Peter Blacklow, individually
	 	 	 	 
	 	By:	 /s/ Julie Uhrman
	 	 	Name:	Julie Uhrman, individually
	 	 	 	 
	 	 	 	 
	 	 	 	 



 


	Acknowledged and Agreed:	 
	 	 
	POWERUP ACQUISITION CORP.	 
	 	 	 
	By:	 /s/ Jack Tretton	 
	 	Name:	Jack Tretton	 
	 	Title:	Chief Executive Officer	 




 


 


[Signature Page to Letter Agreement]