Exhibit 10.1


 


INSIDER’S
LETTER


 


March
31, 2022


 


Metal
Sky Star Acquisition Corporation


132
West 31st Street, First Floor


New
York, New York, 10001


 


Underwriter
Representative


Ladenburg
Thalmann & Co., Inc.


 


	 	Re:	Metal
    Sky Star Acquisition Corporation Public Offering; Voting, Lock-Up and Waiver


 


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 Metal Sky Star Acquisition Corporation, a Cayman
Islands exempted company (the “Company”), and Ladenburg Thalmann & Co. Inc., as representative (the “Representative”)
of the several underwriters (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 (including up to 1,500,000 units that may be purchased to cover over-allotments, if any) (the “Units”),
each comprised of one of the Company’s ordinary shares, par value $0.001 per share (the “Ordinary Shares”),
one warrant to purchase one Ordinary Share (“Warrant”) and a right (“Right”) to receive 1/10th
of an Ordinary Share. 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 (File No.
333-260251) 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 and components thereof listed on the Nasdaq
Global Market. Certain capitalized terms used herein are defined in Section 12 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, M-Star Management Corporation
(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 (A) 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 and (ii) not redeem any Shares owned by it, him or her in connection with such shareholder
approval, (B) if the Company engages in a tender offer in connection with any proposed Business Combination, it, he or she shall
not sell any Shares to the Company in connection therewith and (C) if the Company seeks shareholder approval of any proposed amendment
to the Charter prior to the consummation of a Business Combination, it, he or she shall 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 the
time period set forth in 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 thereafter, subject to lawfully available funds therefor, 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 earned on the funds held in the Trust Account
and not previously released to the Company to pay any taxes (less up to $50,000 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 the case of clauses (ii) and
(iii) above 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 Charter (i) that would
affect 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 the time period described in the Prospectus or (ii) with respect to any other provision
relating to shareholders’ rights or pre-Business Combination activity, unless the Company provides its public shareholders
with the opportunity to redeem their Ordinary 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 earned on the funds held in the Trust
Account and not previously released to the Company to pay any taxes, divided by the number of then outstanding Offering
Shares.


 






     


     


    

 


3.
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, him or her. The Sponsor and each Insider hereby further waives any claim such Sponsor or Insider 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 except in each case with respect to the Insider’s right to a pro rata interest in the proceeds held in the
Trust Account for any Offering Shares such Sponsor or Insider may hold.


 


4. 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, or 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, and the rules and regulations of the Commission promulgated thereunder, with respect to any Units,
Ordinary Shares, Founder Shares, Warrants, Rights or any securities convertible into, or exercisable, or exchangeable for, Ordinary Shares
owned by it, him or her, (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 Units, Ordinary Shares, Founder Shares, Warrants, Rights or any securities convertible into,
or exercisable, or exchangeable for, Ordinary Shares owned by it, him or her, whether any such transaction is to be settled by delivery
of such securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause
(i) or (ii). 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 Section 4 or Section 8 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
Section 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.


 


5. 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 or products sold to the Company or (ii) a prospective
target business with which the Company has entered into a letter of intent, confidentiality or other similar agreement or a Business
Combination 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.


 


6. To
the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 1,500,000 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 375,000 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.


 


7. 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 an Insider of its, his or her obligations under Sections 1, 2, 3, 4, 5, 8(a), 8(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.


 






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8. (a) The
Sponsor and each Insider agrees that it, he or she shall not (a) Transfer 50% of their Founder Shares until the earlier of (A) six
months after the consummation of the Company’s initial Business Combination or (B) the date on which the closing price of
the Ordinary Shares equals or exceeds $12.50 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after
the Company’s initial Business Combination or (b) Transfer the remaining 50% of their Founder Shares until six months after
the date of the consummation of the Company’s initial Business Combination, or earlier in either case, if subsequent to the Company’s
initial Business Combination the Company completes a liquidation, merger, 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 Units (or Warrants and Ordinary Shares issued
or issuable upon the conversion of the Private Placement Units), 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 Sections 8(a) and (b), Transfers of the Founder Shares, Private Placement Units and Warrants and Ordinary
Shares issued or issuable upon the exercise or conversion of the Private Placement Units and that are held by the Sponsor, any Insider
or any of their permitted transferees (that have complied with this Section 8(c)), 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, transfers by gift to a member of the individual’s immediate
family, 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, transfers by virtue of laws of descent and distribution upon death
of the individual; (d) in the case of an individual, transfers pursuant to a qualified domestic relations order; (e) transfers
by private sales or transfers made in connection with the consummation of a Business Combination at prices no greater than the price
at which the securities were originally purchased; (f) transfers in the event of the Company’s liquidation prior to the completion
of an initial Business Combination; (g) transfers by virtue of the laws of the Cayman Islands or the Sponsor’s limited liability
company agreement upon dissolution of the Sponsor; (h) in the event of the Company’s liquidation, merger, 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;
and (i) transfers in connection with the Company’s initial Business Combination with the Company’s consent to any third
party; provided, however, that in the case of clauses (a) through (e), (h) and (i), these permitted transferees must enter
into a written agreement agreeing to be bound by the restrictions herein.


 


9. 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 or he 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 or he is not currently a defendant in any such criminal proceeding.


 


10.
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, or cash payments 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), other than the amounts described in the Prospectus under the heading “Summary – The
Offering – Limited Payments to Insiders.”


 


11. 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.


 






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12. As
used herein, (i) “Business Combination” shall mean a merger, share exchange, asset acquisition, stock
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 2,875,000 of the ordinary shares, par value $0.001 per share, initially issued to the Sponsor (up to 375,000 Shares of which are
subject to complete or partial forfeiture by the Sponsor if the over-allotment option is not exercised by the Underwriters) for an aggregate
purchase price of $25,000, or approximately $0.01 per share, 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
Units” shall mean the Units to purchase up to 300,000 Units which the Sponsor has agreed to purchase for an aggregate purchase
price of $3,000,000, or $10.00 per whole Private Placement Unit, in a private placement that shall occur simultaneously with the consummation
of the Public Offering (subject to increase to up to 300,000 units for the exercise of the over-allotment); (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 with Wilmington Trust Company;
(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 of the Securities Exchange Act of 1934, as amended, 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);
and (ix) “Charter” shall mean the Company’s amended and restated memorandum and articles of association,
as the same may be amended from time to time.


 


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 party. Any purported assignment in violation of this Section 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; provided, however, Ladenburg Thalmann & Co. Inc. as representative of the Underwriters shall be deemed a beneficiary
hereof and be entitled to enforce the provisions of this Agreement. 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.


 


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
and closed by October 30, 2022; provided further that Section 5 of this Letter Agreement shall survive such liquidation.


 


[Signature
Page Appears Next]


 






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	 	SPONSOR
	 	M-STAR
    MANAGEMENT CORPORATION
	 	 
	 	By:	/s/
    Man Chak Leung
	 	Name:	Man
Chak Leung
	 	Title:	Director


 


	/s/
    Man Chak Leung	 
	Man
    Chak Leung, Chairman and Chief Executive Officer 	 
	 	 
	/s/
    Wenxi He	 
	Wenxi
    He, Chief Financial Officer 	 
	 	 
	/s/
    Zhuo Wang	 
	Zhuo
    Wang, Director	 
	 	 
	/s/
    Zining Jiang	 
	Zining
    Jiang, Director	 
	 	 
	/s/
    Xinghua Fan	 


Xinghua
Fan, Director


 





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