Exhibit
10.2


 


FORM
OF INSIDER’S LETTER


 


________________,
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-half of an Ordinary
Share (“Warrant”) and a right (“Right”) to receive 1/10th of an Ordinary Share.
Each Warrant entitles the holder thereof to purchase one-half of 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.


 






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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.


 


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.


 






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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.


 


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.


 






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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 to Letter Agreement]


 


	 	SPONSOR
	 	M-STAR
    MANAGEMENT CORPORATION
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	Officers and Directors


 






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	,	 Chairman and Chief Executive Officer
	 	 
	 	
	 	 
	,	  Chief Financial Officer
	 	 
	 	
	 	 
	,	  Director
	 	 
	 	
	 	 
	,	  Director
	 	 
	 	
	 	 
	,	 Director



 




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