Document:

Exhibit 10.1

 

May 10, 2022

 

Monterey Capital Acquisition Corporation

419 Webster Street

Monterey, CA 93940

 

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 by and among Monterey Capital Acquisition Corporation, a Delaware corporation (the “Company”),
and EF Hutton, division of Benchmark Investments, LLC, as representative (the “Representative”) of the several
underwriters (each, an “Underwriter” and collectively, the “Underwriters”), relating
to an underwritten initial public offering (the “Public Offering”), of 9,200,000 of the Company’s units
(including up to 1,200,000 units that may be purchased to cover over-allotments, if any) (the “Units”), each
comprised of one share of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”),
one redeemable warrant and one right to receive one-tenth (1/10) of one share of Common Stock (the “Rights”).
Each warrant (a “Warrant”) entitles the holder thereof to purchase one share of Common Stock at a price of $11.50
per share, subject to adjustment. The Units will be sold in the Public Offering pursuant to a registration statement on Form S-1
(File No. 333-264460) and prospectus (the “Prospectus”) filed by the Company with the U.S. Securities and
Exchange Commission (the “Commission”) and the Company has applied to have the Units listed on The Nasdaq Global
Market. 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, each of Monterrey Acquisition Sponsor, LLC, a Delaware limited
liability company (the “Sponsor”), and the undersigned individuals, each of whom is a member of the Company’s
board of directors and/or management team or an advisor of the Company (each, an “Insider” and collectively,
the “Insiders”), hereby agrees with the Company as follows:

 

1.             The
Sponsor and each Insider agrees that if the Company seeks stockholder approval of a proposed Business Combination, then in connection
with such proposed Business Combination, it, he or she shall (i) vote any shares of Capital Stock owned by it, him or her in favor
of any proposed Business Combination and (ii) not redeem any shares of Common Stock owned by it, him or her in connection with such
stockholder approval. If the Company engages in a tender offer in connection with any proposed Business Combination, the Sponsor and each
Insider agrees that it, he or she will not seek to sell its, his or her shares of Capital Stock to the Company in connection with such
tender offer.

 

    

     

    

 

2.             The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within the timeframe
set forth in the Company’s amended and restated certificate of incorporation, as it may be amended from time to time (the “Charter”),
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 10 business days thereafter, subject to lawfully available
funds therefor, redeem 100% of the Common Stock 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 (as defined below), including
interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes (less up to $100,000
of interest to pay dissolution expenses), divided by the number of then outstanding Offering Shares, which redemption will completely
extinguish all Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if
any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in the case
of clauses (ii) and (iii) to the Company’s obligations under Delaware law to provide for claims of creditors and other
requirements of applicable law. The Sponsor and each Insider agrees not to propose any amendment to the Charter to modify (i) the
substance or timing of the ability of holders of Offering Shares to allow redemption in connection with a Business Combination or amendments
to the Charter prior thereto or (ii) (A) the Company’s obligation to redeem 100% of the Offering Shares if the Company
does not complete a Business Combination within such time set forth in the Charter or (B) any other provisions relating to stockholders’
rights or pre-initial Business Combination activity, unless the Company provides its public stockholders 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 its taxes, divided by the number of then 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, him or her. The
Sponsor and each Insider hereby further waives, with respect to any shares of Common Stock held by it, him or her, if any, whether acquired
now or hereafter, any redemption rights it, he or she may have in connection with the consummation of a Business Combination or amendments
to the Charter prior thereto, including, without limitation, any such rights available in the context of a stockholder vote to approve
such Business Combination or a stockholder vote to approve an amendment to the Charter to modify (i) (A) the substance or timing
of the Company’s obligation to allow redemption in connection with a Business Combination or to redeem 100% of the Offering Shares
if the Company has not consummated a Business Combination within the time period set forth in the Charter or (B) any other provisions
relating to stockholders’ rights or pre-initial Business Combination activity or (ii) in the context of a tender offer made
by the Company to purchase shares of Common Stock (although the Sponsor, the Insiders and their respective affiliates 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 the time period set forth in the Charter).

 

    

     

    

 

3.         
    During the period commencing on the 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 the Representative,
(i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of
or agree to dispose of, 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 of the Securities Exchange Act of 1934, as amended (the
 “Exchange Act”), and the rules and regulations of the Commission promulgated thereunder, with respect
to any Units, shares of Capital Stock, Warrants, Rights or any securities convertible into, or exercisable, or exchangeable for,
shares of Capital Stock owned by it, him or her, (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any Units, shares of Capital Stock, Warrants, Rights or any
securities convertible into, or exercisable, or exchangeable for, shares of Capital Stock owned by it, him or her, whether any such
transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention to
effect any transaction specified in clause (i) or (ii). 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
upon the failure of the Company to consummate its initial Business Combination within the time period set forth in the Charter, the
Sponsor (which for purposes of clarification shall not extend to any other shareholders, members or managers of the Sponsor) (the
 “Indemnitor”) 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) 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 public
accountants) or products sold to the Company or (ii) any prospective target business with which the Company has entered into a
written letter of intent, confidentiality or other similar agreement or Business Combination agreement (a
 “Target”); provided, however, that such indemnification of the Company by the Indemnitor shall
(x) apply only to the extent necessary to ensure that such claims by a third party or a Target do not reduce the amount of
funds in the Trust Account to below the lesser of (i) $10.00 per Offering Share and (ii) the actual amount per Offering
Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.10 per Offering Share is
then held in the Trust Account due to reductions in the value of the trust assets, less interest earned on the Trust Account which
may be withdrawn to pay taxes, (y) not apply to any claims by a third party or a Target which executed a waiver of any and all
rights to the monies held in the Trust Account (whether or not such waiver is enforceable) and (z) not apply to any claims
under the Company’s indemnity of the Underwriters against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. The Indemnitor 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 Indemnitor, the Indemnitor
notifies the Company in writing that it shall undertake such defense.

 

    

     

    

 

5.        
     To the extent that the Underwriters do not exercise their over-allotment
option to purchase up to an additional 1,200,000 Units in full within 45 days from the date of the Prospectus (and as further
described in the Prospectus), the Sponsor agrees to forfeit, at no cost, a number of Founder Shares in the aggregate equal to
300,000 multiplied by a fraction, (i) the numerator of which is 1,200,000 minus the number of Units purchased by the
Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 1,200,000. The Sponsor will
be required to forfeit only that number of Founder Shares as is necessary so that the Initial Stockholders will own an aggregate of
20.0% of the Company’s issued and outstanding shares of Capital Stock after the Public Offering.

 

6.         
    (a) Each of the officers and directors of the Company hereby agrees not to
participate in the formation of, or become an officer or director of, any other special purpose acquisition company with a class of
securities registered under the Exchange Act until the Company has entered into a definitive agreement regarding an initial Business
Combination or until the Company has liquidated the Trust Account.

 

(b)            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 an Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 6(a), 7(a), 7(b), and
9, as applicable, 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 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 any Founder Shares (or shares of Common Stock issuable upon conversion thereof) until the earlier of
(A) 180 days after the completion of the Company’s initial Business Combination or (B) subsequent to the Business
Combination, (x) if the last sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits,
stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period
commencing at least 150 days after the Company’s initial Business Combination or (y) the date on which the Company
completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the
Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property (the
 “Founder Shares Lock-up Period”).

 

(b)            The
Sponsor and each Insider agrees that it, he or she shall not Transfer any Private Placement Warrants or shares of Common Stock issued
or issuable upon the exercise of the Private Placement Warrants, until after the completion of a Business Combination (the “Private
Placement 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 shares of Common
Stock issued or issuable upon the exercise or conversion of the Private Placement Warrants or the Founder Shares that are held by the
Sponsor, any Insider or any of their permitted transferees (that have complied with this paragraph 7(c)), are permitted (a) to the
Company’s officers or directors, any affiliate or family member of any of the Company’s officers or directors or any affiliate
of the Sponsor or to any member(s) of the Sponsor; (b) in the case of an individual, by gift to a member of such individual’s
immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate family, an affiliate of such
individual or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon
death of such individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) 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 shares or warrants were originally purchased; (f) in the event of the Company’s liquidation prior to the completion
of an initial Business Combination; (g) by virtue of the laws of the State of Delaware or the Sponsor’s limited liability company
agreement upon dissolution of the Sponsor, or (h) in the event of the Company’s liquidation, merger, capital stock exchange,
reorganization or other similar transaction which results in all of the Company’s stockholders having the right to exchange their
shares of common stock 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 (e) or (g), these permitted transferees must enter
into a written agreement with the Company agreeing to be bound by the transfer restrictions herein.

 

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 (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 the Insider’s background. Each Insider’s questionnaire furnished to
the Company is true and accurate in all respects. Each Insider represents and warrants that: it, he or she 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, he or she 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, he or she is not currently a defendant in any such criminal
proceeding.

 

9.       
      Except as disclosed in the Prospectus, neither the Sponsor nor any
officer, director, advisor or affiliate of the Sponsor, nor any officer, director or advisor 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).

 

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 an officer and/or director on the board of directors or an advisor of the Company and hereby consents to being named in the
Prospectus as an officer and/or director of the Company or an advisor of the Company.

 

    

     

    

 

11.           As
used herein, (i) “Business Combination” shall mean a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination, involving the Company and one or more businesses; (ii) “Capital
Stock” shall mean, collectively, the Common Stock and the Founder Shares; (iii) “Founder Shares”
shall mean (a) the 2,875,000 shares of the Company’s Class B common stock, par value $0.0001 per share, initially issued
to the Sponsor ((x) up to 300,000 Founder Shares of which are subject to complete or partial forfeiture by the Sponsor if the over-allotment
option is not exercised by the Underwriters and (y) 575,000 Founder Shares of which were forfeited by the Sponsor as of the date
hereof) for an aggregate purchase price of $25,000, or $0.009 per share, prior to the consummation of the Public Offering; (iv) “Initial
Stockholders” shall mean the Sponsor and any Insider that holds Founder Shares; (v) “Private Placement
Warrants” shall mean the 2,800,000 Warrants (or 3,040,000 Warrants if the over-allotment option is exercised in full) that
the Sponsor has agreed to purchase for an aggregate purchase price of $2,800,000 (or $3,040,000 if the over-allotment option is exercised
in full) in the aggregate, or $1.00 per Warrant, in a private placement that shall occur simultaneously with the consummation of the Public
Offering; (vi) “Public Stockholders” 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 of the Exchange Act, and the rules and regulations of the Commission promulgated thereunder
with respect to, any security, (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).

 

12.           The
Company will maintain an insurance policy or policies providing directors’ and officers’ liability insurance, and each director
of the Company shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage
available for any of the Company’s directors or officers.

 

13.           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 all parties hereto.

 

14.           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 parties. 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.

 

    

     

    

 

15.           Nothing
in this Letter Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto any right,
remedy or claim under or by reason of this Letter Agreement or of any covenant, condition, stipulation, promise or agreement hereof. All
covenants, conditions, stipulations, promises and agreements contained in this Letter Agreement shall be for the sole and exclusive benefit
of the parties hereto and their successors, heirs, personal representatives and assigns and permitted transferees; provided, however,
that the Representatives on behalf of the Underwriters are third party beneficiaries of this Letter Agreement.

 

16.           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.

 

17.           This
Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Letter Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

 

18.           This
Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. 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.

 

19.           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 transmission.

 

20.           This
Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (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 August 31, 2022; provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.

 

[Signature Page Follows]

 

    

     

    

 

Sincerely,

 

	 	 	By:	/s/ Bala Padmakumar
	 	 	 	Name:	Bala Padmakumar
	 	 	 	Title:	Chief Executive Officer
	 	 	 
	 	 	By:	/s/ Daniel Davis
	 	 	 	Name:	Daniel Davis
	 	 	 	Title:	Chief Financial Officer
	 	 	 
	 	 	By:	/s/ Vivek Soni
	 	 	 	Name:	Vivek Soni
	 	 	 	Title:	 Executive Vice President and Director
	 	 	 
	 	 	By:	 /s/ Leela Gray
	 	 	 	Name:	Leela Gray
	 	 	 	Title:	Director
	 	 	 
	 	 	By:	/s/ Kathy Cuocolo
	 	 	 	Name:	Kathy Cuocolo
	 	 	 	Title:	Director
	 	 	 
	 	 	By:	/s/ Stephen Markscheid
	 	 	 	Name:	Stephen Markscheid
	 	 	 	Title:	Director
	 	 	 
	 	Monterrey Acquisition Sponsor, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	 	By:	/s/ Bala Padmakumar
	 	 	 	Name:	Bala Padmakumar
	 	 	 	Title:	Chief Executive Officer

 

	Acknowledged and Agreed:	 
	 	 
	MONTEREY CAPITAL ACQUISITION CORPORATION	 
	 	 
	By:	 /s/ Bala Padmakumar	 
	Name: Bala Padmakumar	 
	Title: Chief Executive Officer	 

 

[Signature Page to Letter Agreement]Exhibit 10.2

 

INVESTMENT MANAGEMENT TRUST AGREEMENT

 

This Investment Management
Trust Agreement (this “Agreement”) is made effective as of May 10, 2022, by and between Monterey Capital
Acquisition Corporation, a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust
Company, a New York corporation (the “Trustee”).

 

WHEREAS, the Company’s
registration statement on Form S-1, File No. 333-264460 (the “Registration Statement”)
and prospectus (the “Prospectus”) for the initial public offering of the Company’s units (the “Units”),
each of which consists of one share of the Company’s Class A common stock, par value $0.0001 per share (the “Common
Stock”), one right to receive one-tenth (1/10) of one share of Common Stock and one redeemable warrant, each warrant entitling
the holder thereof to purchase one share of Common Stock (such initial public offering hereinafter referred to as the “Offering”),
has been declared effective as of the date hereof by the U.S. Securities and Exchange Commission; and

 

WHEREAS, the Company has entered
into an Underwriting Agreement (the “Underwriting Agreement”) with EF Hutton, division of
Benchmark Investments, LLC, as representative (the “Representative”) of the several underwriters (the “Underwriters”)
named therein; and

 

WHEREAS, if we are unable
to complete our initial business combination within 12 months, or if we decide to extend the period of time to consummate our business
combination up to two times by an additional three months each time, at $0.10 per extension, for a total of $0.20 aggregate in trust,
within 18 months (the “Extension Option”), from the closing of this offering, we will redeem 100% of the public
shares 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 us to pay our taxes (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions as further described
herein. In the event we decide to exercise the Extension Option, investors will not have voting rights nor redemption rights in connection
with such additional three-month extensions.

 

WHEREAS, as described in the
Prospectus, $80,800,000 of the gross proceeds of the Offering and sale of the Private Placement Warrants (as defined in the Underwriting
Agreement) (or $92,920,000, if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to
be deposited and held in a segregated trust account located at all times in the United States (the “Trust Account”)
for the benefit of the Company and the holders of the Common Stock included in the Units issued in the Offering as hereinafter provided
(the amount to be delivered to the Trustee (and any interest subsequently earned thereon) is referred to herein as the “Property,”
the stockholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Stockholders,”
and the Public Stockholders and the Company will be referred to together as the “Beneficiaries”); and

 

WHEREAS, pursuant to the Underwriting
Agreement, a portion of the Property equal to $3,200,000 (or $3,680,000 if the Underwriters’ over-allotment option is exercised
in full) is attributable to deferred underwriting discounts and commissions that will be payable by the Company to the Underwriters upon
and concurrently with the consummation of the Business Combination (as defined below) (the “Deferred Discount”);
and

 

    

     

    

 

WHEREAS, the Company and the
Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.

 

NOW THEREFORE, IT IS AGREED:

 

1.     
         Agreements and Covenants of Trustee. The
Trustee hereby agrees and covenants to:

 

(a)           Hold
the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established by the Trustee
in the United States at JPMorgan Chase Bank N.A. (or at another U.S. chartered commercial bank with consolidated assets of $100 billion
or more) and at a brokerage institution selected by the Trustee that is reasonably satisfactory to the Company;

 

(b)           Manage,
supervise and administer the Trust Account subject to the terms and conditions set forth herein;

 

(c)            In
a timely manner, upon the written instruction of the Company, invest and reinvest the Property solely in United States government securities
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or less,
or in money market funds meeting the conditions of Rule 2a-7(d) promulgated under the Investment Company Act of 1940, as amended
(or any successor rule), which invest only in direct U.S. government treasury obligations, as determined by the Company; it being understood
that the Trust Account will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder; and
while account funds are invested or uninvested the Trustee may earn bank credits or other consideration;

 

(d)           Collect
and receive, when due, all interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;

 

(e)            Promptly
notify the Company and the Representative of all communications received by the Trustee with respect to any Property requiring action
by the Company;

 

(f)            Supply
any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with the Company’s
preparation of the tax returns relating to assets held in the Trust Account, or in connection with the preparation of the Company’s
financial statements by the Company’s auditors;

 

(g)           Participate
in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed by the
Company to do so;

 

(h)           Render
to the Company monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts and disbursements
of the Trust Account;

 

    2

     

    

 

(i)            Commence
liquidation of the Trust Account only after and within two business days of (x) receipt of, and only in accordance with, the terms
of a letter from the Company (“Termination Letter”) in a form substantially similar to that
attached hereto as either Exhibit A or Exhibit B, as applicable, signed on behalf of the Company
by its Chief Executive Officer, Chief Financial Officer, President, Executive Vice President, Vice President, Secretary or Chairman of
the board of directors of the Company (the “Board”) or other authorized officer of the Company, and, in the
case of a Termination Letter in a form substantially similar to the attached hereto as Exhibit A, acknowledged and agreed
to by the Representative, and complete the liquidation of the Trust Account and distribute the Property in the Trust Account, including
interest not previously released to the Company to pay its taxes (less up to $100,000 of interest that may be released to the Company
to pay dissolution expenses), only as directed in the Termination Letter and the other documents referred to therein, or (y) the
date which is the later of (1) 18 months after the closing of the Offering and (2) such later date as may be approved by the
Company’s stockholders in accordance with the Company’s amended and restated certificate of incorporation (“Charter”)
if a Termination Letter has not been received by the Trustee prior to such date, in which case the Trust Account shall be liquidated in
accordance with the procedures set forth in the Termination Letter attached as Exhibit B and the Property in the
Trust Account, including interest not previously released to the Company to pay its taxes (less up to $100,000 of interest that may be
released to the Company to pay dissolution expenses) shall be distributed to the Public Stockholders of record as of such date;

 

(j)            Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit C,
withdraw from the Trust Account and distribute to the Company the amount of interest earned on the Property requested by the Company to
cover any tax obligation owed by the Company as a result of assets of the Company or interest or other income earned on the Property,
which amount shall be delivered directly to the Company by electronic funds transfer or other method of prompt payment, and the Company
shall forward such payment to the relevant taxing authority; provided, however, that to the extent there is not
sufficient cash in the Trust Account to pay such tax obligation, the Trustee shall liquidate such assets held in the Trust Account as
shall be designated by the Company in writing to make such distribution, so long as there is no reduction in the principal amount per
share initially deposited in the Trust Account; provided, further, that if the tax to be paid is a franchise tax,
the written request by the Company to make such distribution shall be accompanied by a copy of the franchise tax bill from the State of
Delaware for the Company (it being acknowledged and agreed that any such amount in excess of interest income earned on the Property shall
not be payable from the Trust Account). The written request of the Company referenced above shall constitute presumptive evidence that
the Company is entitled to said funds, and the Trustee shall have no responsibility to look beyond said request;

 

(k)           Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit D,
the Trustee shall distribute to the Public Stockholders on behalf of the Company the amount requested by the Company to be used to redeem
shares of Common Stock from Public Stockholders properly submitted in connection with a stockholder vote to approve an amendment to the
Charter (x) to modify the substance or timing of the Company’s obligation to allow redemption in connection with an initial
Business Combination or amendments to the Charter prior thereto or the Company’s obligation to redeem 100% of its public shares
of Common Stock if the Company has not consummated an initial Business Combination within such time as is described in the Charter or
(y) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity. The
written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to distribute said
funds, and the Trustee shall have no responsibility to look beyond said request; and

 

    3

     

    

 

(l)            Only
release the Property in accordance with a written instruction, signed by an Authorized Representative (as such term is defined below)
of the Company substantially in the form attached as Exhibit A, B, C or D, as applicable, attached hereto; and

 

(m)          Not
make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), (j) or
(k) above.

 

2.         
    Agreements and Covenants of the Company. The Company hereby agrees and
covenants to:

 

(a)           Give
all instructions to the Trustee hereunder in writing, signed by at least two of the Company’s Chairman of the Board, Chief Executive
Officer, Chief Financial Officer, President, Executive Vice President, Vice President or Secretary (the “Authorized Representative”).
In addition, except with respect to its duties under Sections 1(i), 1(j) and 1(k) hereof,
the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or instruction which it,
in good faith and with reasonable care, believes to be given by any one of the persons authorized above to give written instructions,
provided that the Company shall promptly confirm such instructions in writing;

 

(b)           Subject
to Section 4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all expenses,
including reasonable counsel fees and disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder
and in connection with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any
claim or demand, which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or
any interest earned on the Property, except for expenses and losses resulting from the Trustee’s gross negligence, fraud or willful
misconduct. Promptly after the receipt by the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding,
pursuant to which the Trustee intends to seek indemnification under this Section 2(b), it shall notify the Company in
writing of such claim (hereinafter referred to as the “Indemnified Claim”), provided, that
no failure or delay by the Trustee to so notify the Company shall relieve the Company from its obligations under this Agreement, except
as and to the extent it is found, in a final, unappealable judgment by a court of competent jurisdiction, that such failure or delay actually
and materially prejudiced the Company. The Trustee shall have the right to conduct and manage the defense against such Indemnified Claim; provided that
the Trustee shall obtain the consent of the Company with respect to the selection of counsel, which consent shall not be unreasonably
withheld or delayed. The Trustee may not agree to settle any Indemnified Claim without the prior written consent of the Company, which
such consent shall not be unreasonably withheld or delayed. The Company may participate in such action with its own counsel, and at its
sole cost and expense;

 

    4

     

    

 

(c)            Pay
the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee,
and transaction processing fee which fees shall be subject to modification by the parties from time to time. It is expressly understood
that the Property shall not be used to pay such fees unless and until the closing of the Business Combination (defined below). The Company
shall pay the Trustee the initial acceptance fee and the first annual administration fee at the consummation of the Offering. The Company
shall not be responsible for any other fees or charges of the Trustee except as set forth in this Section 2(c), Schedule
A and as may be provided in Section 2(b) hereof;

 

(d)           In
connection with any vote of the Company’s stockholders regarding a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination involving the Company and one or more businesses (the “Business Combination”),
provide to the Trustee an affidavit or certificate of the inspector of elections for the stockholder meeting verifying the vote of such
stockholders regarding such Business Combination;

 

(e)            Provide
the Representative with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee with respect
to any proposed withdrawal from the Trust Account promptly after it issues the same;

 

(f)            Unless
otherwise agreed between the Company and the Representative, ensure that any Instruction Letter (as defined in Exhibit A)
delivered in connection with a Termination Letter in the form of Exhibit A expressly provides that the Deferred Discount is
paid directly to the account or accounts directed by the Representative on behalf of the Underwriters prior to any transfer of the funds
held in the Trust Account to the Company or any other person;

 

(g)            Instruct
the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing the Trustee to make
any distributions that are not permitted under this Agreement; and

 

(h)            Within
four (4) business days after the Underwriters exercise the over-allotment option (or any unexercised portion thereof) or such over-allotment
expires, provide the Trustee with a notice in writing of the total amount of the Deferred Discount, which shall in no event be less than
$3,200,000.

 

3.   
          Limitations of Liability. The Trustee
shall have no responsibility or liability to:

 

(a)            Imply
obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than this Agreement
and that which is expressly set forth herein;

 

(b)            Take
any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have
no liability to any third party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;

 

(c)            Institute
any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of any kind
with respect to, any of the Property unless and until it shall have received instructions from the Company given as provided herein to
do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto;

 

    5

     

    

 

(d)           Refund
any depreciation in principal of any Property;

 

(e)            Assume
that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise
in such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee;

 

(f)            The
other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in
good faith and in the Trustee’s best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct. The
Trustee may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Trustee, which counsel may be the Company’s counsel), statement, instrument, report or other paper
or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability
of any information therein contained) which the Trustee believes, in good faith and with reasonable care, to be genuine and to be signed
or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification, termination
or rescission of this Agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee, signed
by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall give its prior written consent
thereto;

 

(g)           Verify
the accuracy of the information contained in the Registration Statement;

 

(h)            Provide
any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as contemplated by
the Registration Statement;

 

(i)            File
information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic written statements
to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;

 

(j)            Prepare,
execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and activities relating
to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but not limited to, franchise
and income tax obligations, except pursuant to Section 1(j) hereof; or

 

(k)            Verify
calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections 1(i), 1(j) or 1(k) hereof.

 

4.       
      Trust Account Waiver. The Trustee has no right of set-off or
any right, title, interest or claim of any kind (“Claim”) to, or to any monies in, the Trust Account, and
hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it may have now or in the future. In the event
the Trustee has any Claim against the Company under this Agreement, including, without limitation,
under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely
against the Company and its assets outside the Trust Account and not against the Property or any monies in the Trust
Account.

 

    6

     

    

 

5.      
       Termination. This Agreement shall terminate as
follows:

 

(a)            If
the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable efforts
to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such time that the
Company notifies the Trustee that a successor trustee has been appointed and has agreed to become subject to the terms of this Agreement,
the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited to the transfer of
copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate; provided, however,
that in the event that the Company does not locate a successor trustee within ninety (90) days of receipt of the resignation notice from
the Trustee, the Trustee may submit an application to have the Property deposited with any court in the State of New York or with the
United States District Court for the Southern District of New York and upon such deposit, the Trustee shall be immune from any liability
whatsoever; or

 

(b)           At
such time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions of Section 1(i) hereof
(which section may not be amended under any circumstances) and distributed the Property in accordance with the provisions of the Termination
Letter, this Agreement shall terminate except with respect to Section 2(b).

 

6.       
      Miscellaneous.

 

(a)            The
Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds transferred
from the Trust Account. The Company and the Trustee will each restrict access to confidential information relating to such security procedures
to authorized persons. Each party must notify the other party immediately if it has reason to believe unauthorized persons may have obtained
access to such confidential information, or of any change in its authorized personnel. In executing funds transfers, the Trustee shall
rely upon all information supplied to it by the Company, including, account names, account numbers, and all other identifying information
relating to a Beneficiary, Beneficiary’s bank or intermediary bank. Except for any liability arising out of the Trustee’s
gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense resulting from any error
in the information or transmission of the funds.

 

(b)            This
Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect
to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. This Agreement may
be executed in several original or facsimile counterparts, each one of which shall constitute an original, and together shall constitute
but one instrument.

 

(c)            This
Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. This Agreement
or any provision hereof may only be changed, amended or modified (other than to correct a typographical error) by a writing signed by
each of the parties hereto; provided, however, that no such change, amendment or modification to Section 1(i), 2(f) or Exhibit A
may be made without the prior written consent of the Representative.

 

    7

     

    

 

(d)           This
Agreement or any provision hereof may only be changed, amended or modified pursuant to Section 6(c) hereof with
the Consent of the Stockholders. For purposes of this Section 6(d), the “Consent of the Stockholders”
means receipt by the Trustee of a certificate from the inspector of elections of the stockholder meeting certifying that the Company’s
stockholders of record as of a record date established in accordance with Section 213(a) of the Delaware General Corporation
Law, as amended (“DGCL”) (or any successor rule), who hold sixty-five percent (65%) or more of all then outstanding
shares of the Common Stock and Class B common stock, par value $0.0001 per share, of the Company voting together as a single class,
have voted in favor of such change, amendment or modification. No such amendment will affect any Public Stockholder who has otherwise
indicated his or her election to redeem his or her shares of Common Stock in connection with a stockholder vote sought to amend this Agreement
(i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with an initial Business
Combination or to redeem 100% of the Common Stock if the Company does not complete its initial Business Combination within the time frame
specified in the Charter or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial Business
Combination activity. Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee
may rely conclusively on the certification from the inspector or elections referenced above and shall be relieved of all liability to
any party for executing the proposed amendment in reliance thereon.

 

(e)            The
parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, State of New York,
for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT,
EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.

 

(f)            Any
notice, consent or request to be given in connection with any of the terms or provisions of this 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 by electronic
mail:

 

if to the Trustee, to:

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

Attn: Francis Wolf and Celeste Gonzalez

Email: fwolf@continentalstock.com;
cgonzalez@continentalstock.com

 

if to the Company, to:

 

Monterey Capital Acquisition Corporation

Bala Padmakumar

 

    8

     

    

 

Chief Executive Officer

419 Webster Street

Monterey, CA 93940

 

in each case, with copies to:

 

Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo,
P.C.

One Financial Center

Boston, MA 02111

Attn: Thomas R. Burton, Esq.

Telephone: (617) 542-6000

 

and

 

EF Hutton, division of Benchmark Investments,
LLC

590 Madison Avenue, 39th Floor

New York, NY 10022

Attn: Joseph T. Rallo, Chief Executive Officer

Email: jrallo@efhuttongroup.com

 

and

 

Seward & Kissel LLP

One Battery Park Plaza

New York, NY 10004

Attn: Keith J. Billotti, Esq.

Telephone: (212) 574-1200

 

(g)           Each
of the Company and the Trustee hereby represents that it has the full right and power and has been duly authorized to enter into this
Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make
any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds in the Trust Account
under any circumstance.

 

(h)           This
Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation, negotiation
and agreement of such parties and shall not be construed for or against any party hereto.

 

(i)            This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic transmission
shall constitute valid and sufficient delivery thereof.

 

(j)            Each
of the Company and the Trustee hereby acknowledges and agrees that the Representative, on behalf of the Underwriters, is a third party
beneficiary of this Agreement.

 

(k)           Except
as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other person or entity.

 

[Signature Page Follows]

 

    9

     

    

 

IN WITNESS WHEREOF,
the parties have duly executed this Investment Management Trust Agreement as of the date first written above.

 

	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee
	 	 
	 	By:	/s/ Francis Wolf
	 	 	Name:	Francis Wolf
	 	 	Title:	Vice President
	 	 
	 	MONTEREY CAPITAL ACQUISITION CORPORATION
	 	 
	 	By:	/s/ Bala Padmakumar
	 	 	Name:	Bala Padmakumar
	 	 	Title: 	Chief Executive Officer

 

[Signature Page to Investment Management
Trust Agreement]

 

    

     

    

 

SCHEDULE A

 

	Fee Item	 	Time and method of payment	 	Amount	 
	Initial set-up fee.	 	Initial closing of Offering by wire transfer.	 	$	3,500.00	 
	Trustee administration fee	 	Payable annually. First year fee payable, at initial closing of Offering by wire transfer, thereafter by wire transfer or check.	 	$	10,000.00	 
	Transaction processing fee for disbursements to Company under Sections 1(i) and (j)	 	Billed to Company following disbursement made to Company under Section 1	 	$	250.00	 
	Paying Agent services as required pursuant to Sections 1(i) and 1(k)	 	Billed to Company upon delivery of service pursuant to Section 1(i) and 1(k)	 	 	Prevailing rates	 

 

    Schedule A-1

     

    

 

EXHIBIT A

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attn: Francis Wolf and Celeste Gonzalez

 

		Re:	Trust
Account  -  Termination Letter

 

Dear Mr. Wolf and Ms. Gonzalez:

 

Pursuant to Section 1(i) of
the Investment Management Trust Agreement between Monterey Capital Acquisition Corporation, a Delaware corporation (the “Company”),
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of May 10, 2022 (the
 “Trust Agreement”), this is to advise you that the Company has entered into an agreement
with (the “Target Business”) to consummate a business combination with Target Business (the “Business Combination”)
on or about [ ]. The Company shall notify you at least seventy-two (72) hours in advance of the actual date of the consummation of the
Business Combination (the “Consummation Date”). Capitalized terms used but not defined herein
shall have the meanings set forth in the Trust Agreement.

 

In accordance with the terms
of the Trust Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account and transfer the proceeds
to a segregated account held by you on behalf of the Beneficiaries to the effect that, on the Consummation Date, all of the funds held
in the Trust Operating Account at JPMorgan Chase Bank N.A. will be immediately available for transfer to the account or accounts that
the Company shall direct on the Consummation Date (including as directed to it by the Representative on behalf of the Underwriters (with
respect to the Deferred Discount)). It is acknowledged and agreed that while the funds are on deposit in the trust operating account at
JPMorgan Chase Bank, N.A. awaiting distribution, the Company will not earn any interest or dividends.

 

On the Consummation Date,
(i) counsel for the Company shall deliver to you written notification that the Business Combination has been consummated, or will
be consummated concurrently with your transfer of funds to the accounts as directed by the Company (the “Notification”)
and (ii) the Company shall deliver to you (a) a certificate by the Chief Executive Officer, which verifies that the Business
Combination has been approved by a vote of the Company’s stockholders, if a vote is held and (b) a joint written instruction
signed by the Company and the Representative with respect to the transfer of the funds held in the Trust Account, including payment of
amounts owed to public stockholders who have properly exercised their redemption rights and payment of the Deferred Discount to the Representative
from the Trust Account (the “Instruction Letter”). You are hereby directed and authorized to transfer the
funds held in the Trust Account immediately upon your receipt of the Notification and the Instruction Letter, in accordance with the terms
of the Instruction Letter. In the event that certain deposits held in the Trust Account may not be liquidated by the Consummation Date
without penalty, you will notify the Company in writing of the same and the Company shall direct you as to whether such funds should remain
in the Trust Account and be distributed after the Consummation Date to the Company. Upon the distribution of all the funds, net of any
payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement
shall be terminated.

 

     Exhibit A-1

     

    

 

In the event that the Business
Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the
original Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the
funds held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day immediately
following the Consummation Date as set forth in such notice as soon thereafter as possible.

 

	 	 	Very truly yours,
	 	 	 
	 	 	MONTEREY CAPITAL ACQUISITION CORPORATION
	 	 	 
	 	 	By:	 
	 	 	 	Name: Bala Padmakumar
	 	 	 	Title: Chief Executive Officer

 

	Acknowledged & Agreed by:	 	 
	EF HUTTON, DIVISION OF BENCHMARK INVESTMENTS, LLC	 	 
	 	 	 
	By:	                  	 	 
	 	Name:	 	 
	 	Title:	 	 

 

     Exhibit A-2

     

    

 

EXHIBIT B

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attn: Francis Wolf and Celeste Gonzalez

 

		Re:	Trust
                                            Account  -  Termination Letter

 

Dear Mr. Wolf and Ms. Gonzalez:

 

Pursuant to Section 1(i) of
the Investment Management Trust Agreement between Monterey Capital Acquisition Corporation, a Delaware corporation (the “Company”),
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of May 10, 2022 (the
 “Trust Agreement”), this is to advise you that the Company has been unable to effect a business
combination with a Target Business (the “Business Combination”) within the time frame specified
in the Company’s amended and restated certificate of incorporation. Capitalized terms used but not defined herein shall have the
meanings set forth in the Trust Agreement.

 

In accordance with the terms
of the Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account and to transfer the total proceeds
into a segregated account held by you on behalf of the Beneficiaries to await distribution to the Public Stockholders. The Company has
selected [_____] (1) as the effective date for the purpose of determining when the Public Stockholders will be entitled
to receive their share of the liquidation proceeds. You agree to be the Paying Agent of record and, in your separate capacity as Paying
Agent, agree to distribute said funds directly to the Company’s Public Stockholders in accordance with the terms of the Trust Agreement
and the Amended and Restated Certificate of Incorporation of the Company. Upon the distribution of all the funds, net of any payments
necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall
be terminated, except to the extent otherwise provided in Section 1(j) of the Trust Agreement.

 

(1)            18
months from the closing of the Offering, or at a later date, if extended.

 

	 	Very truly yours,
	 	 
	 	MONTEREY CAPITAL ACQUISITION CORPORATION
	 	 
	 	By:	 
	 	 	Name: Bala Padmakumar
	 	 	Title: Chief Executive Officer

 

		cc:	EF
Hutton, division of Benchmark Investments, LLC

 

     Exhibit B-1

     

    

 

EXHIBIT C

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attn: Francis Wolf and Celeste Gonzalez

 

		Re:	Trust Account  -
  Withdrawal Instruction

 

Dear Mr. Wolf and Ms. Gonzalez:

 

Pursuant to Section 1(j) of
the Investment Management Trust Agreement between Monterey Capital Acquisition Corporation, a Delaware corporation (the “Company”),
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of May 10, 2022 (the
 “Trust Agreement”), the Company hereby requests that you deliver to the Company $[ ] of the
interest income earned on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the meanings set
forth in the Trust Agreement.

 

The Company needs such funds
to pay for the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s
operating account at:

 

[WIRE INSTRUCTION INFORMATION]

 

	 	Very truly yours,
	 	 
	 	MONTEREY CAPITAL ACQUISITION CORPORATION
	 	 
	 	By:	 
	 	 	Name: Bala Padmakumar
	 	 	Title: Chief Executive Officer

 

		cc:	EF
Hutton, division of Benchmark Investments, LLC

 

     Exhibit C-1

     

    

 

EXHIBIT D

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attn: Francis Wolf and Celeste Gonzalez

 

		Re:	Trust Account  -
  Stockholder Redemption Withdrawal Instruction

 

Dear Mr. Wolf and Ms. Gonzalez:

 

Pursuant to Section 1(k) of
the Investment Management Trust Agreement between Monterey Capital Acquisition Corporation, a Delaware corporation (the “Company”),
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of May 10, 2022 (the
 “Trust Agreement”), the Company hereby requests that you deliver to the redeeming Public
Stockholders of the Company $[_____] of the principal and interest income earned on the Property as of the date hereof to a segregated
account held by you on behalf of the Beneficiaries for distribution to the Stockholders who have requested redemption of their Common
Stock. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.

 

The Company needs such funds
to pay its Public Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in connection with
a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation (A) to modify
the substance or timing of the Company’s obligation to allow redemption in connection with an initial Business Combination or to
redeem 100% of public shares of Common Stock if the Company has not consummated an initial Business Combination within such time as is
described in the Company’s amended and restated certificate of incorporation or (B) with respect to any other provision relating
to stockholders’ rights or pre-initial Business Combination activity. As such, you are hereby directed and authorized to transfer
(via wire transfer) such funds promptly upon your receipt of this letter.

 

	 	Very truly yours,
	 	 
	 	MONTEREY CAPITAL ACQUISITION CORPORATION
	 	 
	 	By:	 
	 	 	Name: Bala Padmakumar
	 	 	Title: Chief Executive Officer

 

		cc:	EF Hutton, division of Benchmark
Investments, LLC

 

     Exhibit D-1

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