Exhibit 10.1


 


January
26, 2021


European
Sustainable Growth Acquisition Corp.

73 Arch Street, 3rd Floor

Greenwich, CT 06830





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 and between European Sustainable Growth Acquisition
Corp., a Cayman Islands exempted company (the “Company”), and EarlyBirdCapital, Inc. (the “Representative”),
as the representative of the several underwriters (the “Underwriters”), relating to an underwritten
initial public offering (the “Public Offering”) of up to 14,375,000 of the Company’s units (including
up to 1,875,000 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 “Class A ordinary shares”),
and one-half of one warrant (each, a “Warrant”). Each Warrant entitles the holder thereof to purchase
one Class A 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 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 Capital Market. Certain capitalized terms used herein are defined in paragraph 10 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, LRT Capital1 LLC,
a Delaware limited liability company (the “Sponsor”), and the other undersigned persons (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 shareholder 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 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.


 


2.
The Sponsor and each Insider 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 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 ten (10) business days thereafter, subject to lawfully available funds therefor, redeem
100% of the Class A 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
(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 Shareholders’ rights
as shareholders (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 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) that would
affect the ability of Public Shareholders to exercise redemption rights with respect to the Offering Shares or 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 24 months from the closing of the Public Offering or (b) with respect to any other provision relating to shareholders’
rights or pre-initial Business Combination activity, 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 (which interest shall be net of taxes payable), divided by the
number of then outstanding Offering Shares.


 



     


     


    

 


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 (as defined below) held by it. The Sponsor and each Insider hereby further waives, with respect to any Shares 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 shareholder vote to approve such Business Combination
or in the context of a tender offer made by the Company to purchase Class A ordinary shares (although the Sponsor and the Insiders
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 24 months from the date of the closing of the Public Offering or such later period
approved by the Company’s shareholders in accordance with the Company’s amended and restated memorandum and articles
of association).


 


3.
In the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any
other equityholders, 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 (i) any third party (other than the Company’s independent
public accountants) 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 share of the Offering Shares or (ii)
such lesser amount per share of the Offering Shares 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.


 


4.
To the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 1,875,000 Units
within 45 days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees that it shall
forfeit, at no cost, a number of Founder Shares in the aggregate equal to 468,750 multiplied by a fraction, (i) the numerator
of which is 1,875,000 minus the number of Units purchased by the Underwriters upon the exercise of their over-allotment option,
and (ii) the denominator of which is 1,875,000.


 


All
references in this Letter Agreement to Founder Shares of the Company being forfeited shall take effect as surrenders for no consideration
of such Founder Shares as a matter of Cayman Islands law. The forfeiture will be adjusted to the extent that the over-allotment
option is not exercised in full by the Underwriters so that the Founder Shares will represent 20.0% of the Company’s issued
and outstanding Shares after the Public Offering (assuming the Initial Shareholders do not purchase any units in the Public Offering
and excluding the Representative Shares). The Initial Shareholders further agree that to the extent that the size of the Public
Offering is increased or decreased, the Company will effect a capitalization or share repurchase or redemption or other appropriate
mechanism, as applicable, immediately prior to the consummation of the Public Offering in such amount as to maintain the ownership
of the Initial Shareholders prior to the Public Offering at 20.0% of the Company’s issued and outstanding Shares upon the
consummation of the Public Offering (assuming the Initial Shareholders do not purchase any units in the Public Offering and excluding
the Representative Shares). In connection with such increase or decrease in the size of the Public Offering, then (A) the references
to 1,875,000 in the numerator and denominator of the formula in the first sentence of this paragraph shall be changed to a number
equal to 15% of the number of Class A ordinary shares included in the Units issued in the Public Offering and (B) the reference
to 468,750 in the formula set forth in the immediately preceding sentence shall be adjusted to such number of Founder Shares that
the Founder Shares would represent an aggregate of 20.0% of the Company’s issued and outstanding Shares after the Public
Offering (assuming the Initial Shareholders do not purchase any units in the Public Offering and excluding the Representative
Shares).


 



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5.
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 Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 6(a), 6(b) and
8 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 seek injunctive relief, in addition to any other remedy that such party may have in law or in equity, in
the event of such breach.


  


6.


 


(a)
The Sponsor and each Insider agrees that it, he or she shall not Transfer (as defined below) any Founder Shares (or Class A ordinary
shares issuable upon conversion thereof) until six months after the completion of the Company’s initial Business Combination
(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 Class A ordinary
shares issued or issuable upon the conversion or 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 6(a) and 6(b), Transfers of the Founder Shares, Private Placement Warrants
and Class A ordinary shares issued or issuable upon the exercise or conversion of the Private Placement Warrants or the Founder
Shares, are permitted: (a) 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; (b) in the case of an individual, by gift
to a member of the individual’s immediate family, or 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; (c) in the case of an individual, by virtue
of laws of descent and distribution upon death of the 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 the consummation of the Company’s 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 Company’s completion of an initial Business Combination; (g) by virtue of the laws of the Cayman
Islands or the Sponsor’s limited partnership agreement, as amended from time to time, upon dissolution of the Sponsor; or
(h) in the event of the Company’s completion of a liquidation, merger, amalgamation, share exchange, reorganization or other
similar transaction which results in all of the Company’s shareholders having the right to exchange their Class A ordinary
shares for cash, securities or other property subsequent to the completion of the Company’s initial Business Combination;
provided, however, that, except in the case of clause (f) or with the Company’s prior consent, these permitted transferees
(the “Permitted Transferees”) must enter into a written agreement with the Company agreeing to be bound
by the transfer restrictions in this Agreement.


 


7.
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, if any (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 such Insider’s
background. The Sponsor and each Insider’s questionnaire furnished to the Company, if any, is true and accurate in all respects.
The Sponsor and 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.


 


8.
Except as disclosed in 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).


 






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9.
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.


 


10.
As used herein, (i) “Business Combination” shall mean a merger, amalgamation, share exchange, asset
acquisition, share purchase, reorganization or similar business combination, involving the Company and one or more businesses;
(ii) “Shares” shall mean, collectively, the Class A ordinary shares and the Class B ordinary shares;
(iii) “Founder Shares” shall mean the 3,593,750 Class B ordinary shares, par value $0.0001 per share,
issued and outstanding immediately prior to the consummation of the Public Offering; (iv) “Initial Shareholders”
shall mean the Sponsor and any Insider that holds Founder Shares; (v) “Private Placement Warrants” shall
mean the Warrants to purchase up to 4,000,000 Class A ordinary shares (including 3,800,000 private warrants to be purchased by
the Sponsor and 200,000 private warrants to be purchased by the Underwriters) of the Company (or 4,175,000 Class A ordinary shares,
including 356,250 to be purchased by the Sponsor and 18,750 to be purchased by the Underwriters, if the over-allotment option
is exercised in full) that the Sponsor and the Underwriters have agreed to purchase for an aggregate purchase price of $4,000,000
in the aggregate (or $4,175,000, if the over-allotment option is exercised in full), or $1.00 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 shall be deposited; (viii) “Representative
Shares” shall mean the 60,000 Class B ordinary shares, par value $0.0001 per share, issued to the Representative
and outstanding immediately prior to the consummation of the Public Offering; and (ix) “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, (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).


 


11.
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 Sponsor and each Insider that is the subject of any such change, amendment modification
or waiver.


 


12.
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.


 


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, 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.


 


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.
Each party hereto shall not be liable for any breaches or misrepresentations contained in this Letter Agreement by any other party
to this Letter Agreement (including, for the avoidance of doubt, any Insider with respect to any other Insider), and no party
shall be liable or responsible for the obligations of another party, including, without limitation, indemnification obligations
and notice obligations.


 


18.
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 and closed by March 31, 2021; provided further that paragraph 3 of this Letter Agreement shall survive such
liquidation.


 


19.
The Company, the Sponsor and each Insider hereby acknowledges and agrees that the several Underwriters are third party beneficiaries
of this Letter Agreement.


 


[signature
page follows]


 






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	 	Sincerely,
	 	 
	 	LRT
    CAPITAL1 LLC
	 	 
	 	By
    its managing member LRT Capital LLC
	 	 
	 	By:	 /s/ Pieter Taselaar
	 	 	Name: Pieter Taselaar
	 	 	Title: Manager
	 	 
	 	/s/
    Karan Trehan
	 	Karan
    Trehan
	 	 
	 	/s/
    Pieter Taselaar
	 	Pieter
    Taselaar
	 	 
	 	/s/
    Patrick Moroney
	 	Patrick
    Moroney
	 	 
	 	/s/
    Lars Thunell
	 	Lars
    Thunell
	 	 
	 	/s/
    Wilco Jiskoot
	 	Wilco
    Jiskoot
	 	 
	 	/s/
    Elaine Grunewald
	 	Elaine
    Grunewald
	 	 
	 	/s/
    Matheus Hovers
	 	Matheus
    Hovers
	 	 
	 	/s/
    Marc Rothfeldt
	 	Marc
    Rothfeldt


 


Acknowledged
and Agreed:


 


EUROPEAN
SUSTAINABLE GROWTH ACQUISITION CORP.


 


	By:
    	/s/
    Karan Trehan	 
	 	Name:
    Karan Trehan	 
	 	Title:
    President	 


  


 


[Signature
Page – Insider Letter]


 


 


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