Exhibit 10.7


 


THIS PROMISSORY NOTE (THIS “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 MAKER THAT SUCH REGISTRATION IS NOT
REQUIRED.  


 


PROMISSORY NOTE


 


	Principal Amount:  Up to $300,000	Dated as of April 28, 2021




 


Monterey Bio Acquisition Corporation, a
Delaware corporation (the “Maker”), promises to pay to the order of NorthStar Bio Ventures, LLC, a Delaware limited
liability company, or its registered assigns or successors in interest (the “Payee”),
or order, the principal sum of Three Hundred Thousand Dollars ($300,000), or such lesser amount as shall have been advanced by Payee to
Maker and shall remain unpaid under this Note, 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 Note shall be payable on the earlier of: (i) September 30, 2021 and (ii) the date on which Maker consummates an initial
public offering of its securities (the “IPO”). 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. The principal of this Note may be drawn down from time to time prior to the earlier of: (i) September 30, 2021 and
(ii) the date on which Maker consummates the IPO, upon request from Maker to Payee (each, a “Drawdown Request”). Payee
shall fund each Drawdown Request within two (2) business days after receipt of a Drawdown Request; provided, however, that the
maximum amount of drawdowns collectively under this Note is Three Hundred Thousand Dollars ($300,000). 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.


 


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 in Section 1 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.


 






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(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 thereunder, 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) or 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, on 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 Agreement shall be in writing and delivered:
(i) personally or sent by first class registered or certified mail, overnight courier service to the address designated in writing
by such party, (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 mail, one (1) business day after delivery to an overnight
courier service or five (5) days after mailing if sent by mail.


 






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10.       Construction. THIS
NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE 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 IPO and the proceeds of the sale of the units issued in private placements to occur prior to the consummation 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.


 


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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
    BIO ACQUISITION CORPORATION
	 	 
	 	By:	/s/
    Sanjeev Satyal
	 	Name:
    Sanjeev Satyal
	 	Title:
      Chief Executive Officer




 


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