Exhibit 10.1
SPONSOR AGREEMENT
This Sponsor Agreement (this “Agreement”) is dated as of June 17, 2021, by and among Leo Investors III LP, a Cayman Islands exempted limited partnership (the “Sponsor”), Lori Bush (“Bush”), Mary E. Minnick (“Minnick”), Mark Masinter (“Masinter”), Scott Flanders (“Flanders”), Imran Khan (“Khan”) and Scott McNealy (“McNealy” and, together with Bush, Minnick, Masinter, Flanders, Khan and the Sponsor, the “Sponsor Parties”), Leo Holdings III Corp, a Cayman Islands exempted company (“Parent”) and Local Bounti Corporation, a Delaware corporation (the “Company”). Capitalized terms used but not defined in this Agreement shall have the respective meanings ascribed to such terms in the Merger Agreement (as defined below).
RECITALS
WHEREAS, as of the date hereof, (i) the Sponsor is the holder of record (any such holder, a “Holder”) of 6,770,000 Parent Class B Ordinary Shares (the “Leo Investors Shares”), (ii) Bush is the Holder of 20,000 Parent Class B Ordinary Shares (the “Bush Shares”), (iii) Minnick is the Holder of 20,000 Parent Class B Ordinary Shares (the “Minnick Shares”), (iv) Masinter is the Holder of 20,000 Parent Class B Ordinary Shares (the “Masinter Shares”), (v) Flanders is the Holder of 15,000 Parent Class B Ordinary Shares (the “Flanders Shares”), (vi) Khan is the Holder of 15,000 Parent Class B Ordinary Shares (the “Khan Shares”) and (vii) McNealy is the Holder of 15,000 Parent Class B Ordinary Shares (the “McNealy Shares” and, together with the Bush Shares, the Minnick Shares, the Masinter Shares, the Flanders Shares, the Khan Shares and the Leo Investors Shares, the “Sponsor Shares”);
WHEREAS, contemporaneously with the execution and delivery of this Agreement, Parent has entered into an Agreement and Plan of Merger with the Company, Longleaf Merger Sub, Inc., a Delaware corporation (“Merger Sub I”) and Longleaf Merger Sub II, LLC, a Delaware limited liability company (“Merger Sub II”), dated as of the date hereof (as amended or modified from time to time in accordance with the terms of such agreement, the “Merger Agreement”), pursuant to which, among other things, immediately prior to the Closing, Parent shall domesticate as a Delaware corporation (the “Domestication”) and, at the Effective Time, Merger Sub I will merge with and into the Company pursuant to the Merger Agreement upon the terms and subject to the conditions set forth therein, with the Company surviving as a Subsidiary of Parent (the “First Merger”), and immediately following the consummation of the First Merger, the Company will merge with and into Merger Sub II pursuant to the Merger Agreement upon the terms and subject to the conditions set forth therein, with Merger Sub II being the surviving entity (the “Second Merger” and together with the First Merger, the “Mergers”);
WHEREAS, in connection with the transactions contemplated by the Merger Agreement and immediately prior to the Domestication, but contingent upon the occurrence of the Closing, the Sponsor Parties desire to waive any adjustment to the conversion ratio set forth in Article 17 of the Parent Governing Documents and any rights to other anti-dilution protections with respect to the rate that all of Parent Class B Ordinary Shares held by such Sponsor Party convert into Parent Common Stock in connection with the PIPE Financing, the Business Combination and the transactions contemplated by the Merger Agreement (the “Waiver”).
WHEREAS, in connection with the Domestication and contingent upon the occurrence of the Closing, as a result of the Waiver, each Sponsor Share held by the Sponsor Parties as set forth opposite their respective names on Schedule I hereto under the header “Total Parent Class B Ordinary Shares Held” will automatically be converted into one share of Parent Common Stock as set forth opposite their respective names on Schedule I hereto under the header “Total Parent Common Stock Held” (the “Automatic Conversion”);
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