Exhibit 10.1


 


EXECUTION VERSION


 


	November 3, 2021	 
	Lionheart III Corp

 4218 NE 2nd Avenue

 Miami, Florida 33137  	 



 


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 between Lionheart III Corp, a Delaware corporation (the “Company”), and Nomura Securities
International, Inc., as representative (the “Representative”) of the several underwriters named therein (each,
an “Underwriter” and collectively, the “Underwriters”), relating to an underwritten
initial public offering (the “Public Offering”), of 11,500,000 of the Company’s units (and up to an additional
1,000,000 units that may be purchased to cover over-allotments, if any) (the “Units”), each comprised of one
share of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”), and one-half
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. The Units will be sold in the Public Offering pursuant to
a registration statement on Form S-1 and the accompanying prospectus (the “Prospectus”) filed by the Company
with the U.S. Securities and Exchange Commission (the “Commission”) and the Company has applied to have the
Units listed on The Nasdaq Global Market. Certain capitalized terms used herein are defined in paragraph 11 hereof.


 


In order to induce the Company
and the Representative 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, each of Lionheart Equities, LLC (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 agrees with the Company as follows:


 


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


 


2.             The Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within
12 months from the closing of the Public Offering (or up to 18 months if the period to complete a Business Combination is extended as
set forth in the Company’s second amended and restated certificate of incorporation (the “Charter”), or
such later period approved by the Company’s stockholders in accordance with 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 (as defined below) thereafter, subject to lawfully available funds therefor, redeem 100% of
the 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 and not previously released to the Company to pay its taxes (as described in the Prospectus) (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
liquidation 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 stockholders and the Company’s board of directors, dissolve and liquidate,
subject in each case to the Company’s obligations under the laws of the State of Delaware to provide for claims of creditors and
other requirements of applicable law. The Sponsor and each Insider agrees not to propose any amendment to the Charter to modify (i) the
substance or timing of the ability of holders of Offering Shares to seek redemption in connection with a Business Combination or the Company’s
obligation to redeem 100% of the Offering Shares if the Company does not complete a Business Combination by the date set forth in the
Charter or (ii) the other provisions relating to stockholders’ rights or pre-initial Business Combination activities, unless the
Company provides Public Stockholders 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 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 (as described in the Prospectus), divided
by the number of then outstanding Offering Shares.


 






    


     


    

 


The Sponsor and each Insider
acknowledges that, with respect to the Founder Shares (as defined below) and the Private Placement Shares (as defined below) held by it,
him or her, it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account as a result
of any liquidation of the Company (although the Sponsor, the Insiders and their respective affiliates 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) and hereby waives any claim it, him or her 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. The
Sponsor and each Insider hereby further waives, with respect to any shares of Capital Stock held by it, him or her, if any, any redemption
rights it, he or she may have in connection with 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 a stockholder vote to approve an amendment to the
Charter to (i) 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 in the context of a tender offer made by the
Company to purchase shares of Capital Stock or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial
Business Combination activity.


 


3.             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, (i) 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, any Units, Private
Placement Units (as defined below), Extension Units (as defined below), shares of Common Stock (including Private Placement Shares and
Extension Shares), Founder Shares, Warrants, Private Placement Warrants (as defined below) and Extension Warrants or any securities convertible
into, or exercisable, or exchangeable for, shares of Common Stock owned by it, him or her, (ii) 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, Private Placement Units, shares of Common Stock (including Private Placement Shares), Founder Shares, Warrants,
Private Placement Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by it,
him or her, (iii) 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, Private Placement Units, shares of Common Stock (including Private Placement Shares), Founder Shares, Warrants,
Private Placement Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by it,
him or her, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iv) publicly announce
any intention to effect any transaction specified in clause (i), (ii) or (iii). Each of the Insiders and the Sponsor acknowledges and
agrees that, prior to the effective date of any release or waiver of the restrictions set forth in this paragraph 3 or paragraph 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 paragraph 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.             In the event of the liquidation of the Trust Account upon the failure of the Company to consummate its initial Business Combination
within the time period set forth in the Charter, the Sponsor (the “Indemnitor”) 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)
to which the Company may become subject as a result of any claim by (i) any third party for services rendered or products sold to the
Company or (ii) any prospective target business with which the Company has entered into a written letter of intent, confidentiality or
other similar agreement or Business Combination agreement (a “Target”); provided, however, that such indemnification
of the Company by the Indemnitor (x) shall apply only to the extent necessary to ensure that such claims by a third party or a Target
do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10 per Offering Share and (ii) the actual amount
per Offering Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.10 per Offering
Share is then held in the Trust Account due to reductions in the value of the trust assets, less interest earned on the Trust Account
which may be withdrawn to pay taxes, (y) shall not apply to any claims by a third party or a Target which executed a waiver of any and
all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) and (z) shall not apply 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 Indemnitor 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 Indemnitor, the Indemnitor notifies the Company
in writing that it shall undertake such defense.


 






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5.             To the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 1,000,000 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 250,000 multiplied by a fraction, (i) the numerator of which is 1,500,000 minus the
number of Units purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 1,500,000.
The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriters so that the
Initial Stockholders (as defined below) will own an aggregate of 20.0% of the Company’s issued and outstanding shares of Capital
Stock after the Public Offering (excluding any Private Placement Shares).


 


6.             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 the Sponsor or an Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 7(a), 7(b), and 9,
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.


 


7.             (a) The Sponsor and each Insider agrees that it, he or she shall not Transfer (as defined below) any Founder Shares (or shares
of Common Stock issuable upon conversion thereof) until the earlier of (A) six months after the completion of the Company’s initial
Business Combination or (B) subsequent to the Company’s initial Business Combination, (x) if the last reported sale 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 30 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 Sponsor and each Insider
agrees that to the extent that it, she or he holds Private Placement Units, Private Placement Shares or Private Placement Warrants (or
shares of Common issued or issuable upon the exercise of the Private Placement Warrants) it, he or she shall not Transfer any of such
securities until 30 days after the completion of a Business Combination (the “Private Placement Units Lock-up Period”,
together with the Founder Shares Lock-up Period, the “Lock-up Periods”).


 


(c) Notwithstanding the provisions
set forth in paragraphs 7(a) and (b), Transfers of the Founder Shares, Private Placement Units, Private Placement 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 and that are held by the Sponsor, any Insider or any of their permitted transferees (that have complied with this paragraph 7(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 any member of the Sponsor; (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 the
Company’s initial Business Combination at prices no greater than the price at which the Founder Shares, Private Placement Shares,
shares of Common Stock or Private Placement Warrants or warrants were originally purchased; (f) in the event of the Company’s liquidation
prior to the completion of an initial Business Combination; or (g) 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 (a) through (e) or
(g), any such permitted transferees must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions
herein in this paragraph 7(c) and the other restrictions contained in this Letter Agreement.


 






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8.             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
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.


 


9.             Except as disclosed in the Prospectus, none of the Sponsor, our officers and directors, or any affiliate of the Sponsor or our
officers 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).


 


10.           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 or director of the Company and hereby consents to being named in the Prospectus as an officer
or director of the Company.


 


11.           As used in this Letter Agreement, (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)
“Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in The
City of New York, New York, are authorized or required by law to close; (iii) “Capital Stock” shall mean, collectively,
the Common Stock (including the Private Placement Shares) and the Founder Shares; (iv) “Extension Units” shall
mean up to 227,700 units (or 247,500 units if the Underwriters’ over-allotment option is exercised in full) identical to the Private
Placement Units that may be issued upon conversion of extension loans by the Sponsor or its affiliates or designees to the Trust Account
to extend the period of time to consummate a Business Combination by an additional six months (for a total of up to 18 months to complete
a Business Combination) as set forth in the Charter; (v) “Extension Shares” shall mean the shares of Common
Stock comprising a part of the Extension Units; (vi) “Extension Warrants” shall mean the warrants comprising
a part of the Extension Units; (vii) “Founder Shares” shall mean the 3,125,000 shares of the Company’s
Class B common stock, par value $0.0001 per share, (up to 250,000 Shares of which are subject to complete or partial forfeiture by the
Sponsor if the over-allotment option is not exercised by the Underwriters) outstanding immediately prior to the consummation of the Public
Offering; (viii) “Initial Stockholders” shall mean the Sponsor and any Insider that holds Founder Shares prior
to the consummation of the Public Offering; (ix) “Private Placement Shares” shall mean the shares of Common
Stock comprising a part of the Private Placement Units; (x)“Private Placement Units” shall mean the 390,000
units (400,000 units if the Underwriters’ overallotment option is exercised in full) of the Company, each comprised of one share
of Common Stock and one-half of one warrant to purchase one share of Common Stock, that the Sponsor and the Underwriters have agreed to
purchase for an aggregate purchase price of $3,900,000 ($4,000,000 if the Underwriters’ overallotment option is exercised in full)
in the aggregate, or $10.00 per Private Placement Unit, in a private placement that shall occur simultaneously with the consummation of
the Public Offering; (xi) “Private Placement Warrants” shall mean the warrants comprising a part of the Private
Placement Units and the 1,900,000 warrants (2,000,000 warrants if the Underwriters’ overallotment option is exercised in full) to
purchase one share of Common Stock, that the Sponsor has agreed to purchase for an aggregate purchase price of $1,900,000 ($2,000,000
if the Underwriters’ overallotment option is exercised in full) in the aggregate, or at $1.00 per warrant, in a private placement
that shall occur simultaneously with the consummation of the Public Offering; (xii) “Public Stockholders” shall
mean the holders of the Offering Shares; (xiii) “Trust Account” shall mean the trust fund into which a portion
of the net proceeds of the Public Offering and the sale of Private Placement Units shall be deposited; and (xiv) “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).


 






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


 


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 all parties hereto.


 


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


 


15.           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.


 


16.           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.


 


17.           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.


 


18.           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.


 






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19.           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.


 


20.           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, however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated
by November 30, 2021; provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.


 


[Signature Page Follows]


 






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	 	Sincerely,
	 	 
	 	LIONHEART EQUITIES, LLC
	 	   
	 	 
	 	By:	/s/ Ophir Sternberg
	 	Name: Ophir Sternberg
	 	Title: Manager
	 	 
	 	 
	 	OPHIR STERNBERG
	 	 
	 	/s/ Ophir Sternberg
	 	 
	 	 
	 	PAUL RAPISARDA
	 	 
	 	/s/ Paul Rapisarda
	 	 
	 	 
	 	FAQUIRY DIAZ CALA
	 	 
	 	/s/ Faquiry Diaz Cala
	 	 
	 	 
	 	JAMES ANDERSON
	 	 
	 	/s/ James Anderson
	 	 
	 	 
	 	THOMAS BYRNE
	 	 
	 	/s/ Thomas Byrne
	 	 
	 	 
	 	THOMAS HAWKINS
	 	 
	 	/s/ Thomas Hawkins
	 	 
	 	 
	 	ROGER MELTZER 
	 	 
	 	/s/ Roger Meltzer



 


 


[Signature Page to Insider Letter Agreement]


 






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	Acknowledged and Agreed:	 
	 	 
	LIONHEART III CORP	 
	   	 
	By:	/s/ Ophir Sternberg	 
	Name: Ophir Sternberg	 
	Title: Chairman, President and Chief Executive Officer	 



 






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