Exhibit 10.1


 


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.


 


PROMISSORY NOTE


 


	Principal Amount:  Up to $100,000.00	Dated as of October 3, 2022


 


Mountain Crest Acquisition
Corp. III, a Delaware corporation and blank check company (the “Maker”), promises to pay to the order of Mountain Crest Holdings
III LLC or its registered assigns or successors in interest (the “Payee”), or order, the principal sum of up to one hundred
thousand Dollars ($100,000.00) 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) the date on which Maker consummates a business
combination with target businesses, or (ii) the date the Maker liquidates if a business combination is not consummated (the “Maturity
Date”). 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.          
Conversion. On the Maturity Date, Maker shall pay the Payee in cash in an amount equal to the outstanding principal amount of
Note; provided, however, that upon the written election of the Payee in its sole discretion, the Maker shall convert the outstanding
principal balance under the Note into private placement units (“Private Units”, each a “Private Unit”) at a conversion
price equal to $10 per unit, with each Private Unit consisting of one share of the Maker’s common stock and one right to receive
one-tenth (1/10) of a share of the Maker’s common stock upon the consummation of an initial business combination, as described
in the Maker’s final prospectus as filed with the SEC on May 19, 2021.


 


4.             Drawdown
Requests. The principal of this Note may be drawn down from time to time prior to the Maturity Date (each, a “Drawdown
Request”). Each Drawdown Request must state the amount to be drawn down. Payee shall fund each Drawdown Request no later than
three (3) business days after receipt of a Drawdown Request; provided, however, that the maximum amount of drawdowns collectively
under this Note is one hundred thousand Dollars ($100,000.00). 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.


 


5.            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.


 


6.             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.


 


7.            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.


 


8.            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.


 


9.             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.


 


10.          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.


 


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


 


12.          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.


 






     


     


    

 


13.          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 established in which the proceeds of the
Maker’s initial public offering (including the deferred underwriters discounts and commissions) and the proceeds of the sale of
the warrants issued in a private placement occurred prior to the closing of the initial public offering are to be deposited, as described
in greater detail in the registration statement and prospectus filed with the Securities and Exchange Commission in connection with the
aforementioned initial public offering, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against
the trust account for any reason whatsoever.


 


14.          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.


 


15.          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.


 


	 	MOUNTAIN CREST ACQUISITION CORP. III
	 	 
	 	By:	 /s/ Suying Liu
	 	 	Name: Suying Liu
	 	 	Title: Chief Financial Officer