Exhibit 10.3


 



THIS PROMISSORY NOTE (“NOTE”) HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT
ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR
AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.


 


AMENDED AND RESTATED PROMISSORY NOTE


 


	Principal Amount:
Up to $400,000	Dated as of February 14,
2022






New York, New York


 


THIS AMENDED AND RESTATED
PROMISSORY NOTE (this “Note”) is made as of this 14th day of February, 2022, by Monterey Capital Acquisition Corporation,
a Delaware corporation and blank check company (the “Maker”), in favor of Monterrey Acquisition Sponsor, LLC, a Delaware
limited liability company, or its registered assigns or successors in interest (the “Payee”).


 


RECITALS


 


WHEREAS,
on October 6, 2021, the Maker issued a promissory note in favor of the Payee in an aggregate principal amount of up to Three Hundred
Thousand Dollars ($300,000) (the “Original Note”), and on February 14, 2022, the Maker borrowed Three Hundred
Thousand Dollars ($300,000) thereunder (the “Initial Borrowing”), leaving none of the principal amount available for
borrowing as of the date hereof; and


 


WHEREAS,
the Maker and the Payee desire to amend and restate the Original Note to increase the amount of the Original Note in accordance with Section 13
of the Original Note.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Original
Note is hereby amended and restated as follows:


 


Maker promises to pay to the
order of Payee, or order, the principal sum of up to Four Hundred Thousand Dollars ($400,000) in lawful money of the United States of
America, on the terms and conditions described below. All payments on this Note shall be made by check or wire transfer of immediately
available funds or as otherwise determined by the Maker to such account as the Payee may from time to time designate by written notice
in accordance with the provisions of this Note.


 


1.             Principal.
The principal balance of this Note shall be payable by the Maker on the earlier of: (i) June 24, 2022 or (ii) the date
on which Maker consummates an initial public offering of its securities. The principal balance may be prepaid at any time. Under no circumstances
shall any individual, including but not limited to any officer, director, employee or shareholder of the Maker, be obligated personally
for any obligations or liabilities of the Maker hereunder.


 


2.             Interest.
No interest shall accrue on the unpaid principal balance of this Note.


 






     


     


    

 


3.              Drawdown
Requests. Maker and Payee agree that Maker may request up to Four Hundred Thousand Dollars ($400,000)
for costs reasonably related to Maker’s initial public offering of its securities. The principal of this Note may be drawn down
from time to time prior to the earlier of: (i) June 24, 2022 or (ii) the date on which Maker consummates an initial public
offering of its securities, upon written request from Maker to Payee (each, a “Drawdown Request”). Each Drawdown Request
must state the amount to be drawn down, and must not be an amount less than Ten Thousand Dollars ($10,000) unless agreed upon by Maker
and Payee. Payee shall fund each Drawdown Request no later than five (5) business days after receipt of a Drawdown Request; provided,
however, that the maximum amount of drawdowns collectively under this Note is Four Hundred Thousand Dollars ($400,000). Once an amount
is drawn down under this Note, it shall not be available for future Drawdown Requests even if prepaid. No fees, payments or other amounts
shall be due to Payee in connection with, or as a result of, any Drawdown Request by Maker. Notwithstanding the foregoing, all payments
shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation)
reasonable attorneys’ fees, and then to the reduction of the unpaid principal balance of this Note.


 


4               Application
of Payments. All payments shall be applied first to payment in full of any costs incurred in
the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in
full of any late charges and finally to the reduction of the unpaid principal balance of this Note.


 


5.              Events
of Default. The following shall constitute an event of default (“Event of Default”):


 


(a)             Failure
to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business days
of the date specified above.


 


(b)             Voluntary
Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation
or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for
the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate action
by Maker in furtherance of any of the foregoing.


 


(c)             Involuntary
Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an
involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation
of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.


 






     


     


    

 


6.             Remedies.


 


(a)             Upon
the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker, declare this
Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable hereunder, shall
become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.


 


(b)             Upon
the occurrence of an Event of Default specified in Sections 5(b) and 5(c), the unpaid principal balance of this Note, and all other
sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on
the part of Payee.


 


7.             Waivers.
Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest,
and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the
terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or
personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing
for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that
may be levied upon pursuant to a judgment obtained by virtue hereof or any writ of execution issued hereon, may be sold upon any such
writ in whole or in part in any order desired by Payee.


 


8.             Unconditional
Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance,
default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability
of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted
or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee
with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may
become parties hereto without notice to Maker or affecting Maker’s liability hereunder.


 


9.             Notices.
All notices, statements or other documents which are required or contemplated by this Note shall be made in writing and delivered: (i) personally
or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address
designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as
may be designated in writing by such party or (iii) by electronic mail, to the electronic mail address most recently provided to
such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted
shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation,
if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days
after mailing if sent by mail.


 


10.           Construction.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.


 






     


     


    

 


11.           Severability.
Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.


 


12.           Trust
Waiver. Notwithstanding anything herein to the contrary, the Payee hereby waives any and all
right, title, interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account to be
established in which the proceeds of the initial public offering (the “IPO”) to be conducted by the Maker (including
the deferred underwriters discounts and commissions) and the proceeds of the sale of the warrants to be issued in a private placement
to occur prior to the closing of the IPO are to be deposited, as described in greater detail in the registration statement and prospectus
to be filed with the Securities and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement,
payment or satisfaction for any Claim against the trust account for any reason whatsoever.


 


13.           Amendment;
Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with,
the written consent of the Maker and the Payee.


 


14.           Assignment.
No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or
otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall
be void.


 


[Signature page follows]


 






     


     


    

 


IN
WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as
of the day and year first above written.


 


	 	Monterey Capital Acquisition Corporation
	 	 
	 	By:	/s/ Bala Padmakumar
	 	 	Name: Bala Padmakumar
	 	 	Title: Chief Executive Officer