Exhibit 10.1

SHARE TRANSFER AGREEMENT

This Share Transfer Agreement (this “Agreement”), dated March 9, 2023, is entered into by and between [●] (“Transferee”) and [●] (“Transferor”).

Whereas, Transferor currently holds [●] shares of common stock, par value $0.0001 per share (the “Founder Shares”), of Monterey Bio Acquisition Corporation (the “Company”), and

Whereas, Transferor desires to transfer to Transferee [●] Founder Shares (the “Shares”) held by it, for consideration, as set forth below.

Now, Therefore, in consideration of the mutual promises and covenants set forth herein, the parties hereby agree as follows:

1.                  Transfer And Acquisition Of Shares. Transferor hereby transfers to Transferee, and Transferee hereby acquires from Transferor, the Shares for an aggregate purchase price of $[●] (the “Purchase Price”) subject to the forfeiture provisions of Section 2.3 below, on the terms and subject to the conditions set forth in this Agreement.

2.                  Representations, Warranties And Covenants Of Transferee. Transferee represents, warrants and covenants to Transferor and the Company as follows:

2.1              Authority; No Conflict; Enforceability. The Transferee has full legal right, power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement and the consummation by the Transferee of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) any agreement, indenture or instrument to which the Transferee is a party, (ii) any law, statute, rule or regulation to which the Transferee is subject, or (iii) any agreement, order, judgment or decree to which Transferee is subject. Upon execution and delivery by Transferee, this Agreement will be a legal, valid and binding agreement of the Transferee, enforceable against the Transferee in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

2.2              Compliance with Securities Laws. Transferee understands and acknowledges that, in reliance upon the representations and warranties made by Transferee herein, the Shares are not being registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “1933 Act”), but instead are being transferred under an exemption or exemptions from the registration and qualification requirements of the 1933 Act or other applicable securities laws which impose certain restrictions on Transferee’s ability to transfer the Shares.

2.3              Right of Repurchase. If the Transferee ceases to provide services as a director of the Company for any reason prior to the Company’s initial business combination (the “Business Combination”) the Company shall have the right, but not the obligation, to repurchase the Shares (including any portion thereof) from the Transferee for the lesser of (a) the fair market value of such Shares and (b) the Purchase Price paid for such Shares, it being understood and agreed that the foregoing right of repurchase shall terminate upon any such Business Combination. Any such repurchase right of the Company shall be exercised by the Company or its assigns by giving the Transferee written notice (“Repurchase Notice”) no later than one hundred eighty (180) days after the later of (i) the date Transferee ceases to provide services as a director of the Company and (ii) the one hundred eighty first (181^st) day following the date of this Agreement. The closing of the repurchase described herein shall occur as soon as reasonably practicable, and in any event not later than thirty (30) days after delivery of the applicable Repurchase Notice (provided, that such time shall be extended as necessary to comply with the requirements of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, or other applicable legal requirements), at the principal office of Transferor, or at such other time and location as the parties to such purchase may mutually determine, subject, however, to Transferee’s execution of any documentation as may be reasonably requested by the Company. The Company will pay for the Shares repurchased by it first by offsetting amounts outstanding under any bona fide debts, if any, owed by Transferee to the Company, including the Company, now existing or hereinafter arising, and will pay the remainder of the repurchase price by, at its option, (A) wire transfer of immediately available funds, (B) delivery of a check payable to the Transferee, (C) a promissory note payable upon consummation of the Business Combination and bearing interest at the applicable federal rate, or (D) any combination of (A), (B) and (C), in the aggregate amount of the repurchase price for such Shares. If no election under section 83(b) of the Internal Revenue Code of 1986, as amended, is made with respect to the Shares purchased hereunder, the Transferee will have ordinary income when the Shares are no longer subject to repurchase pursuant to this Section 2.3 in an amount equal to the excess of the fair market value of the Shares at that time over the amount the Transferee paid for the Shares. The Transferee acknowledges that the Shares may be subject to a contractual lock-up or other restriction on transfer at the time the Shares are no longer subject to repurchase pursuant to this Section 2.3.

2.4              Additional Shares or Substituted Securities. In the event of the declaration of a share capitalization, the declaration of a special dividend payable in a form other than common stock of the Company, a spin-off, a share sub-division, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s issued and outstanding common stock without receipt of consideration, any new, substituted or additional securities or other property which are by reason of such transaction distributed with respect to any Shares subject to this Agreement or into which such Shares thereby become convertible shall immediately be subject to this Agreement. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number or class of Shares subject to this Agreement.

2.5              Experience, Financial Capability and Suitability. Transferee is: (i) sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Shares and (ii) able to bear the economic risk of its investment in the Shares for an indefinite period of time because the Shares have not been registered under the 1933 Act and therefore cannot be resold unless such transaction is registered under the 1933 Act or an exemption from such registration is available. Transferee is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Transferee must bear the economic risk of this investment until the Shares are sold pursuant to: (x) an effective registration statement under the 1933 Act or (y) an exemption from registration available with respect to such sale. Transferee is able to bear the economic risks of an investment in the Shares and to afford a complete loss of the Transferee’s investment in the Shares.

2.6              Access to Information; Independent Investigation. Prior to the execution of this Agreement, Transferee has had the opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations, business and prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all information so obtained. In determining whether to make this investment, Transferee has relied solely on the Transferee’s own knowledge and understanding of the Company and its business based upon Transferee’s own due diligence investigation and the information furnished pursuant to this paragraph. Transferee understands that no person has been authorized to give any information or to make any representations which were not furnished pursuant to this Agreement and Transferee has not relied on any other representations or information in making its investment decision, whether written or oral, relating to the Company, its operations or its prospects.

2.7              Accredited Investor. Transferee represents that it is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the 1933 Act, and acknowledges the sale contemplated hereby is being made in reliance on one or more exemptions from the registration requirements of the 1933 Act and any applicable state securities laws.

2.8              Investment Purposes. Transferee is purchasing the Shares solely for investment purposes, for Transferee’s own account and not for the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof. Transferee did not enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502 of Regulation D under the 1933 Act.

2.9              Restrictions on Transfer; Shell Company. Transferee understands the Shares are being offered in a transaction not involving a public offering within the meaning of the 1933 Act. Transferee understands the Shares are “restricted securities” as defined in Rule 144(a)(3) under the 1933 Act and Transferee understands that any certificate or book entries representing the Shares will contain a legend in respect of such restrictions. If in the future Transferee decides to offer, resell, pledge or otherwise transfer the Shares, in addition to the restrictions on transfer contained in the Existing Agreements (as defined below), such Shares may be offered, resold, pledged or otherwise transferred only in accordance with the provisions of Section 2 hereof. Transferee agrees that if any transfer of its Shares or any interest therein is proposed to be made, as a condition precedent to any such transfer, Transferee may be required to deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration under the 1933 Act or an exemption therefrom, Transferee agrees not to resell the Shares. Transferee further acknowledges that because the Company is a shell company, Rule 144 may not be available to Transferee for the resale of the Shares until at least one year following consummation of the Business Combination, despite technical compliance with the certain requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.

2.10          Compliance with Securities Laws. The Transferee acknowledges that the Shares are being purchased pursuant to an exemption from the registration requirements of the 1933 Act and will become freely tradable only after certain conditions are met or they are registered pursuant to a registration rights agreement to be entered into with the Company.

2.11          Legends. All certificates representing the Shares shall have endorsed thereon legends substantially as follows, in addition to any legends contemplated by the Existing Agreements:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL (IF THE COMPANY SO REQUESTS), IS AVAILABLE.”

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO LOCKUP PROVISIONS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF DURING THE TERM OF THE LOCKUP PERIOD.”

3.                  Representations And Warranties Of Transferor. Transferor represents and warrants to Transferee as follows:

3.1              Authority. The Transferor has full legal right, power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement and the consummation by the Transferor of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the constitutional documents of Transferor, (ii) any agreement, indenture or instrument to which Transferor is a party, (iii) any law, statute, rule or regulation to which Transferor is subject, or (iv) any agreement, order, judgment or decree to which Transferor is subject. Upon execution and delivery by Transferor, this Agreement will be a legal, valid and binding agreement of the Transferor, as applicable, enforceable against the Transferor, as applicable, in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

3.2              Title to Shares. Transferor has valid marketable title to the Shares to be transferred under this Agreement, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest (collectively, “Encumbrances”). Transferor delivers to Transferee good title to the Shares purchased by such Transferee pursuant to the terms hereof free and clear of any Encumbrances.

4.                  Certain Acknowledgments and Agreements by Transferee. Transferee acknowledges and agrees that the Shares are subject to the restrictions and obligations as set forth in (a) that certain letter agreement, dated September 30, 2021 (as amended, the “Letter Agreement”), by and among between Transferee, the Company and the other parties thereto, and (b) that certain Stock Escrow Agreement, dated as of September 30, 2021 (the “Escrow Agreement” and, together with the Letter Agreement, the “Existing Agreements”), by and among the Company, Transferor and the other stockholders of the Company listed on the signature page thereto, and Continental Stock Transfer & Trust Company. Transferee hereby agrees to be bound by each of the Existing Agreements as if it were Transferor thereunder.

5.                  General Provisions.

5.1              Successors and Assigns. This Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

5.2              Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to that body of laws pertaining to conflict of laws.

5.3              Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement (including, without limitation, in the case of Transferee, joinders to the Existing Agreements in form and substance reasonably satisfactory to Transferor and the Company).

5.4              Severability. If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Agreement.

5.5              Third-Party Beneficiary. The Company is an intended third-party beneficiary of this Agreement and Transferor and Transferee acknowledge and agree that the Company will rely and is intended to rely on the provisions, representations and agreements set forth herein. Other than the foregoing, nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person, firm, corporation, partnership, association or other entity, other than the parties hereto and the Company and their respective successors and assigns, any rights or remedies under or by reason of this Agreement.

5.6              Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts, including by facsimile or electronic transmission, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, Transferor and Transferee have each executed this Agreement as of the date hereof.

[Signature Page to Share Transfer Agreement] 

IN WITNESS WHEREOF, Transferor and Transferee have each executed this Agreement as of the date hereof.

[Signature Page to Share Transfer Agreement]

Exhibit 10.2

March 9, 2023

Monterey Bio Acquisition Corporation

17 State Street

21st Floor

New York, NY 10004

Chardan Capital Markets, LLC

17 State Street, 21st Floor

New York, NY 10004

Re: Initial Public Offering

Gentlemen:

This letter agreement (this “Letter Agreement”), is being delivered to you in accordance with (A) the Share Transfer Agreement, dated March 9, 2023, by and between Chardan Monterey Investments LLC (the “Chardan Co-Sponsor”), a Delaware limited liability company, and NorthStar Bio Ventures LLC (the “NorthStar Co-Sponsor”), a Delaware limited liability company, and (B) the Side Letter Agreement, dated March 9, 2023, by and among the Chardan Co-Sponsor and the NorthStar Co-Sponsor. Certain capitalized terms used herein are defined in Section 12 hereof.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the undersigned hereby agrees with Monterey Bio Acquisition Corporation (the “Company”) as follows:

1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all shares of Common Stock beneficially owned by him or her, whether acquired before, in or after the IPO, in favor of such Business Combination.

2. (a) In the event that the Company fails to consummate a Business Combination within 21 months (or such later date as may be permitted pursuant to its Amended and Restated Certificate of Incorporation, as amended, and as may be further amended after the date hereof) from the closing of the Company’s IPO, the undersigned shall take all reasonable steps to (i) cause the Trust Fund to be liquidated and distributed to the holders of IPO Shares and (ii) cause the Company to liquidate as promptly as reasonably possible but not more than five business days after the date we are required to consummate a Business Combination.

(b) The undersigned hereby waives any and all right, title, interest or claim of any kind in or to any distribution of the Trust Fund and any remaining net assets of the Company as a result of such liquidation with respect to any shares he or she owns, including his or her Insider Shares, IPO Shares and Private Warrants purchased during or after the offering, if any, (“Claim”) and hereby waives any Claim the undersigned may have in the future as a result of, or arising out of, any contracts or agreements with the Company and will not seek recourse against the Trust Fund for any reason whatsoever.

3. The undersigned will place into escrow all of his or her Insider Shares pursuant to the terms of a Stock Escrow Agreement, dated September 30, 2021 (the “Escrow Agreement”), by and among the Company, the Initial Stockholders (as defined in the Escrow Agreement) and Continental Stock Transfer & Trust Company, as Escrow Agent (as defined in the Escrow Agreement). Pursuant to the Escrow Agreement, the undersigned will agree that during the Escrow Period (as defined in the Escrow Agreement), the undersigned will not sell or transfer its Insider Shares except (1) to any persons (including their affiliates and stockholders) participating in the private placement of the Private Warrants, officers, directors, stockholders, employees and members of the co-sponsors and their affiliates, (2) amongst initial stockholders or to the Company’s officers, directors and employees, (3) if a holder is an entity, as a distribution to its, partners, stockholders or members upon its liquidation, (4) by bona fide gift to a member of the holder’s immediate family or to a trust, the beneficiary of which is a holder or a member of a holder’s immediate family, for estate planning purposes, (5) by virtue of the laws of descent and distribution upon death, (6) pursuant to a qualified domestic relations order, (7) by certain pledges to secure obligations incurred in connection with purchases of the Company’s securities, or (8) by private sales at prices no greater than the price at which the shares were originally purchased, in each case (except with the prior consent of the Representative) where the transferee agrees to the terms of the Escrow Agreement and this Letter Agreement.

4. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or entity, any suitable opportunity to acquire a target business, until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company, subject to any pre-existing fiduciary and contractual obligations the undersigned might have.

5. The undersigned acknowledges and agrees that prior to entering into a Business Combination with a target business that is affiliated with any Insiders of the Company or their affiliates, including any company that is a portfolio company of, or otherwise affiliated with, or has received financial investment from, an entity with which any Insider or their affiliates is affiliated, such transaction must be approved by a majority of the Company’s disinterested independent directors and the Company must obtain an opinion from an independent investment banking firm that such Business Combination is fair to the Company’s unaffiliated stockholders from a financial point of view.

6. Except as set forth in the Registration Statement, neither the undersigned, any member of the family of the undersigned, nor any affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any affiliate of the undersigned originates a Business Combination.

7. The undersigned agrees to be a director or officer of the Company, as applicable, until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information previously furnished to the Company and the Representative is true and accurate in all material respects, does not omit any material information with respect to the undersigned’s biography and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The undersigned’s FINRA Questionnaire and Director and Officer Questionnaire previously furnished to the Company and the Representative is true and accurate in all material respects. The undersigned represents and warrants that, except as disclosed in the undersigned’s Director and Officer Questionnaire:

(a) he has never had a petition under the federal bankruptcy laws or any state insolvency law been filed by or against (i) him or her or any partnership in which he or she was a general partner at or within two years before the time of filing; or (ii) any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing;

(b) he or she has never had a receiver, fiscal agent or similar officer been appointed by a court for his or her business or property, or any such partnership;

(c) he or she has never been convicted of fraud in a civil or criminal proceeding;

(d) he or she has never been convicted in a criminal proceeding or named the subject of a pending criminal proceeding (excluding traffic violations and minor offenses);

(e) he or she has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining or otherwise limiting him or her from (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission (“CFTC”) or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity; or (ii) engaging in any type of business practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities or federal commodities laws;

(f) he or she has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than sixty (60) days his or her right to engage in any activity described in Section 7(e)(i) above, or to be associated with persons engaged in any such activity;

(g) he or she has never been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended or vacated;

(h) he or she has never been found by a court of competent jurisdiction in a civil action or by the CFTC to have violated any federal commodities law, where the judgment in such civil action or finding by the CFTC has not been subsequently reversed, suspended or vacated;

(i) he or she has never been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law or regulation, (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and desist order, or removal or prohibition order or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

(j) he or she has never been the subject of, or party to, any sanction or order, not subsequently reversed, suspended or vacated, or any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member;

(k) he or she has never been convicted of any felony or misdemeanor: (i) in connection with the purchase or sale of any security; (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment advisor or paid solicitor of purchasers of securities;

(l) he was never subject to a final order of a state securities commission (or an agency of officer of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the CFTC; or the National Credit Union Administration that is based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct;

(m) he or she has never been subject to any order, judgment or decree of any court of competent jurisdiction, that, at the time of such sale, restrained or enjoined him or her from engaging or continuing to engage in any conduct or practice: (i) in connection with the purchase or sale of any security; (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;

(n) he or she has never been subject to any order of the SEC that orders him or her to cease and desist from committing or causing a future violation of: (i) any scienter-based anti-fraud provision of the federal securities laws, including, but not limited to, Section 17(a)(1) of the Securities Act, Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)and Rule 10b-5 thereunder, and Section 206(1) of the Investment Advisers Act of 1940, as amended (the “Advisers Act”) or any other rule or regulation thereunder; or (ii) Section 5 of the Securities Act;

(o) he or she has never been named as an underwriter in any registration statement or Regulation A offering statement filed with the SEC that was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, currently, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued;

(p) he or she has never been subject to a United States Postal Service false representation order, or is currently subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations;

(q) he or she is not subject to a final order of a state securities commission (or an agency of officer of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the CFTC; or the National Credit Union Administration that bars the undersigned from: (i) association with an entity regulated by such commission, authority, agency or officer; (ii) engaging in the business of securities, insurance or banking; or (iii) engaging in savings association or credit union activities;

(r) he or she is not subject to an order of the SEC entered pursuant to Section 15(b) or 15(c) of the Exchange Act or Section 203(e) or 203(f) of the Advisers Act that: (i) suspends or revokes the undersigned’s registration as a broker, dealer, municipal securities dealer or investment adviser; (ii) places limitations on the activities, functions or operations of, or imposes civil money penalties on, such person; or (iii) bars the undersigned from being associated with any entity or from participating in the offering of any penny stock; and

(s) he or she has never been suspended or expelled from membership in, or suspended or barred from association with a member of, a securities self-regulatory organization (e.g., a registered national securities exchange or a registered national or affiliated securities association) for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade.

8. The undersigned has full right and power, without violating any agreement by which he or she is bound, to enter into this Letter Agreement and to serve as a director or officer of the Company, as applicable.

9. The undersigned hereby waives his or her right to exercise conversion rights with respect to any shares of Common Stock owned or to be owned by the undersigned, directly or indirectly, whether purchased by the undersigned prior to the IPO, in the IPO or in the aftermarket, and agrees that he or she will not seek conversion with respect to or otherwise sell, such shares in connection with any vote to approve a Business Combination with respect thereto, a vote to amend the provisions of the Company’s Amended and Restated Certificate of Incorporation, or a tender offer by the Company prior to a Business Combination.

10. The undersigned hereby agrees to not propose, or vote in favor of, an amendment to the Company’s Amended and Restated Certificate of Incorporation with respect to stockholder’s rights or the Company’s pre-Business Combination activities (including the substance or timing within which the Company has to complete a business combination) of a Business Combination unless the Company offers holders of IPO Shares the right to receive their pro rata portion of the funds then held in the Trust Fund upon approval of any amendment.

11. In connection with Section 5-1401 of the General Obligations Law of the State of New York, this Letter Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law that would result in the application of the substantive law of another jurisdiction. The parties hereto agree that any action, proceeding or claim arising out of or relating in any way to this Letter Agreement shall be resolved through final and binding arbitration in accordance with the International Arbitration Rules of the American Arbitration Association (“AAA”). The arbitration shall be brought before the AAA International Center for Dispute Resolution’s offices in New York City, New York, will be conducted in English and will be decided by a panel of three arbitrators selected from the AAA Commercial Disputes Panel and that the arbitrator panel’s decision shall be final and enforceable by any court having jurisdiction over the party from whom enforcement is sought. The cost of such arbitrators and arbitration services, together with the prevailing party’s legal fees and expenses, shall be borne by the non-prevailing party or as otherwise directed by the arbitrators.

12. As used herein, (i) a “Business Combination” shall mean a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities; (ii) “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO; (iii) “Insider Shares” shall mean all of the shares of Common Stock of the Company acquired by an Insider prior to the IPO and the purchase of the Private Warrants; (iv) “IPO Shares” shall mean the shares of Common Stock issued in the Company’s IPO; (v) “Private Warrants” shall mean the warrants purchased in the private placements that took place simultaneously with the consummation of the Company’s IPO; (vi) “Registration Statement” means the registration statement on Form S-1 filed by the Company with respect to the IPO; (vii) “Representative” means Chardan Capital Markets, LLC, as representative of the Underwriters; (viii) “Trust Fund” shall mean the trust fund into which a portion of the net proceeds of the Company’s IPO was deposited and (ix) “Underwriting Agreement” means that certain Underwriting Agreement entered into by and between the Company and the Underwriters; and (x) “Underwriters” means the Underwriters named in Schedule A to the Underwriting Agreement.

13. 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 electronic mail.

If to the Representative:

Chardan Capital Markets, LLC

17 State Street, 21st Floor

New York, NY 10004

Attn: Shai Gerson

Email: sgerson@chardan.com

Copy (which copy shall not constitute notice) to:

Goodwin Procter LLP
The New York Times Building

620 Eighth Avenue

New York, NY 10018

Attn: Rachael Bushey; Jocelyn M. Arel; Jeffrey A. Letalien

Email: rbushey@goodwinlaw.com; jarel@goodwinlaw.com; jletalien@goodwinlaw.com

If to the Company:

Monterey Bio Acquisition Corporation

17 State Street

21st Floor

New York, NY 10004

Attn: Sanjeev Satyal, Chief Executive Officer

Email: sanjeev@montereybio.com

Copy (which copy shall not constitute notice) to:

Greenberg Traurig, LLP

1750 Tysons Boulevard, Suite 1000

McLean, Virginia 22102

Attn: Jason Simon

Email: simonj@gtlaw.com

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 party. Any purported assignment in violation of this Section 14 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 parties hereto and any successors and assigns thereof.

15. The undersigned acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein. Nothing contained herein shall be deemed to render the Underwriters a representative of, or a fiduciary with respect to, the Company, its stockholders or any creditor or vendor of the company with respect to the subject matter hereof.

[Signature page to follow]

Acknowledged and Agreed:

Signature Page to Letter Agreement 

Exhibit 10.3

March 9, 2023

Monterey Bio Acquisition Corporation

17 State Street

21st Floor

New York, NY 10004

Chardan Monterey Investments LLC

17 State Street, 21st Floor

New York, NY 10004

NorthStar Bio Ventures, LLC

17 State Street

21st Floor

New York, NY 10004

Re: Initial Public Offering

Gentlemen:

Reference is made to that certain letter agreement dated September 30, 2021, by and among Chardan Monterey Investments LLC (the “Chardan Co-Sponsor”), a Delaware limited liability company and NorthStar Bio Ventures LLC (the “NorthStar Co-Sponsor” and together with the Chardan Co-Sponsor, the “Co-Sponsors”), a Delaware limited liability company and Monterey Bio Acquisition Corporation (the “Company”), a Delaware corporation (the “Original Letter Agreement”), which was delivered to you in accordance with (A) the Securities Assignment Agreement entered into by and between the Chardan Co-Sponsor and the NorthStar Co-Sponsor and (B) the Underwriting Agreement (the “Underwriting Agreement”) entered into by and between the Company and Chardan Capital Markets LLC, as representative (the “Representative”) of the Underwriters named in Schedule A thereto (the “Underwriters”), relating to an underwritten initial public offering (the “IPO”) of the Company’s units (the “Units”), each comprised of one share of Common Stock of the Company, par value $0.0001 per share (the “Common Stock”) and one warrant, with each warrant being exercisable to purchase one share of Common Stock at a price of $11.50 per full share (“Warrant”).

This letter agreement (this “Letter Agreement”), which amends and restates the Original Letter Agreement in its entirety, is being delivered to you in accordance with (A) the Share Transfer Agreement, dated March 9, 2023, by and between the Chardan Co-Sponsor and the NorthStar Co-Sponsor and (B) the Side Letter Agreement, dated March 9, 2023, by and among the Chardan Co-Sponsor and the NorthStar Co-Sponsor. Certain capitalized terms used herein are defined in Section 15 hereof.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Co-Sponsor hereby agrees with the Company as follows:

1. If the Company solicits approval of its stockholders of a Business Combination, each Co-Sponsor will vote all shares of Common Stock beneficially owned by it, whether acquired before, in or after the IPO, in favor of such Business Combination.

2. (a) In the event that the Company fails to consummate a Business Combination within 21 months (or such later date as may be permitted pursuant to its Amended and Restated Certificate of Incorporation, as amended, and as may be further amended after the date hereof) from the closing of the Company’s IPO, the Co-Sponsors shall take all reasonable steps to (i) cause the Trust Fund to be liquidated and distributed to the holders of IPO Shares and (ii) cause the Company to liquidate as promptly as reasonably possible but not more than five business days after the date the Company is required to consummate a Business Combination.

(b) Each Co-Sponsor hereby waives any and all right, title, interest or claim of any kind in or to any distribution of the Trust Fund and any remaining net assets of the Company as a result of such liquidation with respect to any shares it owns, including its Insider Shares, IPO Shares and Private Warrants purchased during or after the offering, if any, (“Claim”) and hereby waives any Claim such Co-Sponsor may have in the future as a result of, or arising out of, any contracts or agreements with the Company and will not seek recourse against the Trust Fund for any reason whatsoever. Each Co-Sponsor acknowledges and agrees that there will be no distribution from the Trust Fund with respect to any Common Stock underlying the Private Warrants, all rights of which will terminate on the Company’s liquidation.

(c) In the event of the liquidation of the Trust Fund, the Co-Sponsors agree to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount of funds in the Trust Fund; provided, that such indemnity shall not apply if such vendor or other person has executed an agreement waiving any claims against the Trust Fund.

(d) In the event that the Company does not consummate a Business Combination and must liquidate and its remaining net assets are insufficient to complete such liquidation, the Co-Sponsors agree to advance such funds necessary to complete such liquidation and agrees not to seek repayment for such expenses.

3. Each Co-Sponsor has placed into escrow all of its Insider Shares pursuant to the terms of the Stock Escrow Agreement, dated September 30, 2021 (the “Escrow Agreement”), by and among the Company, the Initial Stockholders (as defined in the Escrow Agreement) and Continental Stock Transfer & Trust Company, as Escrow Agent (as defined in the Escrow Agreement). Pursuant to the Escrow Agreement, each Co-Sponsor agreed that during the Escrow Period (as defined in the Escrow Agreement), such Co-Sponsor would not sell or transfer its Insider Shares except (1) to any persons (including their affiliates and stockholders) participating in the private placement of the Private Warrants, officers, directors, stockholders, employees and members of each Co-Sponsor and their affiliates, (2) amongst initial stockholders or to the Company’s officers, directors and employees, (3) if a holder is an entity, as a distribution to its, partners, stockholders or members upon its liquidation, (4) by bona fide gift to a member of the holder’s immediate family or to a trust, the beneficiary of which is a holder or a member of a holder’s immediate family, for estate planning purposes, (5) by virtue of the laws of descent and distribution upon death, (6) pursuant to a qualified domestic relations order, (7) by certain pledges to secure obligations incurred in connection with purchases of the Company’s securities, (8) by private sales at prices no greater than the price at which the shares were originally purchased or (9) in connection with the consummation of the Company’s initial Business Combination, in each case (except for clause (9) of this Section 3 or with the prior consent of the Representative) where the transferee agreed to the terms of the Escrow Agreement and this Letter Agreement.

4. Each Co-Sponsor agrees that until the Company consummates a Business Combination, such Co-Sponsor’s Private Warrants will be subject to the transfer restrictions described in the Private Placement Warrants Purchase Agreement relating to such Co-Sponsor’s Private Warrants.

5. In order to minimize potential conflicts of interest which may arise from multiple affiliations, each Co-Sponsor agrees to present to the Company for its consideration, prior to presentation to any other person or entity, any suitable opportunity to acquire a target business, until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company, subject to any pre-existing fiduciary and contractual obligations such Co-Sponsor might have.

6. Each Co-Sponsor acknowledges and agrees that prior to entering into a Business Combination with a target business that is affiliated with any Insiders of the Company or their affiliates, including any company that is a portfolio company of, or otherwise affiliated with, or has received financial investment from, an entity with which any Insider or their affiliates is affiliated, such transaction must be approved by a majority of the Company’s disinterested independent directors and the Company must obtain an opinion from an independent investment banking firm that such Business Combination is fair to the Company’s unaffiliated stockholders from a financial point of view.

7. Neither the Co-Sponsors, any member of the family of the Co-Sponsors, nor any affiliate of the Co-Sponsors will be entitled to receive or accept a finder’s fee or any other compensation in the event the Co-Sponsor, any member of the family of the Co-Sponsor or any affiliate of the Co-Sponsor originates a Business Combination.

8. Each Co-Sponsor’s FINRA Questionnaire previously furnished to the Company and/or the Representative is true and accurate in all material respects. Each Co-Sponsor represents and warrants that:

(a) it has never had a petition under the federal bankruptcy laws or any state insolvency law been filed by or against (i) it or any partnership in which it was a general partner at or within two years before the time of filing; or (ii) any corporation or business association of which it was an executive officer at or within two years before the time of such filing;

(b) it has never had a receiver, fiscal agent or similar officer been appointed by a court for its business or property, or any such partnership;

(c) it has never been convicted of fraud in a civil or criminal proceeding;

(d) it has never been convicted in a criminal proceeding or named the subject of a pending criminal proceeding (excluding traffic violations and minor offenses);

(e) it has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining or otherwise limiting it from (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission (“CFTC”) or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity; or (ii) engaging in any type of business practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities or federal commodities laws;

(f) it has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than sixty (60) days its right to engage in any activity described in Section 8(e)(i) above, or to be associated with persons engaged in any such activity;

(g) it has never been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended or vacated;

(h) it has never been found by a court of competent jurisdiction in a civil action or by the CFTC to have violated any federal commodities law, where the judgment in such civil action or finding by the CFTC has not been subsequently reversed, suspended or vacated;

(i) it has never been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law or regulation, (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and desist order, or removal or prohibition order or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

(j) it has never been the subject of, or party to, any sanction or order, not subsequently reversed, suspended or vacated, or any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member;

(k) it has never been convicted of any felony or misdemeanor: (i) in connection with the purchase or sale of any security; (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment advisor or paid solicitor of purchasers of securities;

(l) it was never subject to a final order of a state securities commission (or an agency of officer of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the CFTC; or the National Credit Union Administration that is based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct;

(m) it has never been subject to any order, judgment or decree of any court of competent jurisdiction, that, at the time of such sale, restrained or enjoined it from engaging or continuing to engage in any conduct or practice: (i) in connection with the purchase or sale of any security; (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;

(n) it has never been subject to any order of the SEC that orders it to cease and desist from committing or causing a future violation of: (i) any scienter-based anti-fraud provision of the federal securities laws, including, but not limited to, Section 17(a)(1) of the Securities Act of 1933, as amended (the “Securities Act”), Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 thereunder, and Section 206(1) of the Investment Advisers Act of 1940, as amended (the “Advisers Act”) or any other rule or regulation thereunder; or (ii) Section 5 of the Securities Act;

(o) it has never been named as an underwriter in any registration statement or Regulation A offering statement filed with the SEC that was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, currently, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued;

(p) it has never been subject to a United States Postal Service false representation order, or is currently subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations;

(q) it is not subject to a final order of a state securities commission (or an agency of officer of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the CFTC; or the National Credit Union Administration that bars the Co-Sponsor from: (i) association with an entity regulated by such commission, authority, agency or officer; (ii) engaging in the business of securities, insurance or banking; or (iii) engaging in savings association or credit union activities;

(r) it is not subject to an order of the SEC entered pursuant to Section 15(b) or 15(c) of the Exchange Act or Section 203(e) or 203(f) of the Advisers Act that: (i) suspends or revokes the Co-Sponsor’s registration as a broker, dealer, municipal securities dealer or investment adviser; (ii) places limitations on the activities, functions or operations of, or imposes civil money penalties on, such person; or (iii) bars the Co-Sponsor from being associated with any entity or from participating in the offering of any penny stock; and

(s) it has never been suspended or expelled from membership in, or suspended or barred from association with a member of, a securities self-regulatory organization (e.g., a registered national securities exchange or a registered national or affiliated securities association) for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade.

8. Each Co-Sponsor has full right and power, without violating any agreement by which he, she or it is bound, to enter into this Letter Agreement and to serve as a director or officer of the Company, as applicable.

9. Each Co-Sponsor hereby waives its right to exercise conversion rights with respect to any shares of Common Stock owned or to be owned by the Co-Sponsor, directly or indirectly, whether purchased by the Co-Sponsor prior to the IPO, in the IPO or in the aftermarket, and agrees that he, she or it will not seek conversion with respect to or otherwise sell, such shares in connection with any vote to approve a Business Combination with respect thereto, a vote to amend the provisions of the Company’s Amended and Restated Certificate of Incorporation, or a tender offer by the Company prior to a Business Combination.

10. Each Co-Sponsor hereby agrees to not propose, or vote in favor of, an amendment to the Company’s Amended and Restated Certificate of Incorporation with respect to stockholder’s rights or the Company’s pre-Business Combination activities (including the substance or timing within which the Company has to complete a business combination) of a Business Combination unless the Company offers holders of IPO Shares the right to receive their pro rata portion of the funds then held in the Trust Fund upon approval of any amendment.

11. In connection with Section 5-1401 of the General Obligations Law of the State of New York, this Letter Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law that would result in the application of the substantive law of another jurisdiction. The parties hereto agree that any action, proceeding or claim arising out of or relating in any way to this Letter Agreement shall be resolved through final and binding arbitration in accordance with the International Arbitration Rules of the American Arbitration Association (“AAA”). The arbitration shall be brought before the AAA International Center for Dispute Resolution’s offices in New York City, New York, will be conducted in English and will be decided by a panel of three arbitrators selected from the AAA Commercial Disputes Panel and that the arbitrator panel’s decision shall be final and enforceable by any court having jurisdiction over the party from whom enforcement is sought. The cost of such arbitrators and arbitration services, together with the prevailing party’s legal fees and expenses, shall be borne by the non-prevailing party or as otherwise directed by the arbitrators.

12. As used herein, (i) a “Business Combination” shall mean a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities; (ii) “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO; (iii) “Insider Shares” shall mean all of the shares of Common Stock of the Company acquired by an Insider prior to the IPO and the purchase of the Private Warrants; (iv) “Founder Shares” shall mean all of the shares of Common Stock acquired by the Co-Sponsors prior to the consummation of the IPO; (v) “IPO Shares” shall mean the shares of Common Stock issued in the Company’s IPO; (vi) “Private Warrants” shall mean the warrants purchased in the private placements that took place simultaneously with the consummation of the Company’s IPO; (vii) “Registration Statement” means the registration statement on Form S-1 filed by the Company with respect to the IPO; and (viii) “Trust Fund” shall mean the trust fund into which a portion of the net proceeds of the Company’s IPO was deposited.

13. 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 electronic mail.

If to the Representative:

Chardan Capital Markets, LLC

17 State Street, 21st Floor

New York, NY 10004

Attn: Shai Gerson

Email: sgerson@chardan.com

Copy (which copy shall not constitute notice) to:

Goodwin Procter LLP
The New York Times Building

620 Eighth Avenue

New York, NY 10018

Attn: Rachael Bushey; Jocelyn M. Arel; Jeffrey A. Letalien

Email: rbushey@goodwinlaw.com; jarel@goodwinlaw.com; jletalien@goodwinlaw.com

If to Chardan Monterey Investments LLC:

17 State Street, 21st Floor

New York, NY 10004

Attn: Hilary Senner

Email: HSenner@chardan.com

Copy (which copy shall not constitute notice) to:

Chardan Monterey Investments LLC
17 State Street, 21^st Floor
New York, NY 10004

Attn: Hilary Senner

Email: hsenner@chardan.com

If to NorthStar Bio Ventures LLC:

17 State Street

21st Floor

New York, NY 10004

Attn: Sandip Patel

Email: spatel@montereybio.com

Copy (which copy shall not constitute notice) to:

Greenberg Traurig, LLP

1750 Tysons Boulevard, Suite 1000

McLean, Virginia 22102

Attn: Jason Simon

Email: simonj@gtlaw.com

If to the Company:

Monterey Bio Acquisition Corporation

17 State Street, 21st Floor

New York, NY 10004

Attn: Sanjeev Satyal, Chief Executive Officer

Email: sanjeev@montereybio.com

Copy (which copy shall not constitute notice) to:

Greenberg Traurig, LLP

1750 Tysons Boulevard, Suite 1000

McLean, Virginia 22102

Attn: Jason Simon

Email: simonj@gtlaw.com

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 party. Any purported assignment in violation of this Section 14 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 parties hereto and any successors and assigns thereof.

15. Nothing in this Letter Agreement shall be construed to confer upon, or give to, any person or entity 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 Representative shall benefit from the provisions set forth in Section 3, which such Section shall not be amended or modified without the written consent of the Representative.

16. Each Co-Sponsor acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein. Nothing contained herein shall be deemed to render the Underwriters a representative of, or a fiduciary with respect to, the Company, its stockholders or any creditor or vendor of the company with respect to the subject matter hereof.

[Signature page to follow]

Acknowledged and Agreed:

[Signature Page to Letter Agreement (Co-Sponsors)] 

Exhibit 10.4

ASSIGNMENT AND ASSUMPTION

OF ADMINISTRATIVE SERVICES AGREEMENT

March 9, 2023

Reference is hereby made to that certain Administrative Service Agreement, dated September 30, 2021 (the “Agreement”), by and between Monterey Bio Acquisition Corporation (the “Company”) and NorthStar Bio Ventures, LLC (“Provider”), pursuant to which Provider makes available to the Company certain office space, utilities, general and administrative services and secretarial support as may be reasonably required by the Company in exchange for a sum of $10,000 per month.

This Assignment and Assumption of Administrative Services Agreement (this “Assignment”), between Provider (in such capacity, “Assignor”), Chardan Monterey Investments LLC (“Assignee”) and, solely for purposes of providing the consent to this Assignment required by the Agreement, the Company.

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Assignor and Assignee agree as follows:

1.                  Assignment. Assignor hereby grants, transfers and assigns to Assignee the entire right, title and interest under the Agreement, except as set forth in paragraph 4 hereof.

2.                  Assumption. Assignee hereby accepts the foregoing and assumes the covenants, agreements and obligations of Assignor under the Agreement which are applicable and required to be performed from and after the date of this Assignment, but not otherwise.

3.                  Consent. The Company hereby consents to the terms set forth in this Assignment.

4.                  Payments Due. To the extent any payments under the Agreement are waived by the Assignee, such waiver shall be apportioned between the Assignor and the Assignee on a pro rata basis, with the Assignor receiving that fraction of the payments made pursuant to the Agreement that is equal to (x) the time elapsed from the initial date of the Agreement to the date hereof over (y) the time elapsed from the initial date of the Agreement to its termination.

5.                  Further Assurances. Promptly upon request of the other party, Assignor and Assignee shall each execute, acknowledge (as appropriate) and deliver to the other such further assurances and take such further actions as may be reasonably required or appropriate to perfect the assignment and assumption of the Agreement and otherwise carry out the intent and purpose of this Assignment, provided that neither party shall incur any material additional cost, expense or obligation in connection with any act that the other party may request.

6.                  Binding Effect. The terms, covenants, conditions and obligations imposed upon each party herein shall be binding upon the successors and assigns of such party.

7.                  Miscellaneous. This Assignment constitutes the entire agreement between the parties with respect to the matters addressed herein. This Assignment may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and the same instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment as of the day and year first above written.

Signature Page to Assignment and Assumption of Administrative Services Agreement