EX-10.4





 Exhibit 10.4 

March 1, 2022 
 Kensington Capital
Acquisition Corp. IV 
 1400 Old Country Road 
 Suite 301 

Westbury NY 11590 
  

	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”) to be entered into by Kensington Capital Acquisition Corp. IV, a Cayman
Islands exempted company (the “Company”), and UBS Securities LLC, as representative (the “Representative”) of the several underwriters named therein (collectively, the
“Underwriters”), relating to an underwritten initial public offering (the “Public Offering”), of up to 23,000,000 of the Company’s units (including up to 3,000,000 units that may be purchased to
cover over-allotments, if any) (the “Units”), each comprised of one Class A ordinary share of the Company, par value $0.0001 per share (the “Ordinary Shares”), one Class 1 Public Warrant and
one Class 2 Public Warrant (each as defined in the Warrant Agreement between the Company and Continental Stock Transfer & Trust Company, dated February 9, 2022 and together the “Public Warrants”). Each
Public Warrant entitles the holder thereof to purchase one Ordinary Share at a price of $11.50 per share, subject to adjustment. The Units will be sold in the Public Offering pursuant to a registration statement
on Form S-1 and a prospectus (the “Prospectus”) included therein, filed by the Company with the Securities and Exchange Commission (the
“Commission”) and the Company has applied to have the Units listed on the New York Stock Exchange. Certain capitalized terms used herein are defined in paragraph 12 hereof. 

Simultaneously with the closing of the Public Offering, the Company intends to enter into a Private Placement Warrants Purchase Agreement with
Kensington Capital Sponsor IV, LLC, a Delaware limited liability company (the “Sponsor”), pursuant to which the Sponsor will purchase 14,800,000 redeemable warrants (or up to 16,000,000 redeemable warrants to the extent the
Underwriters exercise their over-allotment option (the “Private Placement Warrants”) at a purchase price of $0.50 per Private Placement Warrant. 

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, the Sponsor and the undersigned individuals, each of whom is a member of the Company’s board of directors, a nominee for membership on the
board of directors and/or an executive officer of the Company (each, an “Insider” and collectively, the “Insiders”), hereby, severally but not jointly, agrees with the Company as follows: 

1. It is acknowledged and agreed that the Company shall not enter into a definitive agreement regarding a proposed Business Combination without
the prior consent of the Sponsor. The Sponsor and each Insider agrees with the Company that 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 any related proposal recommended by the Company’s board of directors and (ii) not redeem any Ordinary Shares owned by it, him or her in connection with such shareholder approval. If the Company seeks to
consummate a proposed Business Combination by engaging in a tender offer, the Sponsor and each Insider agrees that it, he or she will not sell or tender any Ordinary Shares owned by it, him or her in connection therewith. 

2. The Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within the period
set forth in the Company’s amended and restated memorandum and articles of association, or such later period approved by the Company’s shareholders in accordance with the Company’s amended and restated memorandum and articles of
association, 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 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, net of taxes payable (less up to $100,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding Offering Shares, which redemption will completely extinguish all Public
Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s
remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and other requirements of applicable law.
The Sponsor and each Insider agrees to not propose any amendment to the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemptions in
connection with the Company’s initial Business Combination or to redeem 100% of the Offering Shares if the Company does not complete a Business Combination within the period set forth in the Company’s amended and restated memorandum and
articles of association or (B) with respect to any other provisions relating to shareholders’ rights or pre-initial business combination activities (an amendment as described in clause (A) or
(B), an “Amendment”), unless the Company provides its public shareholders 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 (net of taxes payable), divided by the number of then outstanding Offering Shares. The Sponsor and each Insider agree to waive its redemption rights with respect to shares owned by it in connection with a shareholder
vote to approve an Amendment. 
 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, with
respect to any Ordinary Shares held by it, him or her, if any, any redemption rights it, he or she may have in 

  
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connection with the consummation of a Business Combination, including, without limitation, any such rights available in the context of a shareholder vote to approve such Business Combination or
in the context of a tender offer made by the Company to purchase Ordinary Shares (although the Sponsor, the Insiders and their respective affiliates shall be entitled to redemption and liquidation rights with respect to any Ordinary Shares it or
they hold if the Company fails to consummate a Business Combination within the period set forth in the Company’s amended and restated memorandum and articles of association). 

3. The undersigned acknowledges and agrees that prior to entering into a definitive agreement for a Business Combination with a target business
that is affiliated with the undersigned or any other Insiders of the Company or their affiliates, such transaction must be approved by a majority of the Company’s disinterested independent directors and the Company must obtain an opinion from
an independent investment banking firm, that is a member of the Financial Industry Regulatory Authority, or an independent accounting firm that such Business Combination is fair to the Company from a financial point of view. 

4. During the period commencing on the effective date of the Prospectus and ending 180 days after such date, the Sponsor and each Insider shall
not, without the prior written consent of the Representative, Transfer any Units, Ordinary Shares, Founder Shares, Public Warrants, Private Placement Warrants, or any securities convertible into, or exercisable, or exchangeable for, any of the
foregoing owned by it, him or her. 
 5. 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, or any of the other undersigned) 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 (i) any third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company or (ii) a prospective target business with
which the Company has discussed entering into a transaction 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) $10.00 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 the Company’s 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 (the “Securities Act”). 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. 

  
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 6. To the extent that the Underwriters do not exercise their over-allotment option to
purchase up to an additional 3,000,000 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 1,285,714
multiplied by a fraction, (i) the numerator of which is 3,000,000 minus the number of Units purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 3,000,000. The forfeiture will
be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriters so that the number of Founder Shares will equal an aggregate of 30.0% of the Company’s issued and outstanding Shares after the Public Offering
(not including Ordinary Shares underlying the Public Warrants or Private Placement Warrants). 
 7. The Sponsor and each Insider hereby
agrees and acknowledges that: (i) 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 paragraphs 1, 2, 3, 4, 5, 6, 7(a), 7(b), 8(a), 8(b), and
10, 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. 
 8. (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 (A) one year after the completion of the Company’s initial Business Combination and (B) subsequent to
the Business Combination, (x) if the last reported sale price of the Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, 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 (or Ordinary Shares 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 8(a) and (b), Transfers of the Founder Shares, Private Placement Warrants and Ordinary Shares issued or issuable upon the exercise or 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 paragraph 8(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 members of the Sponsor, any affiliates of the Sponsor or any 

  
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employees of such affiliates; (ii) in the case of an individual, 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, by virtue of laws of descent and distribution upon death of the individual; (iv) in the case of an
individual, pursuant to a qualified domestic relations order; (v) by private sales or transfers made in connection with the consummation of a Business Combination at prices no greater than the price at which the securities were originally
purchased; (vi) in the event of the Company’s liquidation prior to the completion of an initial Business Combination; (vii) by virtue of the laws of the Cayman Islands or the Sponsor’s limited liability company agreement upon
dissolution of the Sponsor; (viii) to the Company for no value for cancellation in connection with the consummation of an initial Business Combination or pursuant to paragraph 6 herein; and (ix) in the event of the Company’s
liquidation, merger, share exchange, reorganization or other similar transaction which results in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property subsequent to the
completion of the Company’s initial Business Combination; provided, however, that in the case of clauses (i) through (vii) these permitted transferees must enter into a written agreement agreeing to be bound by the restrictions
herein. 
 (d) In the event that the Sponsor and/or any Insider agrees, in connection with a Business Combination, to restrictions on
Transfer of the Founder Shares, Private Placement Warrants or Ordinary Shares issued or issuable upon the exercise or 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, then such restrictions and not those in this Section 8 shall be applicable. 
 9. 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,
(i) use for the benefit of the undersigned or to the detriment of the Company or (ii) disclose to any third party (unless required by law or governmental authority), any information regarding a potential target of the Company that is not
generally known by persons outside of the Company, the Sponsor, or their respective affiliates. The 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 and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act. Each Insider’s questionnaire furnished to the Company and the Underwriters is true and accurate in all material respects. Each Insider represents
and warrants that: it, he or she is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to
desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; it, he or 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 it, he or she is not currently a defendant in any such criminal proceeding. 

  
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 10. Except as disclosed in, or expressly contemplated by, the Prospectus, neither the
Sponsor nor any Insider nor any affiliate of the Sponsor or any Insider, nor any director or officer of the Company, shall receive from the Company any finder’s fee, reimbursement, consulting fee, 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). 

11. 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 a director on the board of directors of the Company and hereby consents to being named in the Prospectus as an officer and/or a director of the Company. 

12. As used herein, (i) “Business Combination” shall mean a merger, share exchange, asset acquisition, stock
purchase, reorganization or similar business combination, involving the Company and one or more businesses; (ii) “Shares” shall mean, collectively, the Ordinary Shares and the Founder Shares;
(iii) “Founder Shares” shall mean the 9,857,142 Class B ordinary shares of the Company, par value $0.0001 per share, outstanding immediately prior to the consummation of the Public Offering;
(iv) “Initial Shareholders” shall mean the Sponsor and any Insider that holds Founder Shares issued and outstanding immediately prior to the consummation of the Public Offering; (v) “Private Placement
Warrants” shall mean the warrants to purchase up to 14,800,000 Ordinary Shares (or up to 16,000,000 Ordinary Shares if the over-allotment option in connection with the Public Offering is exercised in full) of the Company that the
Sponsor has agreed to purchase for $0.50 per warrant in a private placement that shall occur simultaneously with the consummation of the Public Offering; (vi) “Public Shareholders” 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 certain of the proceeds from the sale of the Private Placement
Warrants shall be deposited; and (viii) “Transfer” shall mean the (a) sale or assignment 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 Securities Exchange
Act of 1934, as amended, 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). 
 13. This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter
hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter
Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by the company, the Sponsor and any Insider impacted by the amendment,
modification, or waiver, as applicable. 

  
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 14. 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 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 Sponsor and each Insider and their respective successors, heirs and assigns and permitted transferees. 

15. 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. 
 16. This Letter
Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity of enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore, in lieu of
any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Letter Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid
and enforceable. 
 17. 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 (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. 
 18. 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. 
 19. This Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation of the Company; provided further that paragraph 5 of this Letter Agreement shall survive such liquidation. 

[Signature Page Follows] 












 
					
	Sincerely,
	
	KENSINGTON CAPITAL SPONSOR IV LLC
			
		 	By:	 	 /s/ Justin Mirro

		 	Name:	 	Justin Mirro
		 	Title:	 	Managing Member
		
	By:	 	 /s/ Justin Mirro

		 	Justin Mirro
		
	By:	 	 /s/ Dieter Zetsche

		 	Dieter Zetsche
		
	By:	 	 /s/ Daniel Huber

		 	Daniel Huber
		
	By:	 	 /s/ Robert Remenar

		 	Robert Remenar
		
	By:	 	 /s/ Simon Boag

		 	Simon Boag
		
	By:	 	 /s/ Anders Pettersson

		 	Anders Pettersson
		
	By:	 	 /s/ Mitchell Quain

		 	Mitchell Quain
		
	By:	 	 /s/ Thomas LaSorda

		 	Thomas LaSorda
		
	By:	 	 /s/ Nicole Nason

		 	Nicole Nason
		
	By:	 	 /s/ Donald Runkle

		 	Donald Runkle
		
	By:	 	 /s/ Matthew Simoncini

		 	Matthew Simoncini


 [Signature Page to Letter Agreement] 













			
	Acknowledged and Agreed:
	
	KENSINGTON CAPITAL ACQUISITION
	CORP. IV
		
	By:	 	 /s/ Daniel Huber

	Name:	 	Daniel Huber
	Title:	 	Chief Financial Officer