Exhibit 10.3


EXECUTION VERSION


 


SPONSOR AGREEMENT


 


This SPONSOR AGREEMENT (this
“Agreement”) is dated as of December 14, 2022, by and among M3-Brigade Sponsor III LP, a Delaware limited partnership
(the “Sponsor”), M3-Brigade Acquisition III Corp., a Delaware corporation (“MBSC”), Greenfire
Resources Ltd., an Alberta corporation (“PubCo”) and Greenfire Resources Inc., an Alberta corporation (the “Company”).
Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Business Combination Agreement
(as defined below).


 


RECITALS


 


WHEREAS, as of the date hereof,
the Sponsor is the holder of record and the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange
Act) of 7,500,000 shares of SPAC Class B Shares (the “Founder Shares”) and 5,786,667 SPAC Warrants (the “Founder
Warrants”) as set forth on Schedule I hereto;


 


WHEREAS, contemporaneously
with the execution and delivery of this Agreement, MBSC, PubCo, the Company, 2476276 Alberta ULC, an Alberta unlimited liability corporation
(“Canadian Merger Sub”) and DE Greenfire Merger Sub Inc., a Delaware corporation (“Merger Sub”),
have entered into that certain Business Combination Agreement, dated as of the date hereof (as it may be amended, restated or otherwise
modified from time to time in accordance with its terms, the “Business Combination Agreement”), pursuant to which,
among other things, (a) at the Effective Time, the effectiveness of a Plan of Arrangement on the terms and conditions set forth therein,
(b) at the Arrangement Effective Time, the amalgamation of Canadian Merger Sub with the Company, with the Company surviving the amalgamation
as a wholly owned subsidiary of PubCo, in accordance with Section 193 of the Business Corporations Act (Alberta) (the “ABCA”),
in each case, in accordance with the applicable provisions of the ABCA, and (c) at the Effective Time, a merger of Merger Sub with and
into MBSC, with MBSC surviving the merger as a wholly owned subsidiary of PubCo in accordance with the General Corporation Law of the
State of Delaware; and


 


WHEREAS, as an inducement
to MBSC and the Company to enter into the Business Combination Agreement and to consummate the transactions contemplated therein (the
“Transactions”), the parties hereto desire to agree to certain matters as set forth herein.


 


NOW, THEREFORE, in consideration
of the foregoing and the mutual agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree
as follows:


 


ARTICLE I


 


SPONSOR
AGREEMENT


 


Section 1.1 Sponsor Voting Agreements.


 


(a)   At
any meeting of the stockholders of MBSC, however called, or at any adjournment or postponement thereof, or in any other circumstance in
which the vote, consent or other approval or action of the stockholders of MBSC is sought (including in connection with any action by
written consent of the stockholders of MBSC), the Sponsor shall (i) appear at each such meeting or otherwise cause all of its Founder
Shares and any shares of SPAC Common Shares that the Sponsor acquires record or beneficial ownership of after the date hereof (collectively,
the “Subject MBSC Shares”) to be counted as present thereat for purposes of calculating a quorum, and (ii) vote
(or cause to be voted), in person or by proxy, or execute and deliver a written consent covering, all of its Subject MBSC Shares:


 


(i)   in
favor of each Transaction Proposal; and


 






     


     


    

 


(ii)   against
(A) any SPAC Acquisition Proposal and (B) any other action or proposal that would reasonably be expected to materially impede,
frustrate, interfere with, delay, postpone or adversely affect any of the Transaction Proposals or any other transaction contemplated
by the Business Combination Agreement or any Ancillary Document, or result in any breach of any representation, warranty, covenant, agreement
or other obligation of MBSC, PubCo, Canadian Merger Sub or Merger Sub under the Business Combination Agreement or of MBSC, PubCo, Canadian
Merger Sub, Merger Sub or the Sponsor under any Ancillary Document to which any of the foregoing is a party (including this Agreement).


 


(b)   The
Sponsor hereby irrevocably and unconditionally agrees:


 


(i)   not
to elect to cause MBSC to redeem any Subject MBSC Shares in the SPAC Stockholder Redemption or otherwise;


 


(ii)   to
execute and deliver all related documentation and take such other actions in support of the Transactions as shall reasonably be requested
by MBSC to consummate the Transactions;


 


(iii)   that
it hereby revokes any and all previous proxies granted or voting instruction forms or other voting documents delivered that conflict,
or are inconsistent, with the matters set forth in this Agreement;


 


(iv)   not
take any other action of any kind, directly or indirectly, with the intention of delaying or interfering with the completion of the Transactions;
and


 


(v)   to
use its commercially reasonable efforts to take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate
with the other Parties in doing such things, in each case, reasonably necessary to consummate the Transactions.


 


Section 1.2 Waiver
of Anti-Dilution Provisions. The Sponsor hereby irrevocably waives (for itself and for its successors, heirs and assigns), to the
fullest extent permitted by applicable Law and the Governing Documents of MBSC, the application of the adjustment to the Initial Conversion
Ratio (as defined in the current certificate of incorporation of MBSC (the “Current Charter”)) pursuant to Section 4.3(b)(ii)
of the Current Charter in connection with the issuance of shares of SPAC Class A Shares. The waiver specified in this Section 1.2
will be applicable only in connection with the issuance of shares of SPAC Class A Shares and will be void and of no force and effect if
the Business Combination Agreement is validly terminated for any reason prior to the Closing. The waiver specified in this Section 1.2
constitutes the written consent of the holders of a majority of the shares of SPAC Class B Shares outstanding, voting separately as a
single class, in the manner contemplated by Section 4.3(b)(iii) of the Current Charter.


 






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Section 1.3 Founder
Shares and Founder Warrants; Transfer Restrictions.


 


(a)   The
Sponsor hereby agrees that, on the Closing Date prior to (but subject to) the Closing, the Founder Shares and Founder Warrants will be
subject to the vesting and forfeiture provisions set forth in this Section 1.3 and will thereafter be converted into
an equal number of shares of SPAC Class A Shares or SPAC Warrants, respectively. Other than as described on Schedule II hereto, the Sponsor
agrees that it will not (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, file (or participate in the filing of) a registration statement with
the SEC or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16
of the Exchange Act, with respect to any Acquiror Common Shares or Founder Warrants owned by such Sponsor, (ii) 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 Acquiror Common
Shares or Founder Warrants owned by such Sponsor (clauses (i) and (ii) collectively, a “Transfer”) prior to the
Closing.


 


(b)   The
Founder Shares will vest or be forfeited immediately prior to the Merger as follows: (i) 4,250,000 of the Founder Shares owned by
the Sponsor will vest, and shall not be subject to forfeiture; (ii) if the Triggering Event has occurred as of immediately prior
to the Merger, 750,000 Founder Shares owned by the Sponsor will vest, and shall not be subject to forfeiture; and (iii) 2,500,000 Founder
Shares owned by the Sponsor shall be forfeited and cancelled for no consideration.


 


(c)   If
as of immediately prior to the Merger, the Triggering Event has occurred, then 750,000 Founder Shares owned by the Sponsor will at the
Closing be automatically forfeited and transferred to MBSC for no consideration, and no Person (other than MBSC) will have any further
right with respect thereto.


 


(d)   The
Founder Warrants will vest or be forfeited immediately prior to the Merger as follows: (i) 2,526,667 of the Founder Warrants owned
by the Sponsor will vest, and shall not be subject to forfeiture; and (ii) 3,260,000 Founder Warrants owned by the Sponsor shall be forfeited
and cancelled for no consideration.


 


Section 1.4 Sponsor Payment. Promptly
following (but in no event more than two (2) Business Days after) the Closing, Sponsor shall pay $1,000,000 to the Company payable by
wire transfer of immediately available funds.


 


Section 1.5 No
Inconsistent Agreement. The Sponsor hereby covenants and agrees that it will not enter into any agreement that would restrict, limit
or interfere with the performance of its obligations hereunder.


 






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ARTICLE II


 


MISCELLANEOUS


 


Section 2.1 Representations
and Warranties.


 


(a)   Authorization;
No Breach. Each of the Sponsor, MBSC, PubCo and the Company hereby represents and warrants that it has all requisite corporate or
limited liability company power, as applicable, to enter into this Agreement and to perform its obligations hereunder, and no agreement
to which it is bound will be violated as a result. The execution, delivery and performance of this Agreement has been duly and validly
authorized by all requisite corporate or limited partnership action, as applicable, and no other actions or proceedings on its part are
necessary to authorize the execution, delivery or performance of this Agreement. Each of the Sponsor, MBSC, PubCo and the Company hereby
represents and warrants that this Agreement constitutes a valid, legal and binding obligation of such Person (assuming that this Agreement
has been duly and validly authorized, executed and delivered by the other Persons party hereto), enforceable against such Person in accordance
with its terms, except (i) to the extent that enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other Laws affecting the enforcement of creditors’ rights generally and (ii) that the availability
of equitable remedies, including specific performance, is subject to the discretion of the court before which any proceeding thereof may
be brought.


 


(b)   Ownership
of the Subject MBSC Shares and Founder Warrants. The Sponsor hereby represents and warrants that it (i) is the beneficial or
record owner of the shares of SPAC Common Shares indicated on Schedule I hereto opposite the Sponsor’s name, free
and clear of any and all Liens, other than those created by this Agreement, the Governing Documents of MBSC, the SPAC Warrant Agreement,
the Business Combination Agreement and applicable securities Laws, (ii) has sole voting power over all of the Subject MBSC Shares
beneficially owned or owned of record by the Sponsor, (iii) as of the date hereof, does not own, beneficially or of record, any capital
stock or other securities of MBSC other than the shares of Subject MBSC Shares and Founder Warrants set forth on Schedule I opposite
the Sponsor’s name, and (iv) as of the date hereof, does not own, beneficially or of record, any rights to purchase or acquire
any shares of capital stock or other securities of MBSC except as set forth on Schedule I opposite the Sponsor’s name (other
than pursuant to the Business Combination Agreement).


 


(c)   No
Inconsistent Agreement. The Sponsor hereby represents and warrants that the Sponsor (i) has not entered into any voting agreement,
voting trust or similar agreement (other than this Agreement and the Investor Rights Agreement to be entered into at the Closing) with
respect to any of the Subject MBSC Shares indicated on Schedule I hereto opposite the Sponsor’s name, (ii) has not granted
a proxy, consent or power of attorney with respect to any such Subject MBSC Shares and (iii) has not taken any action that would
reasonably be expected to constitute a breach hereof, make any representation or warranty of the Sponsor contained herein untrue or incorrect
or have the effect of restricting, limiting, preventing, interfering or disabling the Sponsor from performing any of its obligations under
this Agreement.


 


(d)   Governmental
Authorizations; Litigation. The Sponsor hereby represents and warrants that (i) except for filings with the SEC under the Exchange
Act and such other reports under, and such other compliance with, the Exchange Act as may be required in connection with this Agreement,
no authorization or approval or other action by, and no notice to or filing with, any Governmental Entity or any other Person will be
required to be obtained or made by the Sponsor in connection with the due execution, delivery and performance by the Sponsor of this Agreement,
and (ii) as of the date of this Agreement, there are no Actions pending or, to the knowledge of the Sponsor, threatened against the
Sponsor, before any Governmental Entity that, in the case of each of clauses (i) and (ii), would prevent,
materially impair or materially delay the Sponsor from performing its obligations hereunder.


 






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Section 2.2 Termination.
This Agreement and all of its provisions shall terminate and be of no further force and effect upon the earlier of (a) the
valid termination of the Business Combination Agreement in accordance with Article X thereof and (b) the written agreement of each
Sponsor, MBSC and the Company in accordance with Section 2.8. Upon such termination of this Agreement, all obligations
of the parties under this Agreement will terminate, without any Liability or other obligation on the part of any party hereto to any Person
in respect hereof or the transactions contemplated hereby, and no party hereto shall have any claim against another (and no Person shall
have any rights against such party), whether under contract, tort or otherwise, with respect to the subject matter hereof; provided, however,
that the termination of this Agreement shall not relieve any party hereto from Liability arising in respect of any breach of this Agreement
prior to such termination. This Article II shall survive the termination of this Agreement.


 


Section 2.3 Governing
Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions
contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect
to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another
jurisdiction.


 


Section 2.4 Jurisdiction;
Waiver of Jury Trial.


 


(a)   Any
Action based upon, arising out of or related to this Agreement or the transactions contemplated hereby must be brought in the Court of
Chancery of the State of Delaware (or, to the extent such court does not have subject matter jurisdiction, the Superior Court of the State
of Delaware), or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and each of
the parties irrevocably and unconditionally (i) consents and submits to the exclusive jurisdiction of each such court in any such
Action, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii) agrees
that all claims in respect of the Action shall be heard and determined only in any such court, and (iv) agrees not to bring any Action
arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall
be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence any Action or otherwise proceed
against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this Section 2.4.


 


(b)   EACH
PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY
IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.


 






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Section 2.5 Assignment.
No party hereto shall assign this Agreement or any part hereof without the prior written consent of the other parties and any such transfer
without prior written consent shall be void. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective permitted successors and assigns.


 


Section 2.6 Rights
of Third Parties. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person,
other than the parties hereto, any right or remedies under or by reason of this Agreement.


 


Section 2.7 Enforcement.
The parties hereto agree that irreparable damage could occur in the event that any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent any breach, or threatened breach, of this Agreement and to specific enforcement of the terms and
provisions of this Agreement, in addition to any other remedy to which any party is entitled at law or in equity. In the event that any
Action shall be brought in equity to enforce the provisions of this Agreement, no party shall allege, and each party hereby waives the
defense, that there is an adequate remedy at law, and each party agrees to waive any requirement for the securing or posting of any bond
in connection therewith.


 


Section 2.8  Modification
or Amendment; Waiver. Subject to the provisions of applicable Law, this Agreement may be amended, modified or waived if such amendment,
modification or waiver is in writing and signed, in the case of an amendment or modification, by MBSC, PubCo, the Company and the Sponsor,
or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any
right, power or privilege hereunder or under applicable Law shall operate as a waiver of such rights and, except as otherwise expressly
provided herein, no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided
by applicable Law.


 


Section 2.9 Severability.
If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this
Agreement shall remain in full force and effect. The parties further agree that if any provision contained herein is, to any extent, held
invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining
provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or
otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable
provision giving effect to the intent of the parties.


 


Section 2.10 Notices.
All notices and other communications among the parties shall be in writing and shall be deemed to have been duly given (a) when delivered
in person, (b) when delivered by FedEx or other nationally recognized overnight delivery service, or (c) when sent by email,
unless the sender of such electronic mail receives a non-delivery message (but not other automated replies, such as an out-of-office notification),
addressed as follow:


 






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If to MBSC, to:



M3-Brigade Acquisition III Corp.

1700 Broadway, 19th Floor

New York, NY 10019


	 	Attention: 	Mohsin Y. Meghji; Charles Garner
	 	Email:	mmeghji@m3-partners.com; cgarner@m3-partners.com



 


with a copy (which shall not constitute
notice) to:



Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, NY 10019


	 	Attention: 	John L. Robinson
	 	Email:	JLRobinson@wlrk.com



 


If to PubCo, to:



c/o Greenfire Resources Inc.

1900 – 205 5th Avenue SWCalgary, AB T2P 2V7


	 	Attention: 	David Phung
	 	Email:	DPhung@greenfireres.com






 


with a copy (which will not constitute
notice) to:



Carter Ledyard & Milburn LLP

28 Liberty Street, 41st Floor

New York, NY 10005


	 	Attention:	Guy P. Lander
	 	Email:	lander@clm.com






 


If to the Company, to:



Greenfire Resources Inc.

1900 – 205 5th Avenue SWCalgary, AB T2P 2V7


	 	Attention: 	David Phung
	 	Email:	DPhung@greenfireres.com



 






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with a copy (which shall not constitute
notice) to:



Carter Ledyard & Milburn LLP

28 Liberty Street, 41st Floor

New York, NY 10005





	 	Attention:	Guy P. Lander
	 	Email:	lander@clm.com








 


If to the Sponsor, to:



M3-Brigade Sponsor III LP

1700 Broadway, 19th Floor

New York, NY 10019


	 	Attention:	Mohsin Y. Meghji; Charles Garner
	 	Email:	mmeghji@m3-partners.com; cgarner@m3-partners.com






 


with a copy (which shall not constitute
notice) to:



Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, NY 10019





	 	Attention:	John L. Robinson
	 	Email:	JLRobinson@wlrk.com





 


Section 2.11 Headings;
Counterparts. The headings in this Agreement are for convenience only and shall not be considered a part of or affect the construction
or interpretation of any provision of this Agreement. This Agreement may (a) be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument and (b) be executed by facsimile
or .pdf signature and a facsimile or .pdf signature shall constitute an original for all purposes.


 


Section 2.12 Entire
Agreement. This Agreement, the agreements referenced herein and any applicable agreements contemplated by the Business Combination
Agreement to which the Sponsor is a party (including the Investor Rights Agreement to be entered into at the Closing) constitute the entire
agreement among the parties to this Agreement relating to the transactions contemplated hereby and supersede any other agreements, whether
written or oral, that may have been made or entered into by or among any of the parties hereto or any of their respective Subsidiaries
relating to the transactions contemplated hereby. No representations, warranties, covenants, understandings, agreements, oral or otherwise,
relating to the transactions contemplated hereby exist between such parties except as expressly set forth in this Agreement, the agreements
referenced herein and any applicable agreements contemplated by the Business Combination Agreement to which the Sponsor is a party (including
the Investor Rights Agreement to be entered into at the Closing).


 


[Remainder of Page Intentionally Left Blank;
Signature Pages Follow]


 






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IN WITNESS WHEREOF, Sponsor, MBSC, PubCo and the
Company have each caused this Sponsor Agreement to be duly executed as of the date first written above.





 



	 	SPONSOR:
	 	 
	 	M3-BRIGADE SPONSOR III LP
	 	 	 
	 	By: 	M3-Brigade Acquisition Partners III Corp., its general partner
	 	 	 
	 	By:	/s/ Mohsin Y. Meghji
	 	Name:	Mohsin Y. Meghji
	 	Title:	Authorized Person



 


[Signature Page to Sponsor Agreement]


 






     


     


    




 


	 	MBSC:
	 	 
	 	M3-BRIGADE ACQUISITION III CORP.
	 	 	 
	 	By:	/s/ Mohsin Y. Meghji
	 	Name:	Mohsin Y. Meghji
	 	Title:	Executive Chairman of the Board of Directors



 


[Signature Page to Sponsor Agreement]


 






     


     


    

 


	 	PUBCO:
	 	 
	 	GREENFIRE RESOURCES LTD.
	 	 	 
	 	By:	/s/ David Phung
	 	 	Name: 	David Phung
	 	 	Title:	Chief Financial Officer


 


[Signature Page to Sponsor Agreement]


 



     


     


    




 


	 	COMPANY:
	 	 
	 	GREENFIRE RESOURCES INC.
	 	 	 
	 	By:	/s/ David Phung
	 	 	Name: 	David Phung
	 	 	Title:	Chief Financial Officer


 


[Signature Page to Sponsor Agreement]


 






     


     


    







 





Schedule I


 


	
    Sponsor
	
    SPAC Class
    B Shares
	
    SPAC Warrants

	M3-Brigade Sponsor III LP 	7,500,000	5,786,667


 




    	 



    	 



    

 


Schedule II


 


		●	The Sponsor intends to Transfer 400,000 SPAC Class B Shares to HT Investments LLC in connection with the termination of that certain
Forward Purchase Agreement, dated as October 21, 2021, by and between SPAC and M3-Brigade III FPA LP.