Exhibit 10.6


 


September 30, 2021


 


Monterey Bio Acquisition Corporation

17 State Street


21st Floor


New York, NY 10004


 


Ladies and Gentlemen:


 


Monterey Bio Acquisition Corporation
(the “Company”), a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition,
stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (a “Business
Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in
connection with its initial public offering (“IPO”), pursuant to a registration statement on Form S-1 (“Registration
Statement”).


 


The undersigned hereby commits
that it will purchase an aggregate of 3,750,000 warrants of the Company (“Private Warrants”), at a price of $1.00 per warrant
for an aggregate purchase price of $3,750,000 (the “Private Warrant Purchase Price”).


 


At least twenty-four (24)
hours prior to the effective date of the Registration Statement, the undersigned will cause the Private Warrant Purchase Price to be delivered
to Greenberg Traurig, LLP, as escrow agent, by wire transfer as set forth in the instructions attached as Exhibit A to hold in a non-interest
bearing account until the Company consummates the IPO.


 


The consummation of the purchase
and issuance of the Private Warrants shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation
of the IPO, Continental Stock Transfer & Trust Company (“Continental”) shall deposit $2,250,000 of the Private Warrant
Purchase Price, without interest or deduction, into the trust account (“Trust Account”) established by the Company for the
benefit of the Company’s public stockholders and the remaining $1,500,000 shall be used by the Company for working capital, each
as described in the Registration Statement.


 


Each of the Company and the
undersigned acknowledges and agrees that Greenberg Traurig, LLP is serving hereunder solely as a convenience to the parties to facilitate
the purchase of the Private Warrants.


 


Additionally, the undersigned
agrees:


 


		·	not to propose, or vote in favor of, prior to or unrelated to an initial Business Combination, an amendment to the Company’s
Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem
100% of the Company’s shares of common stock sold in the IPO if the Company does not complete an initial Business Combination within
12 months (or up to 21 months, if the time to complete a Business Combination is extended as described in the prospectus relating to the
IPO) from the closing of the IPO, unless the Company provides the holders of shares of common stock sold in the IPO with the opportunity
to redeem their shares of common stock 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 earned on the funds held in the Trust Account and not previously released
to the Company to pay the Company’s franchise and income taxes, divided by the number of then outstanding shares of common stock
sold in the IPO;



 


		·	the undersigned will not participate in any liquidation distribution with respect to the Private Warrants (but will participate in
liquidation distributions with respect to any units or common stock purchased by the undersigned in the IPO or in the open market) if
the Company fails to consummate a Business Combination;



 






     


     


    

 


		·	that the Private Warrants and underlying securities will not be transferable until 30 days after the consummation of a Business Combination
except (i) to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors
and any members or affiliates of the Company’s co-sponsors, (ii) by gift to a member of an individual’s immediate family or
to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable
organization, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order,
(v) by private sales or transfers made in connection with the consummation of an initial Business Combination at prices no greater than
the price at which the Private Warrants were originally purchased, (vi) in the event of the Company’s liquidation prior to the completion
of its initial Business Combination, (vii) by virtue of the laws of Delaware or NorthStar Bio Ventures, LLC’s liability company
agreement upon dissolution of NorthStar Bio Ventures, LLC, or (viii) to the Company for cancellation in connection with the consummation
of a Business Combination, in each case (except for clauses (vi) and (viii)) where the transferee agrees to the terms of the transfer
restrictions; and



 


		·	the Private Warrants will include any additional terms or restrictions as is customary in other similarly structured blank check company
offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth
in the Registration Statement.



 


The undersigned acknowledges
and agrees that the purchaser of the Private Warrants will execute agreements in form and substance typical for transactions of this nature
necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to
the undersigned, including but not limited to an insider letter.


 


The undersigned also acknowledges
to be bound by the terms of the private warrants described in the warrant agreement between the Company and Continental that will be executed
in connection with the Company’s IPO.


 


The undersigned hereby represents
and warrants that:


 


(a) it has been advised
that the Private Warrants have not been registered under the Securities Act;


 


(b) it will be acquiring
the Private Warrants for its account for investment purposes only;


 


(c) it has no present
intention of selling or otherwise disposing of the Private Warrants in violation of the securities laws of the United States;


 


(d) it is an “accredited
investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act;


 


(e) it has had both the
opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on its behalf concerning
the terms and conditions of the offer made hereunder;


 


(f) it is familiar with
the proposed business, management, financial condition and affairs of the Company;


 


(g) it has full power,
authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions
contemplated in this letter; and


 


(h) this letter constitutes
its legal, valid and binding obligation, and is enforceable against it.


 


This letter agreement constitutes
the entire agreement between the undersigned and the Company with respect to the purchase of the Private Warrants, and supersedes all
prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to the same.


 


[SIGNATURE PAGE FOLLOWS]


 






    2


     


    

 


Sincerely,


 


	 	Very truly yours,
	 	 
	 	NORTHSTAR BIO VENTURES, LLC
	 	 
	 	By:	 /s/ Sandip I. Patel
	 	 	Name:	 Sandip I. Patel
	 	 	Title:	 Manager


 


	Accepted and Agreed:	 
	 	 
	MONTEREY BIO ACQUISITION CORPORATION	 
	 	 
	By:	 /s/ Sanjeev Satyal	 
	 	Name: 	Sanjeev Satyal	 
	 	Title:	Chief Executive Officer	 



 


[Signature Page to Private Placement Warrants Purchase Agreement]


 






     


     


    

 


 Exhibit A


 


Wire Instructions