Exhibit 10.2


 





[●], 2023


 


Unit 1006, Block C, Jinshangjun Park

No. 2 Xiaoba Road, Panlong District

Kunming, Yunnan, China


 


Re: Initial Public Offering


 


Ladies and Gentlemen:


 


This letter (this “Letter Agreement”) is
being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) to be entered
into by and between Distoken Acquisition Corporation, a Cayman Islands exempted company (the “Company”), and
EarlyBirdCapital, Inc. (the “Representative”), as the representative of the several underwriters (the “Underwriters”),
relating to an underwritten initial public offering (the “Public Offering”) of up to 5,750,000 of the Company’s
units (including up to 750,000 units that may be purchased to cover over-allotments, if any) (the “Units”),
each comprised of one Class A ordinary share of the Company, par value $0.0001 per share (the “Class A ordinary shares”),
one warrant (each whole warrant, a “Warrant”) and one right (the “Right”). Each Warrant
entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. Each Right entitles
the holder thereof to receive one-tenth (1/10) of one Class A ordinary share upon the consummation of the Company’s initial business
combination, subject to adjustment. The Units shall be sold in the Public Offering pursuant to a registration statement on Form S-1 and
prospectus (the “Prospectus”) filed by the Company with the Securities and Exchange Commission (the “Commission”)
and the Company shall apply to have the Units listed on the Nasdaq Capital Market. Certain capitalized terms used herein are defined in
paragraph 10 hereof.


 


In order to induce the Company and the
Underwriters to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Xiaosen Sponsor LLC, a Cayman Islands limited liability company (the
 “Sponsor”), and the other undersigned persons (each, an “Insider” and collectively,
the “Insiders”), hereby agrees with the Company as follows:


 


1.       The
Sponsor and each Insider agrees that if the Company seeks shareholder approval of a proposed Business Combination (as defined below),
then in connection with such proposed Business Combination, it, he or she shall (i) vote any Shares owned by it, him or her in
favor of any proposed Business Combination and (ii) not redeem any Shares owned by it, him or her in connection with such shareholder
approval.


 


2.       The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within 12 months
from the closing of the Public Offering (or up to 21 months from the closing of the Public Offering if the Company extends the period
of time to consummate a Business Combination, as described in more detail in the Prospectus), or such later period approved by the Company’s
shareholders in accordance with the Company’s amended and restated memorandum and articles of association, the Sponsor and each
Insider shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but not more than ten (10) business days thereafter, subject to lawfully available funds therefor, redeem
100% of the Class A ordinary shares sold as part of the Units in the Public Offering (the “Offering Shares”),
at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which
interest shall be net of taxes payable and less up to $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 each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors
and other requirements of applicable law. The Sponsor and each Insider agrees to not propose any amendment to the Company’s amended
and restated memorandum and articles of association (a) that would affect the ability of Public Shareholders to exercise redemption rights
with respect to the Offering Shares or modify the substance or timing of the Company’s obligation to redeem 100% of the Offering
Shares if the Company does not complete a Business Combination within 12 months (or up to 21 months) from the closing of the Public Offering,
or (b) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity, unless
the Company provides its Public Shareholders with the opportunity to redeem their Offering Shares upon approval of any such amendment
at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which
interest shall be net of taxes payable), divided by the number of then outstanding Offering Shares.


 






     


     


    

 


The Sponsor and each Insider acknowledges that
it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of
the Company as a result of any liquidation of the Company with respect to the Founder Shares (as defined below) held by it. The Sponsor
and each Insider hereby further waives, with respect to any Shares held by it, him or her, if any, any redemption rights it, he or she
may have in connection with the consummation of a Business Combination, including, without limitation, any such rights available in the
context of a shareholder vote to approve such Business Combination or in the context of a tender offer made by the Company to purchase
Class A ordinary shares (although the Sponsor and the Insiders shall be entitled to redemption and liquidation rights with respect to
any Offering Shares it or they hold if the Company fails to consummate a Business Combination within 12 months (or up to 21 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).


 


3.       In
the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any other equity
holders, members or managers of the Sponsor) agrees to indemnify and hold harmless the Company against any and all loss, liability, claim,
damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating,
preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) to which the Company may become
subject as a result of any claim by (i) any third party (other than the Company’s independent public accountants) for services
rendered or products sold to the Company or (ii) a prospective target business with which the Company has discussed entering into a transaction
agreement (a “Target”); provided, however, that such indemnification of the Company
by the Sponsor shall apply only to the extent necessary to ensure that such claims by a third party for services rendered (other than
the Company’s independent public accountants) or products sold to the Company or a Target do not reduce the amount of funds in
the Trust Account to below (i) $10.30 per share of the Offering Shares or (ii) such lesser amount per share of the Offering Shares held
in the Trust Account due to reductions in the value of the trust assets as of the date of the liquidation of the Trust Account, in each
case, net of the amount of interest earned on the property in the Trust Account which may be withdrawn to pay taxes, except as to any
claims by a third party (including a Target) who executed a waiver of any and all rights to seek access to the Trust Account and except
as to any claims under the Company’s indemnity of the Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. In the event that any such executed waiver is deemed to be unenforceable against such third party,
the Sponsor shall not be responsible to the extent of any liability for such third party claims. The Sponsor shall have the right to
defend against any such claim with counsel of its choice reasonably satisfactory to the Company if, within 15 days following written
receipt of notice of the claim to the Sponsor, the Sponsor notifies the Company in writing that it shall undertake such defense.


 


4.       To
the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 750,000 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 187,500 multiplied by a fraction, (i) the numerator of which is 750,000 minus the
number of Units purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is
750,000.


 


All references in this Letter Agreement to Founder
Shares of the Company being forfeited shall take effect as surrenders for no consideration of such Founder Shares as a matter of Cayman
Islands law. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriters
so that the Founder Shares will represent 20.0% of the Company’s issued and outstanding Shares after the Public Offering (assuming
the Initial Shareholders do not purchase any units in the Public Offering and excluding the Representative Shares and Private Shares).
The Initial Shareholders further agree that to the extent that the size of the Public Offering is increased or decreased, the Company
will effect a capitalization or share repurchase or redemption or other appropriate mechanism, as applicable, immediately prior to the
consummation of the Public Offering in such amount as to maintain the ownership of the Initial Shareholders prior to the Public Offering
at 20.0% of the Company’s issued and outstanding Shares upon the consummation of the Public Offering (assuming the Initial Shareholders
do not purchase any units in the Public Offering and excluding the Representative Shares and Private Shares). In connection with such
increase or decrease in the size of the Public Offering, then (A) the references to 750,000 in the numerator and denominator of the formula
in the first sentence of this paragraph shall be changed to a number equal to 15% of the number of Class A ordinary shares included in
the Units issued in the Public Offering and (B) the reference to 187,500 in the formula set forth in the immediately preceding sentence
shall be adjusted to such number of Founder Shares that the Founder Shares would represent an aggregate of 20.0% of the Company’s
issued and outstanding Shares after the Public Offering (assuming the Initial Shareholders do not purchase any units in the Public Offering
and excluding the Representative Shares).


 






     


     


    

 


5.       The
Sponsor and each Insider hereby agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably injured
in the event of a breach by such Sponsor or Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 6(a), 6(b) and
8 of this Letter Agreement (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party
shall be entitled to seek injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the
event of such breach.


 


6.       (a)
The Sponsor and each Insider agrees that it, he or she shall not Transfer (as defined below) any Founder Shares (or Class A ordinary
shares issuable upon conversion thereof) until the earlier of (A) one year after the completion of the Company’s initial
Business Combination or (B) subsequent to the Business Combination, (x) with respect to 50% of the Founder Shares, if the last
reported sale price of the Class A ordinary shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends,
rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading
day period commencing at least 150 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 Class A 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 Units (including the Private Shares and the Private
Warrants) 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 paragraphs 6(a) and 6(b), Transfers of the Founder Shares and Private Units (including the Private
Shares and the Private Warrants), are permitted (a) to the Company’s officers or directors, any affiliates or family members
of any of the Company’s officers or directors, any members of the Sponsor or any affiliates of the Sponsor; (b) in the case
of an individual, by gift to a member of the individual’s immediate family, or to a trust, the beneficiary of which is a
member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (c) in the case
of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual,
pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of
the Company’s Business Combination at prices no greater than the price at which the securities were originally purchased;
(f) in the event of the Company’s liquidation prior to the Company’s completion of an initial Business Combination;
(g) by virtue of the laws of the Cayman Islands or the Sponsor’s limited liability company agreement, as amended from time
to time, upon termination or dissolution of the Sponsor; or (h) in the event of the Company’s completion of a liquidation,
merger, amalgamation, share exchange, reorganization or other similar transaction which results in all of the Company’s shareholders
having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to the completion
of the Company’s initial Business Combination; provided, however, that, except in the case of clause (f) or with the Company’s
prior consent, these permitted transferees (the “Permitted Transferees”) must enter into a written agreement
with the Company agreeing to be bound by the transfer restrictions in this Agreement.


 


7.       The
Sponsor and each Insider represents and warrants that it, he or she has never been suspended or expelled from membership in
any securities or commodities exchange or association or had a securities or commodities license or registration denied,
suspended or revoked. Each Insider’s biographical information furnished to the Company, if any (including any such
information included in the Prospectus), is true and accurate in all respects and does not omit any material information with
respect to such Insider’s background. The Sponsor and each Insider’s questionnaire furnished to the Company, if
any, is true and accurate in all respects. The Sponsor and each Insider represents and warrants that: it, he or she is not
subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist
or refrain from any act or practice relating to the offering of securities in any jurisdiction; it, he or she has never been
convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of
funds of another person, or (iii) pertaining to any dealings in any securities and it, he or she is not currently a defendant
in any such criminal proceeding.


 






     


     


    

 


8.       Except
as disclosed in the Prospectus, neither the Sponsor nor any Insider nor any affiliate of the Sponsor or any Insider, nor any director
or officer of the Company, shall receive from the Company any finder’s fee, reimbursement, consulting fee, monies in respect
of any repayment of a loan or other compensation prior to, or in connection with any services rendered in order to effectuate the
consummation of the Company’s initial Business Combination (regardless of the type of transaction that it is).


 


9.       The
Sponsor and each Insider has full right and power, without violating any agreement to which it is bound (including, without limitation,
any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and,
as applicable, to serve as an officer and/or director on the board of directors of the Company and hereby consents to being named
in the Prospectus as an officer/and or director of the Company.


 


10.       As
used herein, (i) “Business Combination” shall mean a merger, amalgamation, share exchange, asset acquisition,
share purchase, reorganization or similar business combination, involving the Company and one or more businesses; (ii) “Shares”
shall mean, collectively, the Class A ordinary shares and the Class B ordinary shares; (iii) “Founder Shares”
shall mean the 1,437,500 Class B ordinary shares, par value $0.0001 per share, issued and outstanding immediately prior to the consummation
of the Public Offering; (iv) “Initial Shareholders” shall mean the Sponsor and any Insider that holds Founder
Shares; (v) “Private Units” shall mean the 500,000 units (or up to 545,000 units if the over-allotment option
is exercised in full), each comprised of one Class A ordinary share, one Warrant and one Right, that the Sponsor has agreed to purchase
for an aggregate purchase price of $5,000,000 in the aggregate (or up to $5,450,000 if the over-allotment option is exercised in full),
or a purchase price of $10.00 per Private Unit, in a private placement that shall occur simultaneously with the consummation of the Public
Offering; (vi) “Private Shares” shall mean the Class A ordinary shares underlying the Private Units, (vii) “Private
Warrants” shall mean the warrants underlying the Private Units, (viii) “Public Shareholders” shall
mean the holders of securities issued in the Public Offering; (ix) “Trust Account” shall mean the trust fund
into which a portion of the net proceeds of the Public Offering shall be deposited; (x) “Representative Shares”
shall mean the 278,000 Class B ordinary shares, par value $0.0001 per share, issued to the Representative and outstanding immediately
prior to the consummation of the Public Offering; and (xi) “Transfer” shall mean the (a) sale or assignment
of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement
to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease
of a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, (the “Exchange
Act”), and the rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into
any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security,
whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any
intention to effect any transaction specified in clause (a) or (b).


 


11.     This
Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof
and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the
extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not
be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by
a written instrument executed by the Sponsor and each Insider that is the subject of any such change, amendment modification or
waiver.


 


12.      No
party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior
written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual and
shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding
on the Sponsor and each Insider and their respective successors, heirs and assigns and Permitted Transferees.


 






     


     


    

 


13.       This
Letter Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.


 


14.       This
Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore, in lieu of any such
invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Letter Agreement
a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.


 


15.       This
Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this
Letter Agreement shall be brought and enforced in the courts of New York City, in the State of New York, and irrevocably submit
to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive
jurisdiction and venue or that such courts represent an inconvenient forum.


 


16.       Any
notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery
or facsimile transmission.


 


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


 


18.       This
Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation of the Company; provided, however,
that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated and closed by December 31,
2023; provided further that paragraph 3 of this Letter Agreement shall survive such liquidation.


 






     


     


    

 


	 	
        Sincerely,

        

        Xiaosen Sponsor LLC

         

	 	By:	 
	 	 	Name:	Jian Zhang
	 	 	Title:	Managing Member
	 	 	 	 


 


	 	 
	 	Jian Zhang


 


	 	 
	 	Jirong Lyu


 


	 	 
	 	Yiwen Ma


 


	 	Zhanming Zhang
	 	 
	 	John Wallace


 


	 	 
	 	Joseph Valenza


 


	 	 
	 	Ning Wang


 


	
        Acknowledged and Agreed:

         

        DISTOKEN ACQUISITION CORPORATION

         
	 
	By:	 	 
	 	Name:     	Jian Zhang	 
	 	Title:	Chief Executive Officer	 


 


[Signature Page - Letter Agreement]