Document:

Exhibit 10.3

 

 

INVESTMENT MANAGEMENT TRUST AGREEMENT

 

This Agreement is made as
of [●], 2021 by and between Monterey Bio Acquisition Corporation (the “Company”) and Continental Stock Transfer &
Trust Company (“Trustee”).

 

WHEREAS, the Company’s
registration statement on Form S-1, No. 333-[__] (“Registration Statement”) for its initial public offering of securities
(“IPO”) has been declared effective as of the date hereof (“Effective Date”) by the Securities and Exchange Commission
(capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Registration Statement); and

 

WHEREAS, Chardan Capital Markets
LLC (“Chardan”) is acting as the underwriter in the IPO; and

 

WHEREAS, as described in the
Registration Statement, and in accordance with the Company’s Amended and Restated Certificate of Incorporation, $101,000,000 ($116,150,000
if the over-allotment option is exercised in full) will be delivered to the Trustee to be deposited and held in a trust account for the
benefit of the Company and the holders of the Company’s common stock, par value $.0001 per share (“Common Stock”), issued
in the IPO as hereinafter provided (the proceeds to be delivered to the Trustee will be 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, if a Business Combination is not consummated within 12 months
from the date of the closing of the IPO, the Company may, by resolution of its board of directors if requested by its insiders or their
affiliates, extend the period of time to consummate a Business Combination up to three times by an additional three months each time (for
a total of up to 21 months to complete a Business Combination); provided that, pursuant to the Company’s Amended and Restated Certificate
of Incorporation, the only way to extend the time available for the Company to consummate its initial Business Combination is for the
Company’s insiders or their affiliates or designees, upon five days’ advance notice prior to each applicable deadline, to
deposit into the Trust Account $1,000,000, or $1,150,000 if the over-allotment option is exercised in full ($0.10 per unit in either case,
or an aggregate of $3,000,000, or $3,450,000 if the over-allotment option is exercised in full, if the time to consummate a Business Combination
is extended to a full 21 months), on or prior to the date of the applicable deadline; 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.

 

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 a segregated trust account (“Trust Account”) established
by the Trustee at JPMorgan Chase Bank, N.A. in the United States, maintained by Trustee, (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 instruction of the Company, invest and reinvest the Property (i) in United States government treasury bills, notes or bonds having
a maturity of 185 days or less and/or (ii) in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act of 1940, as amended, and that invest solely in U.S. treasuries, as determined by the Company, it being understood that the
Trust Account will earn no interest while the account funds are uninvested awaiting the Company’s instructions hereunder; while the account funds are invested or uninvested, the
Trustee may earn bank credits and other consideration;

  

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

 

(e) Promptly notify the Company
and Chardan of all communications received by it 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 or completion of the audit 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;

 

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(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;
and

 

(i) Commence liquidation of the Trust Account only after and promptly
after (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
President, Chief Executive Officer, Chief Financial Officer, Chairman of the Board, Secretary or other authorized officer of the Company
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, if any (less up to $100,000 of interest to pay dissolution expenses), only as directed in the
Termination Letter and the other documents referred to therein, or (y) upon the date which is (1) 12 months (or up to 21 months, as applicable)
after the closing of the IPO 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 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, if any (less up to
$100,000 of interest to pay dissolution expenses) shall be distributed to the Public Stockholders of record as of such date; and

 

(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 D
(“Stockholder Redemption Withdrawal Instruction”), the Trustee shall distribute to the
remitting brokers on behalf of Public Stockholders redeeming shares of Common Stock the amount required to pay for redeemed shares of
Common Stock from Public Stockholders in connection with a stockholder vote to approve an amendment to the Company’s Amended and
Restated Certificate of Incorporation to affect the substance or timing of the Company’s obligation to redeem all shares of Common
Stock included in the Units sold in the IPO if the Company does not complete a Business Combination within the time period set forth
in the Company’s Amended and Restated Certificate of Incorporation. 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.

 

2. Limited
Distributions of Income from Trust Account.

 

(a) 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 (a “Tax Payment
Withdrawal Instruction”), the Trustee shall distribute to the Company the amount of interest income earned on the Trust Account
requested by the Company to cover any income or other tax obligation owed by the Company.

 

(b) The limited distributions
referred to in Section 2(a) above shall be made only from income collected on the Property. Except as provided in Section 2(a) above,
no other distributions from the Trust Account shall be permitted except in accordance with Sections 1(i) and (j) hereof.

 

(c) The Company shall provide
Chardan with a copy of any Termination Letters and/or any other correspondence that it issues to the Trustee with respect to any proposed
withdrawal from the Trust Account promptly after such issuance.

 

3. 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 the Company’s President, Chief Executive Officer, Chief Financial Officer, Chairman
of the Board, Secretary or other authorized officer of Company. In addition, except with respect to its duties under paragraphs 1(i),
1(j) and 2(a) above, 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 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;

 

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(b) Subject to the
provisions of Sections 5 and 7(g) of this Agreement, hold the Trustee harmless and indemnify the Trustee from and against, any and
all expenses, including reasonable counsel fees and disbursements, or loss suffered by the Trustee in connection with any claim,
potential claim, 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
income earned from investment of the Property, except for expenses and losses resulting from the Trustee’s gross negligence 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 paragraph, it shall notify the Company in
writing of such claim (hereinafter referred to as the “Indemnified Claim”). 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. The Trustee may not agree to settle any
Indemnified Claim without the prior written consent of the Company, which consent shall not be unreasonably withheld. The Company
may participate in such action with its own counsel;

 

(c) Pay the Trustee an initial
acceptance fee, an annual fee and a transaction processing fee for each disbursement made pursuant to Section 2(a) as set forth on Schedule
A hereto, 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 except for disbursements made to the Company pursuant to Sections 1(i) and (j) solely in connection with
the consummation of a Business Combination. The Company shall pay the Trustee the initial acceptance fee and first year’s fee at
the consummation of the IPO and thereafter on the anniversary of the Effective Date. Except as set forth in this Section 3(c) and Section
3(b) hereof, the Company shall not be responsible for any other fees or charges of the Trustee;

 

(d) In connection with any vote
of the Company’s stockholders regarding a Business Combination, provide to the Trustee an affidavit or certificate of a firm regularly
engaged in the business of soliciting proxies and/or tabulating shareholder votes verifying the vote of the Company’s stockholders
regarding such Business Combination; and

 

(e) In the event that the Company
directs the Trustee to commence liquidation of the Trust Account pursuant to Section 1(i), the Company agrees that it will not direct
the Trustee to make any payments that are not specifically authorized by this Agreement.

 

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

 

(a) Take any action with respect
to the Property, other than as directed in paragraphs 1 and 2 hereof and the Trustee shall have no liability to any party except for liability
arising out of its own gross negligence or willful misconduct;

 

(b) 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;

 

(c) Change the investment of
any Property, other than in compliance with paragraph 1(c);

 

(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
exercise of its own best judgment, except for its gross negligence 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),
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 is believed by the Trustee, in good
faith, 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;

 

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(g) Verify the correctness of
the information set forth in the Registration Statement or to confirm or assure that any acquisition made by the Company or any other
action taken by it is as contemplated by the Registration Statement;

 

(h) File local, state and/or
federal tax returns or information returns with any taxing authority on behalf of the Trust Account and payee statements with the Company
documenting the taxes, if any, payable by the Company or the Trust Account, relating to the income earned on the Property;

 

(i) Pay any taxes on behalf
of the Trust Account (it being expressly understood that the Property shall not be used to pay any such taxes and that such taxes, if
any, shall be paid by the Company from funds not held in the Trust Account or released to it under Section 2(a) hereof);

 

(j) 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; and

 

(k) Verify calculations, qualify
or otherwise approve Company requests for distributions pursuant to Sections 1(i), 1(j) or 2(a) above.

 

5. 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 3(b) or Section 3(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. 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 during which time the Trustee shall act in accordance with this Agreement. At such time that the Company notifies the Trustee
that a successor trustee has been appointed by the Company 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 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 in accordance with the provisions of paragraph 1(i) hereof, and distributed the Property
in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Paragraph 3(b).

 

7. 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 information, or of any change in its authorized personnel. In executing funds transfers, the Trustee will 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. The Trustee shall not be liable for any loss, liability or expense resulting from any
error in the information or transmission of the wire.

 

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(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. It 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. Except for Sections 1(i) and 1(j) (which may only be amended with the
approval of the holders of a majority of all of the outstanding shares of Common Stock), this Agreement or any provision hereof may only
be changed, amended or modified by a writing signed by each of the parties hereto; provided, however, that no such change, amendment or
modification may be made without the prior written consent of Chardan. As to any claim, cross-claim or counterclaim in any way relating
to this Agreement, each party waives the right to trial by jury. The Trustee may require from Company counsel an opinion as to the propriety
of any proposed amendment.

 

(d) The parties hereto consent
to the jurisdiction and venue of any state or federal court located in the [City of New York, Borough of Manhattan], for purposes of resolving
any disputes hereunder.

 

(e) 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, facsimile transmission or by electronic
mail:

 

if to the Trustee, to:

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attn: Francis Wolf and Celeste Gonzalez

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

 

if to the Company, to:

 

Monterey Bio Acquisition Corporation

17 State Street

21st Floor

New York, NY 10004

Attn: Sanjeev Satyal, Chief Executive Officer

Email: sanjeev@montereybio.com

 

in either case with a copy (which copy shall not constitute
notice) to:

 

Chardan Capital Markets LLC

17 State Street, 21st Floor

New York, NY 10004

Attn: Shai Gerson

Email: sgerson@chardan.com

 

and

 

Greenberg
Traurig, LLP

1750 Tysons
Boulevard, Suite 1000

McLean,
VA 22102

Attn: Jason
T. Simon, Esq.

Email: simonj@gtlaw.com

 

and

 

Reed Smith LLP

599 Lexington Avenue

New York, NY 10022

Attn: Ari Edelman, Edward P. Bromley III

Email: aedelman@reedsmith.com;
ebromley@reedsmith.com

 

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(f) Except as specified herein, no party to this Agreement may assign
its rights or delegate its obligations hereunder to any other person or entity without the consent of the other party.

 

(g) Each of the Trustee and
the Company 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.

 

(h) Each of the Company and
the Trustee hereby acknowledge that Chardan is a third party beneficiary of this Agreement.

 

[Signature Page Follows]

 

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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:	 
	 	Name: Francis Wolf
	 	Title: Vice President
	 
	 	MONTEREY BIO ACQUISITION CORPORATION
	 
	 	By:	 
	 	Name: Sanjeev Satyal
	 	Title: Chief Executive Officer

 

[Signature Page to Investment Management Trust
Agreement]

 

    

     

    

 

SCHEDULE A

 

	Fee Item	Time and method of payment	Amount
	Initial acceptance fee	Initial closing of IPO by wire transfer	$3,500.00
	Annual fee	First year, initial closing of IPO by wire transfer; thereafter on the anniversary of the effective date of the IPO by wire transfer or check	$10,000.00
	Transaction processing fee for disbursements to Company under Section 2	Deduction by Trustee from accumulated income following disbursement made to Company under Section 2	$250.00
	Paying Agent services as required pursuant to sections 1(i) and 1(j)	Billed to Company upon delivery of service pursuant to sections 1(i) and (j)	Market Rate

 

    

     

    

 

EXHIBIT A

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, N.Y. 10004

Attn: Francis Wolf and Celeste Gonzalez

 

Re:        Trust
Account - Termination Letter

 

Gentlemen:

 

Pursuant to paragraph 1(i)
of the Investment Management Trust Agreement between Monterey Bio Acquisition Corporation (“Company”) and Continental Stock
Transfer & Trust Company (“Trustee”), dated as of [______________], 2021 (“Trust Agreement”), this is to advise
you that the Company has entered into an agreement with [__________________] (“Target Business”) to consummate a business
combination with Target Business (“Business Combination”) on or about [insert date]. The Company shall notify
you at least 72 hours in advance of the actual date of the consummation of the Business Combination (“Consummation Date”).
Capitalized terms used herein and not otherwise defined 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 the Trust Account investments and to transfer the proceeds to the above-referenced account at JPMorgan Chase Bank, N.A.
to the effect that, on the Consummation Date, all of funds held in the Trust Account will be immediately available for transfer to the
account or accounts that the Company shall direct on the Consummation Date. 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 and (ii) the Company
shall deliver to you (a) a certificate of the Chief Executive Officer, which verifies the vote of the Company’s stockholders
in connection with the Business Combination if a vote is held and (b) joint written instructions from the Company and Chardan Capital
Markets LLC with respect to the transfer of the funds held in the Trust Account (“Instruction Letter”). You are hereby directed
and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the counsel’s letter 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 of the same and the Company shall direct you as to whether
such funds should remain in the Trust Account and distributed after the Consummation Date to the Company. Upon the distribution of all
the funds in the Trust Account pursuant to the terms hereof, the Trust Agreement shall be terminated.

 

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 the Trust Agreement on the business day immediately
following the Consummation Date as set forth in the notice.

 

	 	Very truly yours,
	 
	 	MONTEREY BIO ACQUISITION CORPORATION
	 
	 	By:	
	 	Name:
	 	Title:

 

cc: Chardan Capital Markets LLC

 

    

     

    

 

EXHIBIT B

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, N.Y. 10004

Attn: Francis Wolf and Celeste Gonzalez

 

Re:        Trust
Account - Termination Letter

 

Gentlemen:

 

Pursuant to paragraph 1(i)
of the Investment Management Trust Agreement between Monterey Bio Acquisition Corporation (“Company”) and Continental Stock
Transfer & Trust Company (“Trustee”), dated as of [______________], 2021 (“Trust Agreement”), this is to advise
you that the Company has been unable to effect a Business Combination with a Target Business within the time frame specified in the Company’s
Amended and Restated Certificate of Incorporation, as described in the Company’s prospectus relating to its IPO. Capitalized terms
used herein and not otherwise defined 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 the Trust Account investments and to transfer the total
proceeds to the trust operating account at J.P. Morgan Chase Bank, N.A. to await distribution to the Public Stockholders. The
Company has selected [____________, 20__]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. It is acknowledged that no interest will be earned by the Company on the liquidation proceeds while on deposit
in the trust operating account at J.P. Morgan Chase Bank, N.A. You agree to be the Paying Agent of record and
in your separate capacity as Paying Agent, to distribute said funds directly to the 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 in the Trust Account, your obligations under the Trust Agreement shall be terminated.

 

	 	Very truly yours,
	 	 
	 	MONTEREY BIO ACQUISITION CORPORATION
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

cc: Chardan Capital Markets LLC

 

 

 

1 12 months from the closing of the IPO or at a later date,
if extended.

 

    

     

    

 

EXHIBIT C

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, N.Y. 10004

Attn: Francis Wolf and Celeste Gonzalez

 

Re:        Trust
Account - Tax Payment Withdrawal Instruction

 

Gentlemen:

 

Pursuant to paragraph 2(a)
of the Investment Management Trust Agreement between Monterey Bio Acquisition Corporation (“Company”) and Continental Stock
Transfer & Trust Company (“Trustee”), dated as of [______________], 2021 (“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. The Company
needs such funds to pay for its tax obligations. 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]

 

	 	MONTEREY BIO ACQUISITION CORPORATION
	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title:

 

cc: Chardan Capital Markets LLC

 

    

     

    

 

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(j) of the Investment
Management Trust Agreement between Monterey Bio Acquisition Corporation (the “Company”) and Continental Stock Transfer &
Trust Company (the “Trustee”), dated as of _________, 2021 (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 Public Stockholders who
have requested redemption of their shares of 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 to affect the substance or timing of the Company’s obligation
to redeem all shares of Common Stock included in the Units sold in the IPO if the Company does not complete a Business Combination within
the time period set forth in the Company’s Amended and Restated Certificate of Incorporation.  As such, you are hereby
directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the financial institutions
that have redeemed shares on behalf of the Beneficiaries.

 

	 	MONTEREY BIO ACQUISITION CORPORATION
	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title:

 

cc: Chardan Capital Markets LLCExhibit 10.8

 

[●], 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 [●] warrants of the Company (“Private Warrants”), at a price of $1.00 per warrant
for an aggregate purchase price of $[●] (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 $[●] 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 $[●] 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;

 

	 	·	the undersigned agrees that the founder shares and Private Warrants held by it, and any shares of common stock issued upon conversion or exercise thereof, shall not be sold during the IPO, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of such securities by any person for a period of 180 days immediately following the date of effectiveness of the Registration Statement or commencement of sales of the IPO, except to any underwriter and selected dealer participating in the IPO and their bona fide officers or partners; provided that all securities so transferred remain subject to the foregoing lockup restriction for the remainder of the time period.1

 

		·	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 [●]’s liability company
agreement upon dissolution of [●], 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

 

1 Only for Chardan Monterey Investments LLC.

 

    1

     

    

 

		·	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,
	 	 
	 	[_____]
	 	 
	 	By:	 
	 	 	Name:  	 
	 	 	Title:	 

  

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

 

     

     

    

 

 Exhibit A

 

Wire Instructions

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