Exhibit 10.1


 


EXECUTION VERSION


 





July 29, 2021


 


XPAC Acquisition Corp.

55 West 46th Street, 30th floor

New York, NY 10036


 


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 or proposed to be entered into by and between XPAC Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and Citigroup Global Markets Inc. (the “Underwriter”), relating to an underwritten initial public offering (the
 “Public Offering”), of 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 (each, an “Ordinary Share”), and one-third of one redeemable warrant
(each whole warrant, a “Warrant”). Each 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 and prospectus (the “Prospectus”) filed by the Company with the Securities and Exchange Commission
(the “Commission”). Certain capitalized terms used herein are defined in paragraph 11 hereof.


 


In order to induce the Company and the Underwriter
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, XPAC Sponsor LLC, a Cayman Islands limited liability company (the “Sponsor”),
and the other undersigned persons (each, an “Insider” and collectively, the “Insiders”),
each hereby agrees, severally but not jointly, with the Company as follows:


 


1.                 
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 (including any proposals recommended by the Company’s board of directors in connection with such
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 with the Company 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, as amended from time to time, 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, 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 (less up to $100,000 of interest to pay dissolution
expenses and which interest shall be net of taxes payable), divided by the number of then issued and 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, liquidate and dissolve, subject in each case to the Company’s
obligations under Cayman Islands law to provide for claims of creditors and the requirements of other 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 (i)
to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial
Business Combination or to redeem 100% of the Offering Shares if the Company does not complete its initial Business Combination within
24 months from the closing of the Public Offering, or (ii) 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 issued and 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 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 (x) 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
and (y) a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (i) to modify
the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business
Combination or to redeem 100% of the Offering Shares if the Company does not complete its initial Business Combination within 24 months
from the closing of the Public Offering, or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial
Business Combination activity (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).


 






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3.                  Notwithstanding
the provisions set forth in paragraphs 7(a) and (b) below, 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
Underwriter, offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any transaction that is designed to, or
might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to
cash settlement or otherwise)), 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 (“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 Units, Shares,
Warrants or any securities convertible into, or exercisable, or exchangeable for, Ordinary Shares, or publicly announce an intention
to effect any such transaction; provided, however, that the foregoing does not apply to the forfeiture of any Founder
Shares pursuant to their terms or any transfer of Founder Shares to any current or future independent director of the company (as
long as such current or future independent director transferee is subject to this Letter Agreement or executes an agreement
substantially identical to the terms of this Letter Agreement, as applicable to directors and officers at the time of such transfer;
and as long as, to the extent any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16
filing includes a practical explanation as to the nature of the transfer). 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, 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 (i) any third party for services rendered (other than the Company’s independent registered public
accountants) 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 registered 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
as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, 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
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 Underwriter 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.


 






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5.                  To
the extent that the Underwriter does not exercise its 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 that it shall forfeit, at
no cost, a number of Founder Shares in the aggregate equal to 750,000 multiplied by a fraction, (i) the numerator of which is
3,000,000 minus the number of Units purchased by the Underwriter upon the exercise of their over-allotment option, and (ii) the
denominator of which is 3,000,000. 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 Underwriter so that the number of Founder
Shares will equal an aggregate of 20.0% of the Company’s issued and outstanding Shares after the Public Offering.


 


6.                 
The Sponsor and each Insider hereby agrees and acknowledges that: (i) the Underwriter 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, 5, 7(a), 7(b), and 9 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.


 


7.                 
(a) The Sponsor and each Insider agrees that it, he or she shall not Transfer (as defined below) 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 sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations
and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 120 days after the Company’s
initial Business Combination or (y) the date following the completion of the Company’s initial Business Combination on which the
Company completes a liquidation, merger, amalgamation, 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 or conversion 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 7(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, are permitted
(a) to the Company’s directors or officers, any affiliates or family members of the Company’s directors or
officers, any direct or indirect 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) in the case of a trust, by distribution to one or more of the permissible
beneficiaries of such trust; (f) 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; (g) in the event of
the Company’s liquidation prior to the Company’s completion of its initial Business Combination; (h) by virtue of
the laws of the Cayman Islands or the Sponsor’s limited liability company agreement, as amended, upon dissolution of the
Sponsor; and (i) 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 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 (a) through (f), these permitted transferees must enter
into a written agreement with the Company agreeing to be bound by the transfer restrictions in this 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, 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.
Each Insider’s questionnaire furnished to the Company, if any, is true and accurate in all respects. Each Insider represents and
warrants that: it 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 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 is not currently a defendant in any such criminal proceeding.


 


9.                 
Except as disclosed in, or as expressly contemplated by, the Prospectus (including, without limitation, in relation to the role
of XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A. as the Company's financial advisor), 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).


 


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 a director on the board of directors of the Company and hereby consents to being named in the Prospectus
as a director of the Company.


 






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11.              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 Ordinary Shares and the Founder Shares; (iii) “Founder
Shares” shall mean the 5,750,000 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 other person that holds Founder Shares; (v) “Private Placement Warrants” shall mean the
Warrants to purchase an aggregate of 4,000,000 Ordinary Shares of the Company (or up to 4,400,000 Ordinary Shares of the Company
depending on the extent to which the Underwriter’s over-allotment option is exercised pursuant to the Underwriting Agreement)
that the Sponsor has agreed to purchase for an aggregate purchase price of $6,000,000 (or up to $6,600,000 depending on the extent
to which the Underwriter’s over-allotment option is exercised pursuant to the Underwriting Agreement), or $1.50 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 shall be deposited;
and (viii) “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, (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).


 


12.             
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 (1) each Insider that is the subject of any such change, amendment, modification or waiver and (2) the Sponsor.


 


13.             
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.


 


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.


 


15.             
This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. 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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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 or other electronic 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 and (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 December 31, 2021; provided further that paragraph 4 of this Letter Agreement shall survive such
liquidation.


 


19.             
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.


 


[Signature page follows]


 












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	 	Sincerely,
	 	 
	 	XPAC
    Sponsor LLC
	 	 
	 	By:	/s/ Fabio Kann
	 	 	Name: Fabio Kann
	 	 	Title: Manager




 


[Signature Page to Letter
Agreement]


 






     


     


    

 


	 	/s/ Chu Chiu Kong
	 	Name: Chu Chiu Kong




 


[Signature Page to Letter
Agreement]


 



     


     


    







 





	 	/s/ Guilherme Teixeira
	 	Name: Guilherme Teixeira


 


[Signature Page to Letter
Agreement]


 






     


     


    

 





	 	/s/ Fabio Kann
	 	Name: Fabio Kann


 


[Signature Page to Letter
Agreement]


 






     


     


    

 





	 	/s/ Marcos Peixoto
	 	Name: Marcos Peixoto


 


[Signature Page to Letter
Agreement]


 






     


     


    

 





	 	/s/ Ana Cabral-Gardner
	 	Name: Ana Cabral-Gardner


 


[Signature Page to Letter
Agreement]


 






     


     


    

 


	 	/s/ Denis Pedreira
	 	Name: Denis Pedreira



 





[Signature Page to Letter
Agreement]





 






     


     


    

 





	 	/s/ Camilo de Oliveira Tedde
	 	Name: Camilo de Oliveira Tedde


 


[Signature Page to Letter
Agreement]





 






     


     


    

 


Acknowledged and Agreed:


 


	XPAC
    Acquisition Corp.	 
	 	 
	By:	/s/
Chu Chiu Kong	 
	 	Name: Chu Chiu Kong	 
	 	Title: Director/CEO	 




 


[Signature Page to Letter
Agreement]