Exhibit 10.1


 


Pearl
Holdings Acquisition Corp


767
Third Avenue, 11th Floor

New York, NY 10017


 


		Re:	Initial
Public Offering



 


Ladies
and Gentlemen:


 





This letter (this “Letter
Agreement”) is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”)
entered into or proposed to be entered into by and between Pearl Holdings Acquisition Corp, a Cayman Islands exempted company (the “Company”),
on the one hand, and Morgan Stanley & Co. LLC, on the other hand, as the representatives of the several underwriters named therein
(the “Underwriters”), relating to an underwritten initial public offering (the “Public Offering”),
of 20,125,000 of the Company’s units (“Units”) (including up to 2,625,000 Units that may be purchased
to cover additional units, if any), each comprised of one Class A ordinary share of the Company, par value $0.0001 per share (each, an
“Ordinary Share”), and one-half of one redeemable warrant (each whole warrant, a “Warrant”).
Each Warrant entitles the holder thereof to purchase one Ordinary Share at a price of $11.50 per share, subject to adjustment. The Units
shall be sold in the Public Offering pursuant to a registration statement on Form S-1 and a prospectus (the “Prospectus”)
filed by the Company with the Securities and Exchange Commission (the “Commission”). Certain capitalized terms
used herein are defined in paragraph 11 hereof.




 


In
order to induce the Company and the 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, Pearl Holdings Sponsor LLC,
a Cayman Islands limited liability company (the “Sponsor”), and the other undersigned persons (each, an “Insider”
and collectively, the “Insiders”), each hereby agrees with the Company as follows:


 


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


 






     


     


    

 


2.
The Sponsor and each Insider hereby agrees with the Company that in the event that the Company fails to consummate a Business Combination
within 18 months (or up to 24 months if the Sponsor exercises its extension options, as described in the Prospectus) from the closing
of the Public Offering, or such later period approved by the Company’s shareholders in accordance with the Company’s amended
and restated memorandum and articles of association, as they may be amended from time to time, the Sponsor and each Insider shall take
all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but not more than ten (10) business days thereafter, 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 (less up to $100,000 of
interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding
Offering Shares, which redemption will completely extinguish all Public Shareholders’ rights as shareholders (including the right
to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of the Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject
in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the 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 (i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection
with the Company’s initial Business Combination or to redeem 100% of the Offering Shares if the Company does not complete its initial
Business Combination within 18 months (or up to 24 months if the Sponsor exercises its extension options) from the closing of the
Public Offering, or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination
activity, unless the Company provides its Public Shareholders with the opportunity to redeem their Offering Shares upon approval of any
such amendment at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
(which interest shall be net of taxes payable), divided by the number of then issued and outstanding Offering Shares.


 


The
Sponsor and each Insider acknowledges that it, he or she has no right, title, interest or claim of any kind in or to any monies held
in the Trust Account or any other asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares
held by it. The Sponsor and each Insider hereby further waives, with respect to any Shares held by it, him or her, if any, any redemption
rights it, he or she may have in connection with (x) the consummation of a Business Combination, including, without limitation,
any such rights available in the context of a shareholder vote to approve such Business Combination or in the context of a tender offer
made by the Company to purchase Ordinary Shares and (y) a shareholder vote to amend the Company’s amended and restated memorandum
and articles of association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection
with the Company’s initial Business Combination or to redeem 100% of the Offering Shares if the Company does not complete its initial
Business Combination within 18 months (or up to 24 months if the Sponsor exercises its extension options) from the closing of the
Public Offering, or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination
activity (although the Sponsor and the Insiders shall be entitled to redemption and liquidation rights with respect to any Offering Shares
it or they hold if the Company fails to consummate a Business Combination within 24 months from the date of the closing of the Public
Offering).


 






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3.
Notwithstanding the provisions set forth in paragraphs 7(a) and (b) below, during the period commencing on the effective date of the
Underwriting Agreement and ending 180 days after such date, the Sponsor and each Insider shall not, without the prior written consent
of Morgan Stanley & Co. LLC, offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any transaction that is
designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise)), directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 (“Section 16”) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, with respect to, any Units, Shares,
Warrants or any securities convertible into, or exercisable, or exchangeable for, Ordinary Shares, or publicly announce an intention
to effect any such transaction; provided, however, that the foregoing does not apply to the forfeiture of any Founder Shares
pursuant to their terms or any transfer of Founder Shares to any current or future independent director of the company (as long as such
current or future independent director transferee is subject to this Letter Agreement or executes an agreement substantially identical
to the terms of this Letter Agreement, as applicable to directors and officers at the time of such transfer; and as long as, to the extent
any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation
as to the nature of the transfer). 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 paragraph 3 or paragraph 7 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 paragraph will not apply if the release or waiver is effected solely to permit a transfer not for consideration and
the transferee has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the duration
that such terms remain in effect at the time of the transfer.


 


4.
In the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any other
shareholders, members or managers of the Sponsor) agrees to indemnify and hold harmless the Company against any and all loss, liability,
claim, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating,
preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) to which the Company may become
subject as a result of any claim by (i) any third party for services rendered (other than the Company’s independent registered
public accountants) or products sold to the Company or (ii) a prospective target business with which the Company has discussed entering
into a transaction agreement (a “Target”); provided, however, that such indemnification of the
Company by the Sponsor shall apply only to the extent necessary to ensure that such claims by a third party for services rendered (other
than the Company’s independent registered public accountants) or products sold to the Company or a Target do not reduce the amount
of funds in the Trust Account to below (i) $10.00 per share of the Offering Shares or (ii) such lesser amount per share of the Offering
Shares held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets,
in each case, net of the amount of interest earned on the property in the Trust Account which may be withdrawn to pay taxes, except as
to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims
under the Company’s indemnity of the 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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5.
To the extent that the Underwriters do not exercise their option to purchase up to an additional 2,625,000 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 656,250, multiplied by a fraction, (i) the numerator of which is 2,625,000 minus the number
of Units purchased by the Underwriters upon the exercise of their option to purchase additional units, and (ii) the denominator of which
is 2,625,000. 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
option to purchase additional units is not exercised in full by the Underwriters so that the number of Founder Shares will equal an aggregate
of 20.0% of the Company’s issued and outstanding Shares after the Public Offering. 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, as applicable, immediately prior to the consummation of the Public Offering in such amount as to maintain the number of
Founder Shares at 20.0% of the Company’s issued and outstanding Shares upon the consummation of the Public Offering. In connection
with such increase or decrease in the size of the Public Offering, then (A) the references to 2,625,000 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 Ordinary Shares included
in the Units issued in the Public Offering and (B) the reference to 656,250 in the formula set forth in the immediately preceding sentence
shall be adjusted to such number of Founder Shares that the Sponsor would have to return to the Company in order for the number of Founder
Shares to equal an aggregate of 20.0% of the Company’s issued and outstanding Shares after the Public Offering.


 


6.
The Sponsor and each Insider hereby agrees and acknowledges that: (i) the 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, 5, 7(a), 7(b), and 9 of
this Letter Agreement, (ii) monetary damages may not be an adequate remedy for such breach, and (iii) the non-breaching party shall be
entitled to seek injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such
breach.


 


7.
(a) The Sponsor and each Insider agrees that it, he or she shall not Transfer (as defined below) any Founder Shares (or Ordinary Shares
issuable upon conversion thereof) until the earlier of (A) one year after the completion of the Company’s initial Business Combination
and (B) subsequent to the Business Combination, (x) if the last reported sale price of the Ordinary Shares equals or exceeds $12.00 per
share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and other similar transactions)
for any 20 trading days within any 30-trading day period commencing at least 120 days after the Company’s initial Business Combination
or (y) the date following the completion of the Company’s initial Business Combination on which the Company completes a liquidation,
merger, 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”).


 






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(b)
The Sponsor and each Insider agrees that it, he or she shall not Transfer any Private Placement Warrants (or Ordinary Shares issued or
issuable upon the exercise or conversion of the Private Placement Warrants), until 30 days after the completion of a Business Combination
(the “Private Placement Warrants Lock-up Period”, together with the Founder Shares Lock-up Period, the “Lock-up
Periods”).


 


(c)
Notwithstanding the provisions set forth in paragraphs 7(a) and (b), transfers of the Founder Shares, Private Placement Warrants and
Ordinary Shares issued or issuable upon the exercise or conversion of the Private Placement Warrants or the Founder Shares, are permitted
(a) to the Company’s directors or officers, any affiliates or family members of the Company’s directors or officers,
the Sponsor, 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 a trust, by distribution to one or more of the permissible beneficiaries
of such trust; (e) in the case of an individual, pursuant to a qualified domestic relations order; (f) by private sales or transfers
made in connection with the consummation of the Company’s Business Combination at prices no greater than the price at which the
securities were originally purchased; (g) in the event of the Company’s liquidation prior to the Company’s completion
of an initial Business Combination; (h) by virtue of the laws of the Cayman Islands or the Sponsor’s organizational documents,
as they may be amended from time to time, upon dissolution of the Sponsor; and (i) in the event of the Company’s completion
of a 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; provided, however, that, in the case of clauses (a) through (f), these permitted transferees
must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement.


 


8.
The Sponsor and each Insider represents and warrants that it, he or she has never been suspended or expelled from membership in any securities
or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked. Each
Insider’s biographical information furnished to the Company, if any (including any such information included in the Prospectus),
is true and accurate in all respects and does not omit any material information with respect to such Insider’s background. Each
Insider’s questionnaire furnished to the Company, if any, is true and accurate in all respects. Each Insider represents and warrants
that: it is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to
desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; it has never been convicted of,
or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person,
or (iii) pertaining to any dealings in any securities and it is not currently a defendant in any such criminal proceeding.


 






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9.
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), other than the following, none
of which will be made from the proceeds held in the Trust Account prior to the completion of the initial Business Combination: (i) repayment
of a loan and advances up to an aggregate of $300,000 made to the Company by the Sponsor; (ii) payment to the Sponsor of a total of $15,000
per month for office space, administrative and support services; (iii) payment of customary fees for financial advisory services; (iv)
reimbursement for any reasonable out-of-pocket expenses related to identifying, investigating and completing an initial Business Combination;
and (v) repayment of loans, if any, and on such terms as to be determined by the Company from time to time, made by the Sponsor or an
affiliate of the Sponsor or any of the Company’s officers or directors to finance transaction costs in connection with an intended
initial Business Combination; provided that if the Company does not consummate an initial Business Combination, a portion of the
working capital held outside the Trust Account may be used by the Company to repay such loaned amounts so long as no proceeds from the
Trust Account are used for such repayment. Up to $2,000,000 of such loans may be convertible into warrants at a price of $1.00 per warrant
at the option of the lender. The terms of such warrants would be identical to the terms of the Private Placement Warrants.


 


10.
The Sponsor and each Insider has full right and power, without violating any agreement to which it is bound (including, without limitation,
any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and, as
applicable, to serve as a director on the board of directors of the Company and hereby consents to being named in the Prospectus as a
director of the Company.


 


11.
As used herein, (i) “Business Combination” shall mean a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination, involving the Company and one or more businesses; (ii) “Shares”
shall mean, collectively, the Ordinary Shares and the Founder Shares; (iii) “Founder Shares” shall mean the
5,031,250 Class B Ordinary Shares, par value $0.0001 per share, issued and outstanding immediately prior to the consummation of
the Public Offering; (iv) “Initial Shareholders” shall mean the Sponsor and any other person that holds Founder
Shares; (v) “Private Placement Warrants” shall mean the Warrants to purchase an aggregate of 9,000,000 Ordinary
Shares of the Company (or up to 10,050,000 Ordinary Shares of the Company depending on the extent to which the Underwriters’ option
to purchase additional units is exercised pursuant to the Underwriting Agreement) that the Sponsor has agreed to purchase for an aggregate
purchase price of $9,000,000 (or up to $10,050,000 depending on the extent to which the Underwriters’ option to purchase additional
units is exercised pursuant to the Underwriting Agreement), or $1.00 per Warrant, in a private placement that shall occur simultaneously
with the consummation of the Public Offering; (vi) “Public Shareholders” shall mean the holders of securities
issued in the Public Offering; (vii) “Trust Account” shall mean the trust fund into which a portion of the
net proceeds of the Public Offering shall be deposited; and (viii) “Transfer” shall mean the (a) sale
of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement
to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease
of a call equivalent position within the meaning of Section 16, (b) entry into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be
settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction
specified in clause (a) or (b).


 






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12.
This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof
and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent
they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed,
amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument
executed by (1) each Insider that is the subject of any such change, amendment, modification or waiver and (2) the Sponsor.


 


13.
No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written
consent of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate
to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on the Sponsor and each
Insider and their respective successors, heirs and assigns and permitted transferees.


 


14.
This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. The parties
hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall
be brought and enforced in the courts of New York City, in the State of New York, and irrevocably submit to such jurisdiction and venue,
which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and venue or that such courts
represent an inconvenient forum.


 


15.
Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery
or facsimile or other electronic transmission.


 


16.
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.


 


17.
This Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods and (ii) the liquidation of the Company;
provided, however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated
and closed by December 31, 2021; provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.


 


18.
This Letter Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.


 


[Signature
page follows]


 






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	 	Sincerely,
	 	 
	 	PEARL HOLDINGS SPONSOR LLC
	 	 	 
	 	By:	/s/ Craig E. Barnett
	 		Name:	Craig E. Barnett
	 		Title:	Manager


 


[Signature
Page to Letter Agreement]


 






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	 	/s/ Craig E. Barnett
	 	Craig E. Barnett
	 	 
	 	/s/ Terry Duddy
	 	Terry Duddy
	 	 
	 	/s/ Martin F.
Lewis
	 	Martin F. Lewis
	 	 
	 	/s/ Scott M. Napolitano
	 	Scott M. Napolitano
	 	 
	 	/s/ James E. Lieber
	 	James E. Lieber
	 	 
	 	/s/ Mary C. Tanner
	 	Mary C. Tanner
	 	 
	 	/s/ Laura A. Weil
	 	Laura. A. Weil


 


[Signature
Page to Letter Agreement]


 






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	Acknowledged and Agreed: 	 
	 	 
	Pearl Holdings Acquisition Corp	 
	 	 
	By:	/s/ Craig E. Barnett	 
	 	Name:	Craig E. Barnett	 
	 	Title:	Chief Executive Officer	 


 


[Signature
Page to Letter Agreement]


 






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