RIBB 8-K
Ribbon Acquisition Corp. (RIBB)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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ITEM 1.01. Entry into a Material Definitive Agreement.
Forward Purchase Agreement
On September 2, 2026, Ribbon Acquisition Corp., a Cayman Islands exempted company, (“Ribbon”), DRC Medicine Ltd., a Japanese corporation (the “Target”), and Meteora Select Trading Opportunities Master, LP (the “Investor”) entered into an OTC Equity Prepaid Forward Transaction, evidenced by a confirmation (the “Forward Purchase Agreement”), under which the Investor agreed to purchase, following the closing of the previously announced business combination among Ribbon, PubCo, DRC Merger Inc. and the Target (the “Business Combination”), up to 4,100,000 shares (the “Maximum Number of Shares”) of PubCo common stock, par value $0.0001 per share (the “Common Shares”), consisting of (i) shares purchased by the Investor from third parties in the open market (“Recycled Shares”) and (ii) shares purchased directly from the Company pursuant to the Subscription Agreement described below (“Additional Shares”), in each case at a per-share price equal to the per-share redemption price payable to redeeming shareholders in connection with the Business Combination (the “Initial Price”).
Following the closing of the Business Combination, and upon delivery of a pricing date notice, the Company will pay the Investor a prepayment amount equal to the Initial Price multiplied by the number of shares specified in the notice, funded from the Company’s trust account, reduced on a dollar-for-dollar basis by the purchase price the Investor pays for Additional Shares under the Subscription Agreement. The transaction settles in cash on a valuation date that is six months after the closing of the Business Combination, subject to extension by mutual consent or earlier acceleration by the Investor upon a delisting event, based on the volume-weighted average trading price of the Common Shares over a specified valuation period following the valuation date, net of a settlement amount adjustment equal to $1.00 multiplied by the Maximum Number of Shares. The per-share reference price under the Forward Purchase Agreement is $10.00 for the first 30 days following the closing of the Business Combination and thereafter resets weekly to the lower of $10.00 and the volume-weighted average price of the Common Shares for the prior calendar week, subject to adjustment by mutual consent and upon certain dilutive offerings. The Company also agreed to reimburse the Investor’s legal fees and other expenses, together with expenses incurred in acquiring Recycled Shares, up to $80,000 in the aggregate, payable, at the Company’s election, in cash at the closing of the Business Combination (which amount may be netted against amounts otherwise fundable by the Investor) or by capitalization into the Note described below at 150% of the unpaid amount, with any amount not paid in cash at closing automatically so capitalized, in each case without duplication of the corresponding reimbursement provision of the SEPA described below.
In addition to the prepayment amount, the Company agreed to pay the Investor directly from the Company’s trust account, on the same date on which the prepayment amount is paid, an amount equal to the Initial Price multiplied by up to 50,000 Common Shares, with the final number to be determined by the Investor in its sole discretion. The shares purchased with this payment are incremental to, and are not counted toward, the Maximum Number of Shares or otherwise subject to the obligations of the Seller in connection with the Forward Purchase Agreement.
The Investor was also granted a right of first refusal, exercisable in its sole discretion for the period beginning on September 2, 2026 and ending on the date that is six months after the valuation date described above, to invest up to 33% of any future debt, equity, derivative or other financing of the Company, subject to the Company providing the Investor at least ten business days’ prior notice; provided, that this right of first refusal does not apply to any future equity line of credit.
The Forward Purchase Agreement also permits the Investor, at its election, to apply Recycled Shares and Additional Shares in satisfaction of amounts outstanding under the Note described below, at a price per share equal to the lower of the conversion price then in effect under the Note and the price that would then apply to an investor notice under the SEPA. Shares so applied reduce amounts outstanding under the Note without any payment premium, are not counted against the SEPA’s exchange cap, ownership and registration limitations or share reserve requirements, and do not permanently reduce the Maximum Number of Shares, which may be replenished through replacement subscriptions under the Subscription Agreement described below.
The Company (DRC Medicine Inc., a Delaware corporation (“PubCo”), following the Business Combination) agreed to file a registration statement covering resale of the Additional Shares within 30 calendar days of the closing of the Business Combination, and to use commercially reasonable efforts to have it declared effective as soon as practicable but no later than 60 calendar days thereafter (or 90 calendar days if the registration statement is reviewed by the SEC), subject to customary suspension rights.
Subscription Agreement
In connection with the Forward Purchase Agreement, on September 2, 2026, Ribbon and the Investor entered into a Subscription Agreement pursuant to which the Investor agreed to subscribe for and purchase from the Company, as Additional Shares under the Forward Purchase Agreement, up to the Maximum Number of Shares (less any Recycled Shares) at a per-share purchase price equal to the Initial Price. The Investor is not required to purchase Additional Shares to the extent doing so would cause its beneficial ownership to exceed 9.9% of the Company’s total outstanding shares immediately after issuance, unless waived by the Investor in its sole discretion. The closing of the purchase of Subscribed Shares is subject to customary conditions and will occur substantially concurrently with the closing of the Business Combination, other than with respect to Additional Shares purchased after that date in accordance with the Forward Purchase Agreement. The Subscription Agreement also provides for replacement subscriptions: if Common Shares are applied in satisfaction of Note obligations under the Forward Purchase Agreement, the Investor may subscribe for a corresponding number of additional Common Shares at the Initial Price, with the purchase price deemed prepaid by set-off against the corresponding additional prepayment amount under the Forward Purchase Agreement, such that no additional cash funding is required. PubCo has joined the Subscription Agreement and the Forward Purchase Agreement and, upon the closing of the Business Combination, will be substituted for Ribbon thereunder.
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Standby Equity Purchase Agreement
On September 2, 2026, Ribbon entered into a Standby Equity Purchase Agreement (the “SEPA”) with the Investor and the Target. PubCo, also joined the SEPA and agreed that, upon closing of the Business Combination, PubCo will be substituted for Ribbon as the “Company” and will assume Ribbon’s rights and obligations thereunder.
Following the closing of the Business Combination and subject to customary conditions, the Company will have the right, but not the obligation, to sell the Investor up to $100,000,000 of shares of Common Shares, over a 36-month commitment period beginning at closing, subject to extension by up to 24 months by mutual agreement and earlier termination as provided in the SEPA. During the commitment period, the Company may deliver advance notices requiring the Investor to purchase Common Shares at a price generally equal to 97% of the applicable market price, subject to the limitations in the SEPA. There is no minimum usage requirement and no fee on any unused commitment.
Issuances under the SEPA are subject to the availability of an effective registration statement, trading-volume limitations, and Nasdaq rules, including a 19.99% exchange cap on shares issued under the SEPA and related transaction documents absent stockholder approval, and a 4.9% beneficial ownership limitation on the Investor, subject to waiver or adjustment. The SEPA also restricts certain variable-rate financings and grants the Investor a right of first refusal on up to 33% of certain future financings. Common Shares applied in satisfaction of Note obligations under the Forward Purchase Agreement and the escrowed shares described below are outstanding shares that are not issued by the Company upon application and are not counted against these limitations.
As consideration for the commitment, the Company agreed to pay the Investor a commitment fee of 1.75% of the $100,000,000 commitment amount ($1,750,000), in two equal installments — the first payable upon effectiveness of the initial registration statement described below, and the second 90 days thereafter — payable, at the Company’s election, in cash or Common Shares valued at the closing price on the payment date. The Company also agreed to reimburse the Investor’s transaction expenses up to $80,000, payable on the same basis, and without duplication of, the reimbursement provision of the Forward Purchase Agreement described above.
Pre-Paid Advance and Convertible Promissory Note
The SEPA also provides for an initial pre-paid advance of $1,212,121 in aggregate principal amount, evidenced by a convertible promissory note (the “Note”) that Ribbon executed and delivered to the Investor on September 2, 2026 and that is binding on Ribbon from that date. The Note’s issuance and the funding of the initial advance will occur concurrently with the closing of the Business Combination, subject to closing conditions, at which time the Investor will pay $1,000,000 for the Note (a 17.5% original issue discount). Additional advances may be made by mutual written agreement.
The Note matures 12 months after the closing of the Business Combination, subject to extension by mutual consent; bears no interest absent an event of default (18% per annum during any default); and is subject to a 7% payment premium on amounts paid or redeemed.
The Investor may convert outstanding amounts into Common Shares at the lower of (i) a fixed price determined under the Note and (ii) 95% of the lowest daily volume-weighted average price of the Common Shares over the five trading days preceding conversion, subject to a floor price and other adjustments. Following certain amortization events, the Company may be required to make monthly principal payments plus the payment premium and accrued interest. Conversions are subject to a 9.9% beneficial ownership limitation, waivable on 61 days’ notice.
The Note is a senior unsecured obligation of the Company and contains customary events of default and covenants restricting additional indebtedness, liens, distributions and variable-rate financing transactions.
The Note requires the Company to apply 33% of the net proceeds of any debt, equity, equity-linked, derivative or other financing (other than equipment or purchase-money financing, inventory financing, accounts receivable financing or factoring, and ordinary-course working capital lines secured solely by such assets), including amounts payable to the Company under the Forward Purchase Agreement, to the repayment of outstanding principal within three business days of receipt, which prepayments the Investor may waive or defer and which are not subject to the payment premium. The principal amount of the Note will also be increased, automatically, by 150% of any unpaid expense reimbursement amounts capitalized into the Note as described above.
In addition, upon the closing of the Business Combination, certain shareholders of PubCo will deposit freely tradable Common Shares representing 9.9% of PubCo’s issued and outstanding Common Shares as of immediately following the closing into escrow with Continental Stock Transfer & Trust Company, as escrow agent, pursuant to an escrow agreement to be entered into prior to the closing among the Company, such shareholders, the Investor and the escrow agent. Upon an event of default under the Note, title to the escrowed shares will transfer to the Investor, free and clear of all liens, claims, encumbrances and transfer restrictions, with the value of such shares constituting partial liquidated damages and not limiting the Investor’s right to pursue damages in excess thereof or other remedies. Upon satisfaction in full of the obligations under the Note, title to the remaining escrowed shares will transfer back to the depositing shareholders.
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Registration Rights Agreement
In connection with the SEPA and the Note, Ribbon and the Investor entered into a Registration Rights Agreement on September 2, 2026, which PubCo also joined. The Company must file an initial registration statement covering resale of the Common Shares issuable under the transaction documents within 30 calendar days of the Business Combination closing, and use best efforts to have it declared effective within 60 calendar days of filing (or, if earlier, five business days after SEC notice that it will not be reviewed). Certain registration failures constitute an event of default under the Note and trigger monthly liquidated damages of 2% of the outstanding principal, capped at 24% in the aggregate.
The foregoing descriptions of the SEPA, the Note, the Registration Rights Agreement, the Forward Purchase Agreement and the Subscription Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to this Current Report on Form 8-K, respectively, and are incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
The Note and the Common Shares to be issued pursuant to the transaction documents will be issued in transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof and applicable exemptions under state securities laws.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements, including statements concerning the consummation and timing of the proposed Business Combination and the transactions contemplated by the SEPA, Forward Purchase Agreement, Subscription Agreement, Note and Registration Rights Agreement. These statements are subject to risks and uncertainties, including the failure to obtain approval of Ribbon shareholders, failure to satisfy or waive the applicable closing conditions, redemptions by Ribbon public shareholders, and the risk that one or more of the contemplated transactions may not be consummated as expected. Actual results may differ materially from those expressed or implied by these forward-looking statements.
Important Information and Where to Find It
In connection with the proposed Business Combination, Target and PubCo have filed a registration statement on Form S-4 (the “Registration Statement”) with the SEC, which has been declared effective. The final prospectus with respect to the securities to be issued in connection with the proposed Business Combination was filed on August 24, 2026 and Ribbon has mailed the definitive proxy statement/prospectus to its shareholders in connection with the special meeting of Ribbon shareholders to consider and vote on the Business Combination. Ribbon shareholders and other interested persons are urged to read the definitive proxy statement/final prospectus, along with other documents filed with the SEC by Target, Ribbon and/or PubCo, because these documents contain important information about Target, Ribbon, PubCo and the proposed Business Combination. Copies of these documents may be obtained free of charge at the SEC’s website at www.sec.gov.
NEITHER THE SEC NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS DOCUMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE PROPOSED BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
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Participants in the Solicitation
DRC, Ribbon, PubCo and their respective directors, executive officers and certain other members of management and employees may be deemed under SEC rules to be participants in the solicitation of proxies from Ribbon’s shareholders in connection with the Proposed Business Combination. Information regarding the names and interests of such persons is, or will be, contained in the filings of DRC, Ribbon and/or PubCo with the SEC, including the Registration Statement and the proxy statement/prospectus.
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute an offer to sell, or a solicitation of an offer to buy, or a recommendation to purchase, any securities in any jurisdiction, or the solicitation of any vote, consent or approval in any jurisdiction in connection with the Business Combination, nor shall there be any sale, issuance or transfer of any securities in any jurisdiction where, or to any person to whom, such offer, solicitation or sale may be unlawful under the laws of such jurisdiction. This Current Report on Form 8-K does not constitute either advice or a recommendation regarding any securities. No offering of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act, or an exemption therefrom.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
September 2, 2026
| Ribbon Acquisition Corp. | ||
| By: | /s/ Angshuman (Bubai) Ghosh | |
| Name: | Angshuman (Bubai) Ghosh | |
| Title: | Chief Executive Officer | |
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Exhibit 10.1
STANDBY EQUITY PURCHASE AGREEMENT
DRC Medicine Inc.
THIS STANDBY EQUITY PURCHASE AGREEMENT (this “Agreement”) dated as of September 2, 2026 is made by and among METEORA SELECT TRADING OPPORTUNITIES MASTER, LP, a Cayman Islands exempted limited partnership (together with its affiliates and permitted assigns, the “Investor”), RIBBON ACQUISITION CORP., a Cayman Islands exempted company (“RIBB”), and DRC MEDICINE LTD., a Japanese corporation (the “Target”). The term “Company” refers to RIBB until the closing of the Business Combination (as defined in Annex I) and, following the closing of the Business Combination, to DRC Medicine Inc., a Delaware corporation (“PubCo”). In connection with the transactions contemplated by the Business Combination Agreement, (i) PubCo and the Target will engage in a share exchange pursuant to which the Target will become a wholly-owned subsidiary of PubCo (the “Share Exchange”); (ii) RIBB will de-register as a Cayman Islands exempted company and domesticate as a Delaware corporation (the “Domestication”); and (iii) at the closing of the Business Combination, RIBB will merge with and into DRC Merger Inc., a Delaware corporation and wholly-owned subsidiary of PubCo (“Merger Sub”), with Merger Sub surviving as a wholly-owned subsidiary of PubCo (the “Merger”). RIBB executes and delivers this Agreement as the Company as of the date hereof, and, effective upon the closing of the Business Combination and pursuant to the Joinder of PubCo set forth on the signature pages hereof, PubCo shall be substituted for RIBB as, and shall assume and be bound by all of the obligations and liabilities of, the Company hereunder. The Target joins in this Agreement solely for purposes of the representations, warranties and covenants expressly applicable to it, including its agreement to cause the Business Combination to be consummated in accordance with the Business Combination Agreement, and shall not be deemed the “Company” or a “Party” for any other purpose hereunder. The Investor and the Company may be referred to herein individually as a “Party” and collectively as the “Parties.” The Parties acknowledge and agree that any previously executed standby equity purchase agreement, convertible promissory note and registration rights agreement, in each case among or between any of the Parties in connection with the transactions contemplated hereby, have been terminated and cancelled and are void and of no further force or effect.
WHEREAS, the Parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company, up to $100,000,000 of the Company’s shares of common stock, par value $0.0001 per share (the “Common Shares”);
WHEREAS, RIBB, PubCo, Merger Sub and the Target are parties to the Business Combination Agreement providing for the Business Combination, upon the closing of which PubCo will be the surviving publicly traded issuer of the Common Shares;
WHEREAS, the Common Shares will be listed for trading on the Nasdaq Stock Market upon the closing of the Business Combination under the symbol “DRC;”
WHEREAS, the offer and sale of the Common Shares issuable hereunder will be made in reliance upon Section 4(a)(2) under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the transactions to be made hereunder;
WHEREAS, the Parties are concurrently entering into a Registration Rights Agreement in the form attached as Exhibit A hereto (the “Registration Rights Agreement”), pursuant to which the Company shall register the resale of the Registrable Securities (as defined in the Registration Rights Agreement), upon the terms and subject to the conditions set forth therein; and
WHEREAS, in consideration of the Investor’s execution and delivery of this Agreement, the Company shall pay to the Investor the Commitment Fee pursuant to and in accordance with Section 12.04.
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WHEREAS, the Company, the Target and Meteora Capital, LLC have executed that certain Amended and Restated Term Sheet, dated as of August 29, 2026, and the Parties desire to enter into this Agreement as set forth herein.
NOW, THEREFORE, the Parties hereto agree as follows:
Article I. Certain Definitions
Capitalized terms used in this Agreement shall have the meanings ascribed to such terms in Annex I hereto, and hereby made a part hereof, or as otherwise set forth in this Agreement.
Article II. Pre-Paid Advances
Section 2.01 Pre-Paid Advances. Subject to the satisfaction of the conditions set forth in Annex II attached hereto, the Investor shall advance to the Company up to the principal amount of $1,212,121, or such greater aggregate principal amount as the Company and the Investor may mutually agree in writing (the “Pre-Paid Advance”), which shall be evidenced by one or more convertible promissory notes in the form attached hereto as Exhibit B (each, a “Promissory Note”) (it being understood that the Promissory Note evidencing the initial tranche shall be designated “DRCM-1”). The initial tranche of the Pre-Paid Advance shall be in an aggregate principal face amount of $1,212,121, funded at an aggregate purchase price of $1,000,000, and, subject to the satisfaction of the conditions set forth in Annex II attached hereto, shall be advanced on the Effective Date concurrently with the closing of the Business Combination (the “Pre-Advance Closing”). Additional tranches of the Pre-Paid Advance, if any, may be advanced upon the mutual written agreement of the Company and the Investor and subject to the satisfaction of the conditions set forth in Annex II.
Section 2.02 Pre-Advance Closing. The Pre-Advance Closing shall occur remotely by conference call and electronic delivery of documentation at 10:00 a.m., New York time, on the Effective Date, provided that the conditions set forth on Annex II have been satisfied (or such other date as is mutually agreed to by the Company and the Investor). At the Pre-Advance Closing the Investor shall advance to the Company the principal amount of the applicable tranche of the Pre-Paid Advance, less an original issue discount in the amount equal to seventeen and one-half percent (17.5%) of the principal amount of such tranche of the Pre-Paid Advance netted from the purchase price due (such that, for each $1,000 of principal face amount, the Company shall receive $825 in net proceeds), in immediately available funds to an account designated by the Company in writing, and the Company shall deliver a Promissory Note with a principal amount equal to the full amount of the applicable tranche of the Pre-Paid Advance, duly executed on behalf of the Company.
Article III. Advances
Section 3.01 Advances; Mechanics. Upon the terms and subject to the conditions of this Agreement, during the Commitment Period, the Company, at its sole discretion, shall have the right, but not the obligation, to issue and sell to the Investor, and the Investor shall subscribe for and purchase from the Company, Advance Shares by the delivery to the Investor of Advance Notices, provided (x) no balance is outstanding under a Promissory Note, or (y) if there is a balance outstanding under a Promissory Note, then the Company may submit an Advance Notice in accordance with Section 3.01(a)(iii) hereof, in each case on the following terms:
| (a) | Advance Notice. At any time during the Commitment Period, the Company may require the Investor to purchase Shares by delivering an Advance Notice to the Investor, subject to the satisfaction or waiver by the Investor of the conditions set forth in Annex III, and in accordance with the following provisions: |
| (i) | The Company shall, in its sole discretion, select the number of Advance Shares, not to exceed the Maximum Advance Amount (unless otherwise agreed to in writing by the Company and the Investor), it desires to issue and sell to the Investor in each Advance Notice, the time it desires to deliver each Advance Notice, and the Pricing Period to be used. |
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| (ii) | There shall be no mandatory minimum Advances and there shall be no non-usage fee for not utilizing the Commitment Amount or any part thereof. |
| (iii) | For so long as any amount remains outstanding under a Promissory Note, without the prior written consent of the Investor, the Company may only submit an Advance Notice (A) if an Amortization Event has occurred and the obligation of the Company to make monthly prepayments under the Promissory Note has not ceased, and (B) the aggregate purchase price owed to the Company from such Advances (“Advance Proceeds”) shall be paid by the Investor by offsetting the amount of the Advance Proceeds against an equal amount outstanding under the subject Promissory Note (applied first towards any costs, fees and expenses then due and payable under the subject Promissory Note, then towards the Payment Premium (as defined in the Promissory Note) due in respect of the principal amount being offset, then towards accrued and unpaid interest, and then towards outstanding principal). For the avoidance of doubt, while a Promissory Note is outstanding, the purchase price per Share for any Advance effected pursuant to this Section 3.01(a)(iii) shall be the Conversion Price (as defined in the Promissory Note), and each such purchase shall reduce the outstanding balance of the applicable Promissory Note as of the date the related Advance Notice is delivered. |
| (b) | Investor Notices. For so long as any amount remains outstanding under a Promissory Note, the Investor may, from time to time in its sole discretion, deliver one or more written notices to the Company, substantially in the form attached hereto as Exhibit E and executed by the Investor (each, an “Investor Notice”), requiring the Company to issue and sell to the Investor the number of Common Shares set forth in such Investor Notice. The purchase price per Share for each issuance and sale of Shares pursuant to an Investor Notice shall be equal to the Conversion Price (as defined in the Promissory Note) in effect on the date such Investor Notice is delivered to the Company. The aggregate purchase price owed to the Company in respect of each Investor Notice shall not be paid in cash, but shall instead be paid by the Investor by offsetting the amount of such aggregate purchase price against an equal amount outstanding under the applicable Promissory Note as of the date such Investor Notice is delivered, applied first towards any costs, fees and expenses then due and payable under the applicable Promissory Note, then towards accrued and unpaid interest thereunder, and then towards outstanding principal thereunder; for the avoidance of doubt, no Payment Premium (as defined in the Promissory Note) shall be due, payable or applied in respect of any amount offset pursuant to an Investor Notice. Shares issued and sold pursuant to an Investor Notice shall constitute Advance Shares for all purposes of this Agreement, including, without limitation, the delivery of a Settlement Document and the settlement and delivery mechanics set forth in Section 3.05 (with such Shares to be delivered no later than one Trading Day after the Company’s receipt of the applicable Settlement Document by crediting the Investor’s account or its designee’s account at the Depository Trust Company through its Deposit Withdrawal at Custodian System, and without any restrictive legends for so long as there is an effective Registration Statement covering the resale of such Shares), subject only to the Ownership Limitation, the Registration Limitation and the Exchange Cap set forth in Section 3.02; provided, for the avoidance of doubt, that the Volume Threshold and the limitations set forth in Section 3.02(d) and the Minimum Acceptable Price mechanics set forth in Section 3.03 shall not apply to any Investor Notice or to the Shares issuable pursuant thereto. |
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| (c) | Date of Delivery of Advance Notice. Advance Notices shall be delivered in accordance with the instructions set forth on the bottom of Exhibit C attached hereto. An Advance Notice selecting an Option 1 Pricing Period shall only be delivered on a Trading Day and shall be deemed delivered on the day such notice is received by e-mail. An Advance Notice selecting an Option 2 Pricing Period shall be deemed delivered on (i) the day it is received by the Investor if such notice is received by e-mail at or before 9:00 a.m. New York City time (or at such later time if agreed to by the Investor in its sole discretion), or (ii) the immediately succeeding day if it is received by e-mail after 9:00 a.m. New York City time. Upon receipt of an Advance Notice, the Investor shall promptly (and, with respect to an Advance Notice selecting an Option 1 Pricing Period, in no event more than one-half hour after receipt) provide written confirmation (which may be by e-mail) of receipt of such Advance Notice, and which confirmation, in the case of an Advance Notice selecting an Option 1 Pricing Period, shall specify the commencement time of the Option 1 Pricing Period. |
Section 3.02 Advance Limitations, Regulatory. Regardless of the Advance requested in an Advance Notice and notwithstanding any provision to the contrary herein, the final number of Shares to be issued and sold pursuant to such Advance Notice shall be reduced (if at all) in accordance with each of the following limitations:
| (a) | Ownership Limitation; Commitment Amount. At the request of the Company, the Investor shall inform the Company of the number of Common Shares the Investor beneficially owns. Notwithstanding anything to the contrary contained in this Agreement, the Investor shall not be obligated to purchase or acquire, and shall not purchase or acquire, any Common Shares under this Agreement which, when aggregated with all other Common Shares beneficially owned by the Investor and its Affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Investor and its Affiliates (on an aggregated basis) of a number of Common Shares exceeding 4.9% of the then outstanding voting power or number of Common Shares (the “Ownership Limitation”). In connection with each Advance Notice, any portion of an Advance that would (i) cause the Investor to exceed the Ownership Limitation or (ii) cause the aggregate number of Shares issued and sold to the Investor hereunder to exceed the Commitment Amount shall automatically be withdrawn with no further action required by the Company, and such Advance Notice shall be deemed automatically modified to reduce the Advance by an amount equal to such withdrawn portion; provided that in the event of any such automatic withdrawal and automatic modification, the Investor will promptly notify the Company of such event. Notwithstanding the foregoing, the Investor may, in its sole discretion, elect to waive the Ownership Limitation or to increase the Ownership Limitation to a higher percentage of the then outstanding voting power or number of Common Shares specified by the Investor, in each case by delivering written notice of such election to the Company, and upon delivery of such notice the Ownership Limitation shall be deemed amended to the percentage so specified (or waived in its entirety, as applicable) for all purposes of this Agreement. |
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| (b) | Registration Limitation. In no event shall an Advance exceed the number of Common Shares registered in respect of the transactions contemplated hereby under the Registration Statement then in effect (the “Registration Limitation”). In connection with each Advance Notice, any portion of an Advance that would exceed the Registration Limitation shall automatically be withdrawn with no further action required by the Company and such Advance Notice shall be deemed automatically modified to reduce the aggregate amount of the requested Advance by an amount equal to such withdrawn portion; provided that in the event of any such automatic withdrawal and automatic modification, the Investor will promptly notify the Company of such event. |
| (c) | Compliance with Rules of Principal Market. Notwithstanding anything to the contrary herein, the Company shall not effect any sales under this Agreement and the Investor shall not have the obligation to purchase Common Shares under this Agreement to the extent (but only to the extent) that after giving effect to such purchase and sale the aggregate number of Common Shares issued under this Agreement (including, without limitation, any Commitment Shares and Common Shares underlying the Promissory Notes) would exceed a number of Common Shares equal to 19.99% of the aggregate number of Common Shares issued and outstanding immediately following the closing of the Business Combination (which, based on the maximum redemption scenario set forth in the registration statement on Form S-4 (File No. 333-295712) filed by PubCo in connection with the Business Combination, the Parties estimate to be approximately 7,444,418 Common Shares, such estimate being subject to adjustment based on the actual number of Common Shares issued and outstanding immediately following the closing of the Business Combination, including as a result of actual redemptions by holders of RIBB Class A ordinary shares and any acquisition by the Investor of such shares from redeeming holders or in the open market in connection therewith) (subject to adjustment for any stock splits, combinations or the like), calculated in accordance with the rules of the Principal Market, which number shall be reduced, on a share-for-share basis, by the number of Common Shares issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by this Agreement under the applicable rules of the Principal Market (such maximum number of shares, the “Exchange Cap”); provided that, the Exchange Cap will not apply if the Company’s stockholders have approved the issuance of Common Shares pursuant to this Agreement in excess of the Exchange Cap in accordance with the applicable rules of the Principal Market. In connection with each Advance Notice, any portion of an Advance that would exceed the Exchange Cap shall automatically be withdrawn with no further action required by the Company and such Advance Notice shall be deemed automatically modified to reduce the aggregate amount of the requested Advance by an amount equal to such withdrawn portion in respect of each Advance Notice. |
| (d) | Volume Threshold. In connection with an Advance Notice where the Company selects an Option 1 Pricing Period, if the total number of Common Shares traded on the Principal Market during the applicable Pricing Period is less than the Volume Threshold, then the number of Advance Shares issued and sold pursuant to such Advance Notice shall be reduced to the lesser of (a) the Volume Threshold Percentage of the trading volume of the Common Shares on the Principal Market during such Pricing Period as reported by Bloomberg L.P., or (b) the number of Common Shares sold by the Investor during such Pricing Period, but in each case not to exceed the amount requested in the Advance Notice. Notwithstanding anything to the contrary contained herein, the Investor shall not be required to sell, and the Company shall not be required to issue, a number of Shares pursuant to any Advance Notice (whether under an Option 1 Pricing Period or Option 2 Pricing Period) that would exceed the Volume Threshold Percentage of the total trading volume of the Common Shares during the applicable Pricing Period, as reported by Bloomberg L.P., and the size of any such Advance shall be automatically reduced, without notice or further action by either Party, accordingly. |
| (e) | Applied Shares; Collateral Shares. Notwithstanding anything to the contrary contained in this Agreement, (i) any Recycled Shares or Additional Shares (each as defined in the Forward Purchase Confirmation) applied in satisfaction of amounts outstanding under any Promissory Note pursuant to the section captioned “Application of Shares to Note Obligations” of that certain Confirmation re: OTC Equity Prepaid Forward Transaction, dated as of September 2, 2026, among the Investor, RIBB and the Target (the “Forward Purchase Confirmation”), and (ii) any Collateral Shares (as defined in the Promissory Notes) applied, sold or transferred in satisfaction of amounts outstanding under any Promissory Note, in each case, are outstanding Common Shares that are not issued by the Company upon such application, sale or transfer, shall not constitute Advances or Shares issued and sold pursuant to this Agreement, and shall not be counted against, or reduce availability under, the Ownership Limitation, the Registration Limitation, the Exchange Cap, the Commitment Amount or the share reserve requirements of Section 7.09, and no such application, sale or transfer shall require an Advance Notice or Investor Notice or be subject to the Volume Threshold, Section 3.02(d) or the Minimum Acceptable Price mechanics set forth in Section 3.03. |
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Section 3.03 Advance Limitations, Minimum Acceptable Price.
| (a) | With respect to each Advance Notice selecting an Option 2 Pricing Period, the Company may notify the Investor of the Minimum Acceptable Price with respect to such Advance by indicating a Minimum Acceptable Price on such Advance Notice. If no Minimum Acceptable Price is specified in an Advance Notice, then no Minimum Acceptable Price shall be in effect in connection with such Advance. Each Trading Day during an Option 2 Pricing Period for which (A) with respect to each Advance Notice with a Minimum Acceptable Price, the VWAP of the Common Shares is below the Minimum Acceptable Price in effect with respect to such Advance Notice, or (B) there is no VWAP (each such day, an “Excluded Day”), shall result in an automatic reduction to the number of Advance Shares set forth in such Advance Notice by one third (1/3) (the resulting amount of each Advance being the “Adjusted Advance Amount”), and each Excluded Day shall be excluded from the Option 2 Pricing Period for purposes of determining the Market Price. |
| (b) | The total Advance Shares in respect of each Advance with any Excluded Day(s) (after reductions have been made to arrive at the Adjusted Advance Amount) shall be automatically increased by such number of Common Shares (the “Additional Shares”) equal to the greater of (a) the number of Common Shares sold by the Investor on such Excluded Day(s), if any, or (b) such number of Common Shares elected to be subscribed for by the Investor, and the subscription price per share for each Additional Share shall be equal to the Minimum Acceptable Price in effect with respect to such Advance Notice multiplied by 95%, provided that this increase shall not cause the total Advance Shares to exceed the amount set forth in the applicable Advance Notice or any limitations set forth in Section 3.02. |
Section 3.04 Unconditional Contract. Notwithstanding any other provision in this Agreement, the Company and the Investor acknowledge and agree that upon the Investor’s receipt of a valid Advance Notice from the Company the Parties shall be deemed to have entered into an unconditional contract binding on both Parties for the purchase and sale of the applicable number of Advance Shares pursuant to such Advance Notice in accordance with the terms of this Agreement and (i) subject to Applicable Laws and (ii) subject to the covenants set forth in Article VII, the Investor may sell Common Shares during the Pricing Period for such Advance Notice (including with respect to any Advance Shares subject to such Pricing Period).
Section 3.05 Closings. The closing of each Advance and each sale and purchase of Advance Shares (each, a “Closing”) shall take place as soon as practicable on or after each applicable Advance Date in accordance with the procedures set forth below. The Company acknowledges that the Purchase Price is not known at the time an Advance Notice is delivered (at which time the Investor is irrevocably bound) but shall be determined on each Closing based on the daily prices of the Common Shares that are the inputs to the determination of the Purchase Price. In connection with each Closing, the Company and the Investor shall fulfill each of its obligations as set forth below:
| (a) | On or prior to each Advance Date, the Investor shall deliver to the Company a Settlement Document along with a report by Bloomberg L.P. (or, if not reported on Bloomberg L.P., another reporting service reasonably agreed to by the Parties) indicating the VWAP for each of the Trading Days during the Pricing Period in accordance with the terms and conditions of this Agreement. |
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| (b) | Promptly after receipt of the Settlement Document with respect to each Advance (and, in any event, not later than one Trading Day after such receipt), the Company will, or will cause its transfer agent to, electronically transfer such number of Advance Shares to be purchased by the Investor (as set forth in the Settlement Document) by crediting the Investor’s account or its designee’s account at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the Parties hereto. Promptly upon receipt of such notification, the Investor shall pay to the Company the aggregate purchase price of the Shares (as set forth in the Settlement Document) either (i) in the case of an Advance Notice submitted other than after the occurrence of an Amortization Event, in cash in immediately available funds to an account designated by the Company in writing, or (ii) in the case of an Advance Notice submitted after the occurrence of an Amortization Event or an Advance effected pursuant to an Investor Notice, as an offset of amounts owed under the applicable Promissory Note as described in this Agreement (applied in accordance with Section 3.01(a)(iii) or Section 3.01(b), as applicable). No fractional shares shall be issued, and any fractional shares that would otherwise be issued in connection with an Advance shall be rounded to the next higher whole number of shares. To facilitate the transfer of the Common Shares by the Investor, the Common Shares will not bear any restrictive legends so long as there is an effective Registration Statement covering the resale of such Common Shares. |
| (c) | On or prior to the Advance Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings expressly required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein. |
| (d) | Notwithstanding anything to the contrary in this Agreement, if on any day during the Pricing Period |
(i) the Company notifies the Investor that a Material Outside Event has occurred, or (ii) the Company notifies the Investor of a Black Out Period, the Parties agree that any pending Advance shall end and the final number of Advance Shares to be purchased by the Investor at the Closing for such Advance shall be equal to the number of Common Shares sold by the Investor during the applicable Pricing Period prior to the notification from the Company of a Material Outside Event or Black Out Period.
Section 3.06 Hardship. In the event the Company fails to perform its obligations as mandated in this Agreement after the Investor’s receipt of an Advance Notice, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Article VI hereto and in addition to any other remedy to which the Investor is entitled at law or in equity, including, without limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company. It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to Applicable Laws and the rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement.
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Article IV. Representations, Warranties and Covenants of the Investor
The Investor represents, warrants, and covenants to the Company, as of the date hereof, as of each Advance Notice Date and as of each Advance Date that:
Section 4.01 Organization and Authorization. The Investor is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation and has the requisite power and authority to enter into and perform its obligations under the Transaction Documents to which it is a party and to purchase or acquire the Shares in accordance with the terms hereof. The execution and delivery of the Transaction Documents to which it is a party by the Investor, the performance by the Investor of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby have been duly authorized and require no other proceedings on the part of the Investor. This Agreement and the Transaction Documents to which it is a party have been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.
Section 4.02 Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Common Shares and of protecting its interests in connection with the transactions contemplated hereby. The Investor acknowledges and agrees that its investment in the Company involves a high degree of risk, and that the Investor may lose all or a part of its investment.
Section 4.03 No Legal, Investment or Tax Advice from the Company. The Investor acknowledges that it had the opportunity to review the Transaction Documents and the transactions contemplated by the Transaction Documents with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of the Company’s representatives or agents for legal, tax, investment or other advice with respect to the Investor’s acquisition of Common Shares hereunder, the transactions contemplated by this Agreement or the laws of any jurisdiction.
Section 4.04 Investment Purpose. The Investor is acquiring the Common Shares and any Promissory Notes for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the registration requirements of the Securities Act; provided, however, that by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance with, or pursuant to, a Registration Statement filed pursuant to this Agreement or an applicable exemption under the Securities Act. The Investor acknowledges that it will be disclosed as an “underwriter” and a “selling stockholder” in each Registration Statement and in any Prospectus contained therein to the extent required by applicable law.
Section 4.05 Accredited Investor. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D.
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Section 4.06 Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information the Investor deemed material to making an informed investment decision, and have been afforded the opportunity to ask questions of the Company and its management and have received answers to such questions. The Investor understands that its investment involves a high degree of risk.
Section 4.07 Not an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any “Affiliate” (as that term is defined in Rule 405 promulgated under the Securities Act) of the Company.
Section 4.08 General Solicitation. Neither the Investor, nor any of its affiliates, nor any person acting on its or their behalf, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Common Shares by the Investor.
Section 4.09 No Short Sales. The Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Investor, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales involving the Company’s securities) during the period commencing as of the time that the Investor first contacted the Company or the Company’s agents regarding the specific investment in the Company contemplated by this Agreement and ending immediately prior to the execution of this Agreement. The Investor covenants that, during the Commitment Period, neither the Investor nor any of its Affiliates, nor any Person acting on its or their behalf, shall engage in any Short Sales of the Company’s securities. Notwithstanding the foregoing, nothing in this Section 4.09 shall restrict, and none of the following shall constitute or be deemed, a Short Sale for purposes of this Agreement: sales of Common Shares (i) that the Investor is unconditionally bound to purchase pursuant to a pending Advance Notice in accordance with Section 3.04, (ii) issuable to the Investor upon conversion of a Promissory Note pursuant to a Conversion Notice (as defined in the Promissory Note) that has been delivered to the Company, consistent with the Investor being deemed to own such Common Shares for purposes of Rule 200(b) of Regulation SHO under the Exchange Act, or (iii) subject to an Investor Notice that has been delivered to the Company, in each case sold by the Investor in anticipation of its receipt of such Common Shares.
Article V. Representations and Warranties of the Company
Except as set forth in the SEC Documents or in the disclosure schedules delivered by the Company to the Investor (the “Disclosure Schedules”), the Company represents and warrants to the Investor that, as of the date hereof, each Advance Notice Date and each Advance Date (other than representations and warranties which address matters only as of a certain date, which shall be true and correct as written as of such certain date):
Section 5.01 Organization and Qualification. The Company and each of its Subsidiaries are entities duly organized, validly existing and in good standing under the laws of their respective jurisdictions of organization and have the requisite power and authority to own their properties and to carry on their business as now being conducted, except where the failure to be so qualified or in good standing would not reasonably be expected to have a Material Adverse Effect.
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Section 5.02 Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Shares in accordance with the terms hereof and thereof. The execution and delivery by the Company of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby (including the issuance of the Shares) have been (or, with respect to consummation, will be) duly authorized by the Company’s board of directors and no further consent or authorization will be required. The Transaction Documents constitute (or, when executed and delivered, will constitute) the legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms, subject to customary bankruptcy and equitable-remedies exceptions.
Section 5.03 Authorization of the Shares. The Shares to be issued under this Agreement have been, or with respect to Shares to be purchased pursuant to an Advance Notice will be, when issued and delivered against payment therefor as provided herein, duly and validly authorized and issued, fully paid and nonassessable, free and clear of any Lien (other than restrictions on transfer under applicable securities laws) and not subject to preemptive or similar rights. As of the date of the Pre-Advance Closing, and at all times thereafter, the Company shall have reserved from its duly authorized capital stock not less than the number of Common Shares issuable upon conversion of all Promissory Notes and pursuant to all Advances.
Section 5.04 No Conflicts. The execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate the Company’s organizational documents, (ii) conflict with, or constitute a default under, any Material Agreement, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Company, except, in the case of clauses (ii) and (iii), as would not reasonably be expected to have a Material Adverse Effect.
Section 5.05 Consents. The Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, other than (i) the filing of the Registration Statement, (ii) filings required under applicable federal and state securities laws, (iii) the notice and/or application to the Principal Market, and
(iv) those that have been or will be made or obtained prior to the applicable Advance Date.
Section 5.06 SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the Exchange Act (the “SEC Documents”). As of their respective filing dates, the SEC Documents complied in all material respects with the applicable requirements of the Exchange Act, and the financial statements included therein were prepared in accordance with GAAP and fairly present in all material respects the financial position of the Company as of the dates indicated, subject, in the case of unaudited statements, to normal year-end audit adjustments.
Section 5.07 Capitalization. The capitalization of the Company is as set forth in the SEC Documents and the Disclosure Schedules. All outstanding Common Shares have been duly authorized and validly issued and are fully paid and nonassessable. Except as disclosed, there are no outstanding options, warrants or other rights to subscribe for or purchase any Common Shares or Common Share Equivalents that would be triggered by the issuance of the Shares.
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Section 5.08 Absence of Certain Changes. Since the date of the most recent financial statements included in the SEC Documents, except as disclosed, there has been no event, occurrence or development that has had or would reasonably be expected to have a Material Adverse Effect.
Section 5.09 Litigation. Except as disclosed in the SEC Documents, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against the Company that would reasonably be expected to have a Material Adverse Effect or that challenges the validity of the Transaction Documents.
Section 5.10 Compliance. The Company is not (i) in default under or in violation of its organizational documents, (ii) in default under any Material Agreement, or (iii) in violation of any law, ordinance or regulation of any governmental entity, except, in the case of clauses (ii) and (iii), as would not reasonably be expected to result in a Material Adverse Effect.
Section 5.11 No Integration; No General Solicitation. Neither the Company nor any of its Affiliates has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) for the exemption from registration for the transactions contemplated hereby or would require registration of the Common Shares under the Securities Act, and none of them has engaged in any form of general solicitation or general advertising in connection with the offering of the Shares.
Section 5.12 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by the Transaction Documents based upon arrangements made by or on behalf of the Company, other than as may be disclosed in the Disclosure Schedules.
Section 5.13 Internal Accounting and Disclosure Controls. The Company maintains a system of internal accounting controls and disclosure controls and procedures sufficient to comply in all material respects with the requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002, in each case to the extent applicable to the Company.
Section 5.14 Environmental Matters. Except as would not reasonably be expected to have a Material Adverse Effect, the Company and its Subsidiaries are in compliance with all applicable Environmental Laws and have not received notice of any pending or threatened claim relating to any Environmental Laws or Hazardous Materials.
Section 5.15 Title to Assets. The Company and its Subsidiaries have good and marketable title to, or valid leasehold interests in, all real and personal property that is material to their business, in each case free and clear of all Liens other than Permitted Liens.
Section 5.16 Intellectual Property. The Company and its Subsidiaries own or possess adequate rights to use all material patents, trademarks, trade names, copyrights, trade secrets and other intellectual property necessary for the conduct of their business as currently conducted, except where the failure would not reasonably be expected to have a Material Adverse Effect.
Section 5.17 Taxes. The Company and each of its Subsidiaries have filed all material tax returns required to be filed and have paid all material taxes required to be paid, except for taxes being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP.
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Section 5.18 Investment Company. The Company is not, and immediately after receipt of payment for the Shares will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
Section 5.19 No Market Manipulation. The Company has not, and no Person acting on its behalf has, taken any action designed to or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of the Common Shares to facilitate the sale or resale of the Shares.
Section 5.20 Listing and Maintenance Requirements. The Common Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed on the Principal Market, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act or delisting the Common Shares from the Principal Market. Upon the closing of the Business Combination, the Common Shares will be listed for trading on the Nasdaq Stock Market, and the Company will be in compliance with, and will fully satisfy, all applicable initial listing and corporate governance requirements of the Nasdaq Stock Market necessary for the closing of the Business Combination.
Section 5.21 No Disqualification Events. No “Bad Actor” disqualifying event described in Rule 506(d)(1) (i)–(viii) under the Securities Act is applicable to the Company or, to the Company’s knowledge, any Person listed in the first paragraph of Rule 506(d)(1), except for a disqualifying event covered by Rule 506(d)(2) or (d)(3).
Section 5.22 Sanctions; Anti-Corruption. Neither the Company nor any of its Subsidiaries, nor, to the Company’s knowledge, any director, officer or employee thereof, is the subject of any Sanctions administered by OFAC or located, organized or resident in a Sanctioned Country, and the Company is in compliance in all material respects with the U.S. Foreign Corrupt Practices Act of 1977 and applicable anti-money-laundering laws.
Section 5.23 Acknowledgment Regarding Investor. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s-length purchaser with respect to the Transaction Documents and that the Investor is not acting as a financial advisor or fiduciary of the Company. The Company further acknowledges that the Investor has not made and does not make any representation or warranty with respect to the transactions contemplated by the Transaction Documents except as expressly set forth in Article IV.
Section 5.24 Former Shell Company Status. The Company was formerly a “shell company” (as defined in Rule 12b-2 under the Exchange Act) of the type described in Rule 144(i)(1) under the Securities Act. Upon the closing of the Business Combination, the Company will have filed with the SEC a Current Report on Form 8-K containing current “Form 10 information” (within the meaning of Rule 144(i)(3) under the Securities Act) reflecting the Company’s status as an entity that is no longer a shell company.
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Article VI. Indemnification
Section 6.01 Indemnification of Investor. In consideration of the Investor’s execution and delivery of the Transaction Documents and in addition to all of the Company’s other obligations hereunder, the Company shall defend, protect, indemnify and hold harmless the Investor and its Affiliates, and their respective directors, officers, members, managers, employees, agents and representatives (collectively, the “Investor Indemnitees”), from and against any and all losses, liabilities, obligations, claims, damages, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Indemnified Liabilities”) incurred by any Investor Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents, or (c) any cause of action, suit or claim brought or made against such Investor Indemnitee by a third party arising out of or relating to the execution, delivery, performance or enforcement of the Transaction Documents, other than, in each case, to the extent such Indemnified Liabilities result from the gross negligence, willful misconduct or fraud of an Investor Indemnitee or a material breach by the Investor of the Transaction Documents.
Section 6.02 Procedures. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding for which indemnification may be sought hereunder, such indemnified party shall notify the indemnifying party in writing; provided that the failure to so notify shall not relieve the indemnifying party of its obligations hereunder except to the extent it is actually and materially prejudiced thereby. The indemnifying party shall be entitled to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. No indemnifying party shall consent to entry of any judgment or enter into any settlement that does not include an unconditional release of the indemnified party from all liability in respect of such claim.
Article VII. Covenants of the Company
The Company covenants with the Investor that, for so long as this Agreement is in effect and during the Commitment Period:
Section 7.01 Registration Rights. The Company shall file an initial registration statement on Form S-1 covering the resale of the Shares issuable under this Agreement and the Common Shares underlying the Promissory Notes within thirty (30) calendar days following the closing of the Business Combination, and shall use commercially reasonable efforts to cause such Registration Statement to be declared effective by the SEC as promptly as practicable thereafter, all in accordance with the terms of the Registration Rights Agreement.
Section 7.02 Listing of Common Shares. The Company shall use commercially reasonable efforts to maintain the listing and trading of the Common Shares on the Principal Market and shall comply in all material respects with the Company’s reporting, filing and other obligations under the rules and regulations of the Principal Market. The Company shall promptly secure the listing of all Shares to be issued hereunder on the Principal Market.
Section 7.03 Filing of Current Report; Prospectus. The Company shall file with the SEC, within the time required under the Exchange Act, a Current Report on Form 8-K (or, if applicable, include in another periodic report) describing the material terms of the transactions contemplated by the Transaction Documents, and shall keep the applicable Registration Statement effective and the related Prospectus current and available for resales by the Investor in accordance with the Registration Rights Agreement.
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Section 7.04 Black Out Periods. Notwithstanding any other provision of this Agreement, during the Commitment Period the Company may, by written notice to the Investor, suspend the use of any Prospectus and the Investor’s ability to sell Common Shares thereunder for a reasonable period of time (a “Black Out Period”) if the Company determines in good faith that such suspension is necessary to comply with applicable securities laws or because the Company is in possession of material nonpublic information the disclosure of which would not be in the best interests of the Company; provided that any notice of a Black Out Period delivered pursuant to this Section 7.04 shall state only that the Company has suspended the use of the applicable Prospectus pursuant to this Section 7.04 and shall not disclose the nature, substance or existence of any specific material nonpublic information or otherwise contain information that would constitute material nonpublic information; provided that the Company shall not deliver an Advance Notice during a Black Out Period; provided, further, that the Company shall not impose (x) more than two (2) Black Out Periods in any period of twelve (12) consecutive months, (y) any single Black Out Period of more than twenty (20) consecutive Trading Days, or (z) Black Out Periods of more than forty-five (45) Trading Days in the aggregate in any period of twelve (12) consecutive months. The Company shall terminate any Black Out Period promptly after, and shall not continue any Black Out Period beyond the time at which, the material, nonpublic information giving rise thereto has been publicly disclosed (including by the filing of a Current Report on Form 8-K pursuant to Section 7.03) or otherwise ceases to be material or nonpublic. For the avoidance of doubt, any Black Out Period or Material Outside Event during which the Investor is unable to resell Common Shares under an effective Registration Statement shall constitute (and shall not cure, suspend or toll) a Registration Event (as defined in the Promissory Notes) to the extent provided in the Promissory Notes. The Investor acknowledges that a notice of a Black Out Period is being provided solely for purposes of suspending use of the applicable Prospectus and agrees that it will not request, and the Company shall have no obligation to disclose, the reason for or circumstances giving rise to any Black Out Period.
Section 7.05 Material Outside Event. If the Company determines in good faith that the delivery of an Advance Notice or the sale of Common Shares by the Investor would be inadvisable or impermissible because of applicable securities laws or circumstances involving material nonpublic information (a “Material Outside Event”), the Company may, in its good-faith discretion, notify the Investor solely that a Material Outside Event is continuing and shall not deliver any Advance Notice until such Material Outside Event is no longer continuing. Such notice shall not disclose the nature, substance or existence of any specific material nonpublic information or otherwise contain material nonpublic information.
Section 7.06 Use of Proceeds. The Company shall use the net proceeds from the sale of the Shares and the Pre-Paid Advance for working capital and general corporate purposes, and shall not use such proceeds (a) for the satisfaction of any portion of the Company’s debt other than (i) regularly scheduled payments of principal and interest, and payments of principal at stated maturity, in each case in respect of Indebtedness of the Company outstanding as of the date hereof and set forth on Schedule 7.06 (as in effect on the date hereof, without giving effect to any amendment, refinancing or increase thereof), in an aggregate amount not to exceed $5,000,000 in any twelve-month period, provided that no such payment shall constitute a voluntary or optional prepayment, redemption, repurchase or defeasance of any Indebtedness prior to its scheduled due date, and provided further that no such payment shall be made in respect of any Indebtedness owed to, or held by, any Affiliate, officer, director or 5% or greater shareholder of the Company, except for those specific indebtedness set forth on Schedule 7.06 as of the Business Combination Closing Date, and (ii) as permitted under the Transaction Documents, (b) for the redemption of any Common Shares or Common Share Equivalents, or (c) in violation of OFAC regulations or the U.S. Foreign Corrupt Practices Act of 1977.
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Section 7.07 Prohibition of Variable Rate Transactions. The Company shall not effect or enter into an agreement to effect any Variable Rate Transaction, other than (x) in connection with this Agreement and the Promissory Notes, and (y) any other financing transaction with the Investor or its Affiliates; provided that (i) the prohibition set forth in this Section 7.07 shall apply to any Variable Rate Transaction described in clause (ii) or clause (iii) of the definition thereof from the date hereof through the end of the Commitment Period, and (ii) the prohibition set forth in this Section 7.07 shall apply to any Variable Rate Transaction described in clause (i) of the definition thereof from the date hereof until such time as no Promissory Note remains outstanding. The Investor shall be entitled to obtain injunctive relief against the Company to preclude any such Variable Rate Transaction, which remedy shall be in addition to any right to collect damages. For the avoidance of doubt, none of the Forward Purchase Confirmation, the Subscription Agreement, dated as of September 2, 2026, between the Company and the Investor (including any Replacement Subscription thereunder), the Promissory Notes, nor the Collateral Shares arrangements contemplated by the Promissory Notes shall constitute a Variable Rate Transaction or a breach of this Section 7.07.
Section 7.08 Right of First Refusal. For the period commencing on the date of execution of the Term Sheet and ending on the date that is six (6) months after the earlier of (i) the termination of this Agreement and (ii) the expiration of the Commitment Period, the Investor shall have the right, but not the obligation, exercisable in its sole discretion, to invest in up to thirty-three percent (33%) of any Covered Financing, on the same terms and conditions offered to any other investor or lender in such Covered Financing. The Company shall provide the Investor with written notice of each proposed Covered Financing, including the material terms and conditions thereof, not less than ten (10) Business Days prior to the consummation of such Covered Financing, and the Investor may exercise its rights under this Section 7.08 by delivery of written notice to the Company within seven (7) Business Days following the date of receipt of such notice from the Company.
Section 7.09 Reservation of Shares. The Company shall at all times reserve and keep available out of its authorized and unissued Common Shares, solely for the purpose of effecting the issuance of Shares hereunder and upon conversion of the Promissory Notes, such number of Common Shares as shall be sufficient to effect such issuances. In no event shall the number of Common Shares so reserved be less than 300% of the maximum number of Common Shares issuable upon conversion of all then-outstanding Promissory Notes and in respect of all Advances, in each case calculated assuming conversion or issuance at the Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) then in effect.
Section 7.10 Exchange Act Reporting; Rule 144 Current Public Information. For so long as any Promissory Note remains outstanding or the Investor holds any Shares, the Company shall (i) remain subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, (ii) timely file (or obtain valid extensions in respect of and file within the applicable grace period) all reports required to be filed by the Company pursuant to the Exchange Act, and (iii) at all times satisfy the current public information requirements of Rule 144(c) under the Securities Act, in each case so that Rule 144 under the Securities Act shall become available, and shall remain available, for the resale of Common Shares by the Investor in accordance with Rule 144(i)(2) under the Securities Act from and after the date that is twelve (12) months following the filing by the Company of the “Form 10 information” described in Section 5.24.
Section 7.11 Stockholder Approval. Upon the occurrence of an Exchange Cap Event (as defined in the Promissory Note), or upon the written request of the Investor at any time when the number of Common Shares remaining available for issuance under the Exchange Cap is less than the threshold contemplated by Section 3(d)(ii) of the Promissory Note, the Company shall, as promptly as practicable and in any event within ninety (90) days thereafter, call and hold a meeting of its stockholders for the purpose of seeking the approval of its stockholders, in accordance with the applicable rules of the Principal Market, of the issuance of Common Shares pursuant to this Agreement and the Promissory Notes in excess of the Exchange Cap. In connection with such meeting, the board of directors of the Company shall recommend that the stockholders vote in favor of such approval, and the Company shall solicit proxies from its stockholders in connection therewith in the same manner as all other management proposals presented at such meeting.
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Section 7.12 DTC Eligibility. The Company shall take all action necessary to ensure that the Common Shares remain eligible for clearance and settlement through the facilities of the Depository Trust Company (“DTC”), and that the Company’s transfer agent participates in the DTC Fast Automated Securities Transfer (FAST) Program and accepts instructions through DTC’s Deposit/Withdrawal at Custodian (DWAC) system. The Company shall not take any action, or fail to take any action, that would reasonably be expected to result in the imposition by DTC of any “chill,” “freeze,” suspension or other restriction on the acceptance of additional deposits of, or on transfers of, the Common Shares.
Section 7.13 Publicity; Review of Disclosure. The Company shall (i) provide the Investor and its counsel a reasonable opportunity to review and comment upon (A) the Current Report on Form 8-K described in Section 7.03 announcing the transactions contemplated by the Transaction Documents, (B) any press release or other public announcement naming the Investor or any of its Affiliates, and (C) the Plan of Distribution and the selling stockholder disclosure contained in each Registration Statement, in each case prior to the filing, issuance, release or use thereof, and shall consider any such comments in good faith, and (ii) not identify the Investor or any of its Affiliates by name in any other public disclosure without the prior written consent of the Investor, except as and to the extent such disclosure is required by applicable law or regulation or the rules of the SEC or the Principal Market, in which case the Company shall, to the extent legally permissible, provide the Investor with prior written notice of such disclosure.
Article VIII. Conditions to the Investor’s Obligations
The obligations of the Investor to fund the Pre-Paid Advance are subject to the conditions precedent set forth in Annex II, and the right of the Company to deliver an Advance Notice and the obligations of the Investor with respect to any Advance are subject to the conditions precedent set forth in Annex III. Such conditions are for the Investor’s sole benefit and may be waived by the Investor at any time in its sole discretion by written notice to the Company.
Article IX. Governing Law; Jurisdiction
Section 9.01 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to the principles of conflicts of law thereof that would result in the application of the laws of any other jurisdiction.
Section 9.02 Jurisdiction; Venue. Each Party irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith, and irrevocably waives, and agrees not to assert, any claim that it is not personally subject to the jurisdiction of any such court or that such suit, action or proceeding is brought in an inconvenient forum or that the venue thereof is improper.
Section 9.03 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
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Article X. Termination
Section 10.01 Termination.
| (a) | Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earlier of (i) the date of the expiration of the Commitment Period (as defined in Annex I); provided that if any Promissory Notes are then outstanding, such termination shall be delayed until such date that all Promissory Notes that were outstanding have been repaid, or (ii) the date on which the Investor shall have made payment of Advances pursuant to this Agreement for Common Shares equal to the Commitment Amount. |
| (b) | This Agreement may be terminated at any time by the mutual written consent of the Parties. |
| (c) | Nothing in this Section 10.01 shall be deemed to release the Company or the Investor from any liability for any breach under this Agreement prior to the valid termination hereof, or to impair the rights of the Company and the Investor to compel specific performance by the other Party of its obligations under this Agreement prior to the valid termination hereof. The indemnification provisions contained in Article VI shall survive the termination of this Agreement. |
Article XI. Notices
Other than with respect to Advance Notices, which must be in writing delivered in accordance with Section 3.01 and will be deemed delivered on the day set forth in Section 3.01(c), any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by e-mail if sent on a Trading Day, or, if not sent on a Trading Day, on the immediately following Trading Day; (iii) five (5) days after being sent by U.S. certified mail, return receipt requested; or (iv) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same. The addresses for such communications shall be:
If to the Company, prior to the closing of the Business Combination, to:
Ribbon Acquisition Corp.
Central Park Tower LaTour Shinjuku Room 3001
6-15-1 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023 Japan
Attention: Angshuman (Bubai) Ghosh
E-mail: [email protected]
with a copy (which shall not constitute notice or delivery of process) to:
Celine & Partners PLLC
1185 6th Avenue, Suite 304, New York, NY 10036
Attention: Cassi Olson, Esq.
E-mail: [email protected]
If to the Company, following the closing of the Business Combination, to:
DRC Medicine Inc.
9 East Loockerman St., Suite 311, Dover, Kent, Delaware 19901
Attention: Narumi Okazaki
E-mail: [email protected]
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with a copy to:
DRC Medicine Ltd.
Shinjuku i-Land Tower 4F
6-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo, 163-1304, Japan
Attention: Akira Okada
E-mail: [email protected]
with a copy (which shall not constitute notice or delivery of process) to:
Woodbridge International Consulting Ltd.
9F, No. 73, Lequn 3rd. Rd., Taipei 104, Taiwan
Attention: Lawrence Ong
E-mail: [email protected]
If to the Target, to:
DRC Medicine Ltd.
Shinjuku i-Land Tower 4F
6-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo, 163-1304, Japan Attention: Narumi Okazaki
E-mail: [email protected]
Attention: Akira Okada
E-mail: [email protected]
If to the Investor, to:
Meteora Capital, LLC
1200 N Federal Hwy, Suite 200, Boca Raton, FL 33432
Attention: Vikas Mittal, Managing Member
E-mail: [email protected]
or at such other address and/or e-mail and/or to the attention of such other person as the recipient Party has specified by written notice given to each other Party three (3) Business Days prior to the effectiveness of such change.
Article XII. Miscellaneous
Section 12.01 Counterparts. This Agreement may be executed in identical counterparts, each of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered to the other Party. Facsimile or other electronically scanned and delivered signatures (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, the Uniform Electronic Transactions Act, or other applicable law) shall be deemed to have been duly and validly delivered and be valid as originals and effective for all purposes of this Agreement.
Section 12.02 Entire Agreement; Amendments. This Agreement and the other Transaction Documents contain the entire understanding of the Parties with respect to the matters covered herein and therein and supersede all prior oral or written agreements with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the Parties to this Agreement.
Section 12.03 Reporting Entity for Common Shares. The reporting entity relied upon for the determination of the trading price or trading volume of the Common Shares on any given Trading Day for the purposes of this Agreement shall be Bloomberg L.P. or any successor thereto. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.
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Section 12.04 Commitment Fee; Expenses. As consideration for the Investor’s commitment under this Agreement, the Company shall pay the Investor a commitment fee equal to 1.75% of the Maximum Commitment Amount (the “Commitment Fee”), payable in two equal installments as follows: (i) 0.875% of the Maximum Commitment Amount (the “First Installment”) shall be earned and payable upon the effectiveness of the initial Registration Statement; and (ii) 0.875% of the Maximum Commitment Amount (the “Second Installment”) shall be earned and payable on the date that is ninety (90) days following such effectiveness. At the Company’s election, each installment shall be paid in the form of either cash or Common Shares (any such shares, the “Commitment Shares”) valued based on the closing price of the Common Shares on the Principal Market on the applicable payment date. Any Commitment Shares issued in satisfaction of the Commitment Fee shall be included in the applicable Registration Statement. Except as set forth in this Section 12.04, each of the Parties shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such Party) in connection with this Agreement and the transactions contemplated hereby; provided that the Company shall reimburse the Investor for the reasonable and documented expenses actually incurred by the Investor in connection with the drafting and negotiation of the definitive documentation governing the transactions contemplated hereby, in an amount not to exceed $80,000, which amount shall be payable, at the Company’s election, either (i) in cash at the closing of the Business Combination, which amount may be netted against any amounts otherwise fundable by the Investor to the Company at such closing, or (ii) by capitalization into the outstanding principal face amount of the Promissory Note designated DRCM-1 in an amount equal to one hundred fifty percent (150%) of the amount then owed; provided that any portion of such amount not paid in cash at the closing of the Business Combination shall be deemed capitalized pursuant to clause (ii); provided, further, that amounts reimbursed pursuant to this Section 12.04 and pursuant to the provision of the Forward Purchase Confirmation captioned “Reimbursement of Legal Fees and Other Expenses” shall be without duplication.
Section 12.05 Brokerage. Each of the Parties hereto represents that it has had no dealings in connection with this transaction with any finder or broker who will demand payment of any fee or commission from the other Party. The Company, on the one hand, and the Investor, on the other hand, agree to indemnify the other against and hold the other harmless from any and all liabilities to any person claiming brokerage commissions or finder’s fees on account of services purported to have been rendered on behalf of the indemnifying Party in connection with this Agreement or the transactions contemplated hereby.
Section 12.06 Assignment. Neither this Agreement nor any rights or obligations of the Company hereunder may be assigned or delegated by the Company to any other Person without the prior written consent of the Investor; provided that the substitution of PubCo for RIBB as the Company, pursuant to the Joinder and effective upon the closing of the Business Combination, shall not constitute an assignment or delegation by the Company requiring the consent of the Investor. The Investor may, without the consent of the Company, assign or transfer its rights and obligations under this Agreement and the other Transaction Documents, in whole or in part, to one or more of its Affiliates or to one or more funds or accounts managed or advised by the Investor or its Affiliates, upon written notice to the Company, including, without limitation, by designating one or more such Persons to fund and hold all or any portion of the Pre-Paid Advance and the related Promissory Notes at the Pre-Advance Closing; provided that no such assignment shall relieve the Investor of its obligations hereunder to the extent such obligations are not assumed by such assignee. The Investor may also assign, transfer or novate this Agreement and its rights and obligations hereunder, in whole or in part, to any other Person only with the prior written consent of the Company, provided that any such permitted assignee agrees in writing to be bound by the terms of this Agreement to the extent of such assignment.
Section 12.07 Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the remaining provisions of this Agreement shall remain in full force and effect.
Section 12.08 Survival. The representations, warranties, covenants and agreements of the Parties contained in this Agreement shall survive each Closing and the termination of this Agreement; provided that the survival of the indemnification provisions contained in Article VI shall be governed by Section 10.01(c).
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IN WITNESS WHEREOF, the Parties hereto have caused this Standby Equity Purchase Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.
| COMPANY: | ||
| RIBBON ACQUISITION CORP. | ||
| By: | ||
| Name: | Angshuman (Bubai) Ghosh | |
| Title: | Chairman and Chief Executive Officer | |
| TARGET: | ||
| DRC MEDICINE LTD. | ||
| By: | ||
| Name: | Narumi Okazaki | |
| Title: | President | |
| INVESTOR: | ||
| METEORA SELECT TRADING OPPORTUNITIES MASTER, LP | ||
| By: | ||
| Name: | Vikas Mittal | |
| Title: | CIO/Managing Member of GP | |
JOINDER OF PUBCO
DRC Medicine Inc., a Delaware corporation (“PubCo”), hereby joins in and executes this Agreement solely to acknowledge and agree that, effective upon the closing of the Business Combination, PubCo shall become, and shall be substituted for Ribbon Acquisition Corp. as, the “Company” under this Agreement, and shall assume and be bound by all of the rights, obligations and liabilities of the Company hereunder in accordance with its terms.
| DRC MEDICINE INC. | ||
| By: | ||
| Name: | Narumi Okazaki | |
| Title: | Director | |
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ANNEX I TO THE
STANDBY EQUITY PURCHASE AGREEMENT DEFINITIONS
“Additional Shares” shall have the meaning set forth in Section 3.03.
“Adjusted Advance Amount” shall have the meaning set forth in Section 3.03.
“Advance” shall mean any issuance and sale of Advance Shares by the Company to the Investor pursuant to this Agreement.
“Advance Date” shall mean the first Trading Day after expiration of the applicable Pricing Period for each Advance.
“Advance Notice” shall mean a written notice in the form of Exhibit C attached hereto to the Investor executed by an officer of the Company and setting forth the number of Advance Shares that the Company desires to issue and sell to the Investor.
“Advance Notice Date” shall mean each date the Company is deemed to have delivered (in accordance with Section 3.01(c) of this Agreement) an Advance Notice to the Investor, subject to the terms of this Agreement.
“Advance Shares” shall mean the Common Shares that the Company shall issue and sell to the Investor pursuant to the terms of this Agreement.
“Affiliate” shall have the meaning set forth in Section 4.07.
“Agreement” shall have the meaning set forth in the preamble of this Agreement.
“Amortization Event” shall have the meaning set forth in the Promissory Note.
“Applicable Laws” shall mean all applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls, including the United States Foreign Corrupt Practices Act of 1977, and (iii) any Sanctions laws.
“Black Out Period” shall have the meaning set forth in Section 7.04.
“Business Combination” shall mean the business combination involving Ribbon Acquisition Corp. (“RIBB”), DRC Medicine Inc. (“PubCo”), DRC Merger Inc. and DRC Medicine Ltd. pursuant to the Business Combination Agreement (including the Share Exchange, the Domestication and the Merger), pursuant to which PubCo will become the publicly traded company whose Common Shares are listed on the Principal Market.
“Business Combination Agreement” shall mean that certain business combination agreement, dated as of June 30, 2025, by and among Ribbon Acquisition Corp., DRC Medicine Inc., DRC Merger Inc. and DRC Medicine Ltd. providing for the Business Combination, as the same may be amended, restated, supplemented or otherwise modified from time to time.
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“Business Day” shall mean any day other than a Saturday, a Sunday or another day on which commercial banks in The City of New York are authorized or required by law to remain closed.
“Closing” shall have the meaning set forth in Section 3.05.
“Commitment Amount” shall mean $100,000,000 of Common Shares (the “Maximum Commitment Amount”).
“Commitment Fee” shall have the meaning set forth in Section 12.04.
“Commitment Period” shall mean the period commencing on the Effective Date and ending on the date that is thirty-six (36) months following the Effective Date, as such period may be extended by up to twenty-four (24) months upon the mutual written agreement of the Company and the Investor; provided that the Commitment Period shall end upon any earlier termination of this Agreement in accordance with Section 10.01.
“Commitment Shares” shall have the meaning set forth in Section 12.04.
“Common Share Equivalents” shall mean any securities of the Company which entitle the holder thereof to acquire at any time Common Shares, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Shares.
“Common Shares” shall have the meaning set forth in the recitals of this Agreement.
“Company” shall have the meaning set forth in the preamble of this Agreement.
“Condition Satisfaction Date” shall have the meaning set forth in Annex III.
“Conversion Price” shall have the meaning set forth in the Promissory Note.
“Covered Financing” shall mean any future debt, equity, derivative or other financing of the Company, as referenced in Section 7.08.
“Daily Traded Amount” shall mean the daily trading volume of the Company’s Common Shares on the Principal Market during regular trading hours as reported by Bloomberg L.P.
“Disclosure Schedules” shall have the meaning set forth in Article V.
“Effective Date” shall mean the date of the closing of the Business Combination. For the avoidance of doubt, this Agreement shall be executed and delivered, and shall be binding on the Parties, on the date hereof, and the obligations of the Parties under Article II and Article III (including the Pre-Advance Closing and the delivery of Advance Notices and Investor Notices) shall commence on the Effective Date.
“Environmental Laws” shall mean all applicable federal, state and local laws relating to pollution or protection of the environment or human health and safety.
“Event of Default” shall have the meaning set forth in the Promissory Note.
“Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Cap” shall have the meaning set forth in Section 3.02(c).
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“Exchange Cap Event” shall have the meaning set forth in the Promissory Note.
“Excluded Day” shall have the meaning set forth in Section 3.03.
“Fixed Price” shall have the meaning set forth in the Promissory Note.
“Floor Price” shall have the meaning set forth in each Promissory Note.
“GAAP” shall mean United States generally accepted accounting principles, consistently applied.
“Hazardous Materials” shall mean any substance regulated as hazardous, toxic or a pollutant under applicable Environmental Laws.
“Indemnified Liabilities” shall have the meaning set forth in Section 6.01.
“Investor” shall have the meaning set forth in the preamble of this Agreement.
“Investor Indemnitees” shall have the meaning set forth in Section 6.01.
“Investor Notice” shall have the meaning set forth in Section 3.01(b).
“Lien” shall mean any mortgage, pledge, lien, charge, hypothecation, security interest, encumbrance, adverse right, interest or claim, option, right of first refusal or offer or similar restriction, or other attribute of ownership.
“Market Price” shall mean an Option 1 Market Price or Option 2 Market Price, as applicable.
“Material Adverse Effect” shall mean any event, occurrence or condition that has had or would reasonably be expected to have (i) a material adverse effect on the legality, validity or enforceability of this Agreement or the transactions contemplated herein, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement.
“Material Agreement” shall mean any agreement that is required to be filed as a material contract by the Company pursuant to Item 601 of Regulation S-K (or any successor provision).
“Material Outside Event” shall have the meaning set forth in Section 7.05.
“Maximum Advance Amount” shall mean an amount equal to one hundred percent (100%) of the average of the Daily Traded Amount during the five (5) consecutive Trading Days immediately preceding an Advance Notice, which amount shall not exceed the limitations set forth in Section 3.02 of this Agreement.
“Maximum Commitment Amount” shall have the meaning set forth in the definition of Commitment Amount.
“Minimum Acceptable Price” shall mean the minimum price notified by the Company to the Investor in each Advance Notice, if applicable.
“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.
“Option 1 Market Price” shall mean the VWAP of the Common Shares during the Option 1 Pricing Period.
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“Option 2 Market Price” shall mean the lowest daily VWAP of the Common Shares during the Option 2 Pricing Period.
“Option 1 Pricing Period” shall mean the period on the applicable Advance Notice Date with respect to an Advance Notice selecting an Option 1 Pricing Period commencing at such time on such date that the Company receives written confirmation (which may be by e-mail) of receipt of such Advance Notice by the Investor, and which confirmation shall specify such commencement time, and ending at 4:00 p.m. New York City time on the same Trading Day (unless otherwise agreed by the Parties); provided, however, if the Company delivers the Advance Notice prior to the commencement of trading on the Principal Market, the Option 1 Pricing Period shall commence at the opening time of trading on the Principal Market on such date.
“Option 2 Pricing Period” shall mean the three (3) consecutive Trading Days commencing on the Advance Notice Date.
“Ownership Limitation” shall have the meaning set forth in Section 3.02(a).
“Party” shall have the meaning set forth in the preamble of this Agreement.
“Payment Premium” shall have the meaning set forth in the Promissory Note.
“Permitted Liens” shall mean (i) any security interest granted to the Investor, (ii) inchoate Liens for taxes, assessments or governmental charges not yet due or being contested in good faith for which adequate reserves have been established, (iii) Liens of carriers, materialmen, warehousemen, mechanics and landlords arising in the ordinary course of business, and (iv) other Liens disclosed in the Disclosure Schedules or arising in the ordinary course of business that do not, individually or in the aggregate, materially detract from the value of the affected assets.
“Person” shall mean an individual, a corporation, a partnership, a limited liability company, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Plan of Distribution” shall mean the section of a Registration Statement disclosing the plan of distribution of the Shares.
“Pre-Advance Closing” shall have the meaning set forth in Section 2.01.
“Pre-Paid Advance” shall have the meaning set forth in Section 2.01.
“Pricing Period” shall mean the Option 1 Pricing Period or Option 2 Pricing Period, as applicable.
“Principal Market” shall mean the Nasdaq Stock Market; provided, however, that in the event the Common Shares are ever listed or traded on the New York Stock Exchange or the NYSE American, the “Principal Market” shall mean such other market or exchange on which the Common Shares are then listed or traded to the extent such other market or exchange is the principal trading market or exchange for the Common Shares.
“Promissory Note” shall have the meaning set forth in Section 2.01.
“Prospectus” shall mean any prospectus (including all amendments and supplements thereto) used by the Company in connection with a Registration Statement, including documents incorporated by reference therein.
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“Purchase Price” shall mean the price per Advance Share obtained by multiplying the Market Price by 97%.
“Registrable Securities” shall have the meaning set forth in the Registration Rights Agreement.
“Registration Event” shall have the meaning set forth in the Promissory Note.
“Registration Limitation” shall have the meaning set forth in Section 3.02(b).
“Registration Statement” shall have the meaning set forth in the Registration Rights Agreement.
“Regulation D” shall mean the provisions of Regulation D promulgated under the Securities Act.
“Sanctioned Country” shall mean any country or territory that is itself the subject or target of comprehensive Sanctions.
“Sanctions” shall mean economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by OFAC or any other relevant sanctions authority.
“SEC” shall mean the U.S. Securities and Exchange Commission.
“SEC Documents” shall have the meaning set forth in Section 5.06.
“Securities Act” shall have the meaning set forth in the recitals of this Agreement.
“Settlement Document” in respect of an Advance Notice delivered by the Company, shall mean a settlement document in the form set out on Exhibit D.
“Shares” shall mean the Commitment Shares (if any) and the Common Shares to be issued from time to time hereunder pursuant to an Advance.
“Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.
“Subsidiaries” shall mean any Person in which the Company, directly or indirectly, (x) owns a majority of the outstanding capital stock or holds a majority of the equity or similar interest of such Person or (y) controls or operates all or substantially all of the business, operations or administration of such Person.
“Term Sheet” shall mean that certain term sheet by and among the Investor, Ribbon Acquisition Corp. and the Company, executed on May 20–21, 2026, setting forth the principal terms of the transactions contemplated by this Agreement and the other Transaction Documents.
“Trading Day” shall mean any day during which the Principal Market shall be open for business.
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“Transaction Documents” shall mean, collectively, this Agreement, the Registration Rights Agreement, any Promissory Notes issued by the Company hereunder, and each of the other agreements and instruments entered into or delivered by any of the Parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
“Variable Rate Transaction” shall mean a transaction in which the Company (i) issues or sells any Common Shares or Common Share Equivalents that are convertible into, exchangeable or exercisable for, or include the right to receive additional Common Shares either (A) at a conversion price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Shares at any time after the initial issuance of Common Shares or Common Share Equivalents, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date or upon the occurrence of specified or contingent events (including any “full ratchet” or “weighted average” anti-dilution provisions, but not including standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), (ii) enters into, or effects a transaction under, any agreement, including an “equity line of credit” or similar continuous offering of Common Shares or Common Share Equivalents (other than this Agreement), or (iii) enters into or effects any forward purchase agreement, equity pre-paid forward transaction or other similar offering where the Company receives proceeds based on a price or value that varies with the trading prices of the Common Shares.
“Volume Threshold” shall mean a number of Common Shares equal to the quotient of (a) the number of Advance Shares requested by the Company in an Advance Notice divided by (b) the Volume Threshold Percentage.
“Volume Threshold Percentage” shall mean thirty percent (30%).
“VWAP” shall mean, for any Trading Day or specified period, the daily volume weighted average price of the Common Shares for such Trading Day on the Principal Market during regular trading hours, or such specified period, as reported by Bloomberg L.P. through its “AQR” function. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
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ANNEX II TO THE
STANDBY EQUITY PURCHASE AGREEMENT
CONDITIONS PRECEDENT TO THE INVESTOR’S OBLIGATION TO FUND A PRE-PAID ADVANCE
The obligation of the Investor to advance to the Company a particular tranche of the Pre-Paid Advance hereunder at the Pre-Advance Closing is subject to the satisfaction, as of the date of such Pre-Advance Closing, of each of the following conditions, provided that these conditions are for the Investor’s sole benefit and may be waived by the Investor at any time in its sole discretion by providing the Company with prior written notice signed by the Investor thereof:
| (a) | The Company shall have duly executed and delivered to the Investor each of the Transaction Documents to which it is a party, and the Company shall have duly executed and delivered to the Investor a Promissory Note with a principal amount corresponding to the amount of the applicable tranche of the Pre-Paid Advance (before any deductions made thereto). |
| (b) | The Company shall have delivered to the Investor a compliance certificate executed by the chief executive officer of the Company certifying that the Company has complied with all of the conditions precedent to the Pre-Advance Closing set forth herein. |
| (c) | The Investor shall have received an opinion of counsel to the Company, dated on or before the Pre-Advance Closing date, in form and substance reasonably acceptable to the Investor. |
| (d) | The Investor shall have received a closing statement in a form to be agreed by the Parties, duly executed by an officer of the Company, setting forth wire transfer instructions of the Company and the amount to be paid by the Investor, which shall be the full principal amount of such tranche of the Pre-Paid Advance less a 17.5% original issue discount, and any other deductions that may be agreed by the Parties. |
| (e) | The Company shall have delivered to the Investor certified copies of its and each of its Subsidiaries’ charter or certificate of incorporation, bylaws or operating agreement and any other material organizational documents, and a certificate evidencing the incorporation and good standing of the Company in the State of Delaware as of a date within ten (10) days of the Pre-Advance Closing. |
| (f) | (I) The board of directors of the Company shall have approved the transactions contemplated by the Transaction Documents, (II) said approval shall not have been amended, rescinded or modified and shall remain in full force and effect, and (III) a true, correct and complete copy of such resolutions duly adopted by the board of directors of the Company shall have been provided to the Investor. |
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| (g) | Each and every representation and warranty of the Company shall be true and correct in all material respects (other than representations and warranties qualified by materiality, which shall be true and correct in all respects) as of the date when made and as of the date of the Pre-Advance Closing, and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Pre-Advance Closing. |
| (h) | No Suspension of Trading in or Delisting of Common Shares. (I) Trading in the Common Shares shall not have been suspended by the SEC, the Principal Market or FINRA, (II) the Company shall not have received any notice that the listing or quotation of the Common Shares on the Principal Market shall be terminated, and (III) the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Shares is being imposed or is contemplated. |
| (i) | The Company shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the sale of the Common Shares, and no statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents. |
| (j) | Since the date of execution of this Agreement, no event or series of events shall have occurred that has resulted in or would reasonably be expected to result in a Material Adverse Effect or an Event of Default, and no material breach of this Agreement or any Transaction Document shall have occurred. |
| (k) | The Company shall have notified the Principal Market of the issuance of all of the Shares hereunder and the maximum number of Common Shares issuable pursuant to the Promissory Note to be issued at the Pre-Advance Closing, and shall have delivered to the Investor such other documents, instruments or certificates relating to the transactions contemplated by this Agreement as the Investor or its counsel may reasonably request. |
| (l) | The Business Combination shall have been consummated, substantially on the terms described in the Business Combination Agreement, prior to or concurrently with the Pre-Advance Closing, and the Common Shares (including the Shares and the Common Shares issuable upon conversion of the Promissory Notes) shall have been approved for listing on the Principal Market, subject to official notice of issuance. |
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ANNEX III TO THE
STANDBY EQUITY PURCHASE AGREEMENT
CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER AN ADVANCE NOTICE
The right of the Company to deliver an Advance Notice and the obligations of the Investor hereunder with respect to an Advance are subject to the satisfaction or waiver (by the Investor pursuant to prior written notice signed by the Investor to the Company thereof), on each Advance Notice Date (a “Condition Satisfaction Date”), of each of the following conditions:
| (a) | Accuracy of the Company’s Representations and Warranties. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Advance Notice Date, except to the extent such representations and warranties are as of another date, in which case they shall be true and correct as of such other date. |
| (b) | Commitment Fee. The Company shall have paid or issued, as applicable, each then-due installment of the Commitment Fee in accordance with Section 12.04. |
| (c) | Registration of the Common Shares with the SEC. There shall be an effective Registration Statement pursuant to which the Investor is permitted to utilize the prospectus thereunder to resell all of the Common Shares issuable pursuant to such Advance Notice, and the Company shall have filed with the SEC in a timely manner all reports, notices and other documents required under the Exchange Act during the twelve-month period immediately preceding the applicable Condition Satisfaction Date. |
| (d) | Authority. The Company shall have obtained all permits and qualifications required by any applicable state for the offer and sale of all the Common Shares issuable pursuant to such Advance Notice, or shall have the availability of exemptions therefrom, and the sale and issuance of such Common Shares shall be legally permitted by all laws and regulations to which the Company is subject. |
| (e) | Board Authorization. The board of directors of the Company shall have approved the transactions contemplated by the Transaction Documents, and such approval shall remain in full force and effect. |
| (f) | No Material Outside Event. No Material Outside Event shall have occurred and be continuing. |
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| (g) | Performance by the Company. The Company shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the applicable Condition Satisfaction Date. |
| (h) | No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or materially and adversely affects any of the transactions contemplated by the Transaction Documents. |
| (i) | No Suspension of Trading in or Delisting of Common Shares. (I) Trading in the Common Shares shall not have been suspended by the SEC, the Principal Market or FINRA, (II) the Company shall not have received any notice that the listing or quotation of the Common Shares on the Principal Market shall be terminated, and (III) the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Shares is being imposed or is contemplated. |
| (j) | Authorized Shares. All of the Common Shares issuable pursuant to the applicable Advance Notice shall have been duly authorized by all necessary corporate action of the Company, and all Common Shares relating to all prior Advance Notices required to have been received by the Investor under this Agreement shall have been delivered to the Investor in accordance with this Agreement. |
| (k) | Executed Advance Notice. The representations contained in the applicable Advance Notice shall be true and correct in all material respects as of the applicable Condition Satisfaction Date. |
| (l) | No Event of Default. No Event of Default (as defined in any Promissory Note), and no event that with the passage of time or the giving of notice, or both, would constitute an Event of Default, shall have occurred and be continuing as of the applicable Condition Satisfaction Date. |
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
See attached.
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EXHIBIT B
FORM OF CONVERTIBLE PROMISSORY NOTE
See attached.
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EXHIBIT C
ADVANCE NOTICE
| Dated: __________ | Advance Notice Number: ____ |
The undersigned, _______________________, hereby certifies, with respect to the sale of Common Shares of DRC MEDICINE INC. (the “Company”) issuable in connection with this Advance Notice, delivered pursuant to that certain Standby Equity Purchase Agreement, dated as of September 2, 2026 (the “Agreement”), as follows (with capitalized terms used herein without definition having the same meanings as given to them in the Agreement):
| 1. | The undersigned is the duly elected __________ of the Company. |
| 2. | There are no fundamental changes to the information set forth in the Registration Statement which would require the Company to file a post-effective amendment to the Registration Statement. |
| 3. | The Company has performed in all material respects all covenants and agreements to be performed by the Company contained in the Agreement on or prior to the Advance Notice Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof. No Event of Default (as defined in any Promissory Note) has occurred and is continuing as of the date hereof. |
| 4. | The number of Advance Shares the Company is requesting is _______________. |
| 5. | The Pricing Period for this Advance shall be an [Option 1 Pricing Period] / [Option 2 Pricing Period]. |
| 6. | (For an Option 1 Pricing Period add:) The Volume Threshold for this Advance shall be ______. (For an Option 2 Pricing Period add:) The Minimum Acceptable Price with respect to this Advance Notice is ________ (if left blank then no Minimum Acceptable Price will be applicable to this Advance). |
| 7. | The number of Common Shares of the Company outstanding as of the date hereof is ________. |
The undersigned has executed this Advance Notice as of the date first set forth above.
| DRC MEDICINE INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
Please deliver this Advance Notice by e-mail to: [email protected]
Attention: Trading Department
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EXHIBIT D
SETTLEMENT DOCUMENT
VIA E-MAIL
DRC Medicine Inc.
Attn: Narumi Okazaki
E-mail: [email protected], with a copy to [email protected]
Below please find the settlement information with respect to the Advance Notice Date of: _________
| 1.a. | Number of Common Shares requested in the Advance Notice | |
| 1.b. | Volume Threshold (Number of Common Shares in (1) divided by the Volume Threshold Percentage) | |
| 1.c. | Number of Common Shares traded during Pricing Period | |
| 2. | Minimum Acceptable Price for this Advance (if any) | |
| 3. | Number of Excluded Days (if any) | |
| 4. | Adjusted Advance Amount (if applicable) (including pursuant to Volume Threshold adjustment) | |
| 5. | Option [1] / [2] Market Price | |
| 6. | Purchase Price per share (Market Price × 97%) | |
| 7. | Number of Advance Shares due to the Investor | |
| 8. | Total Purchase Price due to Company (row 6 × row 7) | |
| 9. | Number of Additional Shares to be issued to the Investor (if any Excluded Days) | |
| 10. | Additional amount to be paid to the Company by the Investor (row 9 × Minimum Acceptable Price × 95%) | |
| 11. | Total Amount to be paid to the Company (row 8 + row 10) | |
| 12. | Total Advance Shares to be issued to the Investor (row 7 + row 9) |
If this Settlement Document relates to an Advance effected pursuant to Section 3.01(a)(iii) of the Agreement or pursuant to an Investor Notice delivered under Section 3.01(b) of the Agreement, the Total Amount set forth in row 11 shall not be paid in cash and shall instead be applied as an offset against amounts outstanding under the applicable Promissory Note in accordance with Section 3.01(a)(iii) or Section 3.01(b) of the Agreement, as applicable, and the Purchase Price per share set forth in row 6 shall be the Conversion Price (as defined in the Promissory Note) in effect on the applicable Advance Notice Date or Investor Notice delivery date.
Please issue the number of Advance Shares due to the Investor to the account of the Investor in accordance with the delivery instructions provided separately by the Investor.
Sincerely,
METEORA SELECT TRADING OPPORTUNITIES MASTER, LP
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Agreed and approved by:
| DRC MEDICINE INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
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EXHIBIT E
INVESTOR NOTICE
| Dated: __________ | Investor Notice Number: ____ |
Reference is made to that certain Standby Equity Purchase Agreement, dated as of September 2, 2026 (the “Agreement”), by and between DRC MEDICINE INC. (the “Company”) and METEORA SELECT TRADING OPPORTUNITIES MASTER, LP (the “Investor”). Capitalized terms used herein without definition have the same meanings as given to them in the Agreement.
Pursuant to Section 3.01(b) of the Agreement, the undersigned Investor hereby delivers this Investor Notice and requires the Company to issue and sell to the Investor the number of Advance Shares set forth below, at a purchase price per Share equal to the Conversion Price (as defined in the Promissory Note) in effect on the date hereof, with the aggregate purchase price therefor to be applied as an offset against amounts outstanding under the applicable Promissory Note in accordance with Section 3.01(b) of the Agreement.
| 1. | Number of Advance Shares to be issued and sold to the Investor: _____________. |
| 2. | Conversion Price in effect on the date hereof: _____________. |
| 3. | Aggregate purchase price to be applied as an offset against the applicable Promissory Note (row 1 × row 2): ____________. |
| 4. | Outstanding balance of the applicable Promissory Note prior to giving effect to this Investor Notice: ___________. |
The undersigned has executed this Investor Notice as of the date first set forth above.
| METEORA SELECT TRADING OPPORTUNITIES MASTER, LP | ||
| By: | ||
| Name: | ||
| Title: | ||
Please deliver this Investor Notice by e-mail to the Company at: [email protected], with a copy to [email protected]
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Exhibit 10.2
NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
DRC MEDICINE INC.
Convertible Promissory Note
Original Principal Amount: $1,212,121
Execution Date: September 2, 2026
Issuance Date: The date of the closing
of the Business Combination
Number: DRCM-1
FOR VALUE RECEIVED, RIBBON ACQUISITION CORP., a Cayman Islands exempted company (“RIBB”; the term “Company” refers to RIBB until the closing of the Business Combination and, following the closing of the Business Combination, to DRC Medicine Inc., a Delaware corporation (“PubCo”), which shall be substituted for RIBB as, and shall assume all of the obligations of, the Company pursuant to the Joinder set forth on the signature page hereof), hereby promises to pay to the order of METEORA SELECT TRADING OPPORTUNITIES MASTER, LP, or its registered assigns (the “Holder”), the amount set out above as the Original Principal Amount (or such lesser amount as reduced pursuant to the terms hereof pursuant to repayment, redemption, conversion or otherwise, the “Principal”) and the Payment Premium, as applicable, in each case when due, and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). Certain capitalized terms used herein are defined in Section (12). The Issuance Date is the date of the first issuance of this Convertible Promissory Note (as amended, amended and restated, extended, supplemented or otherwise modified in writing from time to time, this “Note”) regardless of the number of transfers and regardless of the number of instruments, which may be issued to evidence such Note. The Company and the Holder are referred to herein at times, collectively, as the “Parties,” and each, a “Party.”
This Note is being issued pursuant to Section 2.01 of the Standby Equity Purchase Agreement, dated September 2, 2026 (as may be amended, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “SEPA”), by and between the Company and Meteora Select Trading Opportunities Master, LP, as the Investor. The Holder has the option of converting on one or more occasions all or part of the then outstanding balance under this Note by delivering to the Company one or more Conversion Notices in accordance with Section 3 of this Note. The parties acknowledge and agree that any previously executed convertible promissory note issued by the Company to the Holder in connection with the transactions contemplated hereby has been terminated and cancelled and is void and of no further force or effect.
This Note is issued with original issue discount. The purchase price of this Note is equal to eighty-two and one-half percent (82.5%) of the Original Principal Amount, paid pursuant to Section 2.01 of the SEPA (i.e., for each $1,000 of principal face amount, the Company receives $825 in net proceeds). The Principal includes such original issue discount, and the Principal (as reduced by repayment, redemption or conversion) shall be repayable and convertible at its full face amount regardless of the net proceeds received by the Company.
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This Note is executed and delivered on the date set forth above as the Execution Date (the “Execution Date”) by Ribbon Acquisition Corp. (“RIBB”) and is binding upon RIBB as the Company from and after the Execution Date. References in this Note to “the date hereof” mean the Execution Date. Effective upon the closing of the Business Combination, and pursuant to the Joinder set forth on the signature page hereof, DRC Medicine Inc., a Delaware corporation (“PubCo”), shall be substituted for RIBB as the Company and shall assume and be bound by all of the obligations and liabilities of the Company hereunder. The Pre-Advance Closing (as defined in the SEPA) shall occur concurrently with the closing of the Business Combination, and the date of the Pre-Advance Closing shall be the Issuance Date and the date on which this Note is funded.
| (1) | GENERAL TERMS |
(a) Maturity Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, the Payment Premium in respect of such outstanding Principal, accrued and unpaid Interest, and any other amounts outstanding pursuant to the terms of this Note. The “Maturity Date” shall be the date that is twelve (12) months following the closing of the Business Combination, as may be extended by the mutual written consent of the Company and the Holder. Other than as specifically permitted by this Note, the Company may not prepay or redeem any portion of the outstanding Principal and accrued and unpaid Interest.
(b) Interest Rate and Payment of Interest. Interest shall accrue on the outstanding Principal balance hereof at an annual rate equal to 0% (“Interest Rate”), which Interest Rate shall increase to an annual rate of 18% upon the occurrence of an Event of Default (for so long as such event remains uncured). Interest shall be calculated based on a 365-day year and the actual number of days elapsed, to the extent permitted by applicable law. Interest, if any, shall be payable on the Maturity Date and upon any conversion, redemption, prepayment or acceleration, in each case with respect to the amounts so converted, redeemed, prepaid or accelerated.
(c) Monthly Payments. If, any time after the Issuance Date set forth above, and from time to time thereafter, an Amortization Event has occurred, then the Company shall make monthly cash payments beginning on the 7th Trading Day after the Amortization Event Date and continuing on the same day of each successive Calendar Month until the entire outstanding principal amount of this Note shall have been repaid, or the obligation of the Company to make monthly cash payments pursuant to this Section 1(c) has ceased as set forth below. Each monthly cash payment from and after the Amortization Event shall be in an amount equal to the sum of (i) $200,000 of Principal in the aggregate among this Note and all Other Notes (or the outstanding Principal if less than such amount) (the “Amortization Principal Amount”), which Amortization Principal Amount shall be allocated pro rata among this Note and the Other Notes based on their respective outstanding Principal amounts, plus (ii) the Payment Premium in respect of such Amortization Principal Amount, plus (iii) all accrued and unpaid interest hereunder as of each payment date. The obligation of the Company to make monthly cash payments related to an Amortization Event pursuant to this Section (1)(c) shall cease (with respect to any payment that has not yet come due) if at any time after the Amortization Event Date (A) in the event of a Floor Price Event, on the date that is the 10th consecutive Trading Day that the daily VWAP is greater than the Floor Price then in effect, or (B) in the event of an Exchange Cap Event, the date the Company has obtained stockholder approval to increase the number of Common Shares under the Exchange Cap and/or the Exchange Cap no longer applies, or (C) in the event of a Registration Event, the condition or event causing the Registration Event has been cured or the Holder is able to resell the Common Shares issuable upon conversion of this Note in accordance with Rule 144 under the Securities Act, unless a subsequent Amortization Event occurs.
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(d) Optional Redemption. The Company at its option shall have the right, but not the obligation, to redeem (“Optional Redemption”) early a portion or all amounts outstanding under this Note as described in this Section; provided, that the Company provides the Holder with written notice (each, a “Redemption Notice”) of its desire to exercise an Optional Redemption, which Redemption Notice (i) shall be delivered to the Holder after the close of regular trading hours on a Trading Day, and (ii) may only be given if the VWAP of the Common Shares was less than the Fixed Price on the date such Redemption Notice is delivered, unless otherwise agreed by the Holder. Each Redemption Notice shall be irrevocable and shall specify the outstanding balance of the Note to be redeemed and the Redemption Amount. The “Redemption Amount” shall be an amount equal to (a) the outstanding Principal balance being redeemed by the Company plus (b) the Payment Premium in respect of such Principal amount plus (c) all accrued and unpaid interest hereunder as of the date of such redemption. After receipt of a Redemption Notice, the Holder shall have five (5) Trading Days (beginning with the Trading Day immediately following the date such Redemption Notice is delivered to the Holder in accordance with this term of this Section 1(d)) to elect to convert all or any portion of this Note. On the sixth (6th) Trading Day following the delivery of the applicable Redemption Notice, the Company shall deliver to the Holder the Redemption Amount with respect to the Principal amount redeemed to the extent not converted and otherwise after giving effect to conversions or other payments made during such five (5) Trading Day period. Other than as specifically set forth in this Note, the Company shall not have the ability to make any early repayments without the consent of or at the request of the Holder.
(e) Payment Dates. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
(f) Investor Notice Offset. While any amount remains outstanding under this Note, the Investor may deliver Investor Notices under the SEPA at the Conversion Price, and each purchase pursuant to such Investor Notice shall reduce the amount outstanding under this Note as of the date such Investor Notice is delivered, applied in the following order: first, to costs and expenses then due; second, to accrued and unpaid Interest; and third, to outstanding Principal. For the avoidance of doubt, no Payment Premium shall be due, payable or applied in respect of any amount offset pursuant to an Investor Notice. The Holder and the Company shall maintain records showing the amounts so applied and the dates thereof, or shall use such other method reasonably satisfactory to the Holder and the Company, in the manner contemplated by Section (3)(b)(iii). Common Shares issued or sold pursuant to Investor Notices, and Common Shares issuable upon conversion of this Note and the Other Notes, shall draw from the same pool of Common Shares available under the Exchange Cap and shall count toward the Required Reserve Amount.
(g) Pro Rata Treatment; Pari Passu. All payments, prepayments, redemptions and offsets under this Note and the Other Notes, and all allocations of the Amortization Principal Amount, shall be made pro rata among this Note and the Other Notes based on their respective outstanding Principal amounts. This Note and the Other Notes shall rank pari passu with one another, without preference or priority of any one over any other.
(h) Mandatory Prepayment from Financing Proceeds. If the Company or any of its Subsidiaries receives net cash proceeds from any debt, equity, equity-linked, derivative or other financing (in each case, other than (i) equipment or purchase-money financing, including capital leases, (ii) inventory financing, (iii) accounts receivable financing or factoring, and (iv) ordinary-course working capital lines secured solely by such equipment, inventory or receivables), including, without limitation, any amounts payable to the Company under that certain Confirmation re: OTC Equity Prepaid Forward Transaction, dated as of September 2, 2026, among the Investor, RIBB and DRC Medicine Ltd., as amended, restated or supplemented from time to time (the “Forward Purchase Confirmation”), then the Company shall apply thirty-three percent (33%) of such net proceeds to the repayment of outstanding Principal under this Note and the Other Notes (allocated pro rata among this Note and the Other Notes based on their respective outstanding Principal amounts) within three (3) Business Days of receipt thereof; provided that the Holder may waive or defer any such prepayment, in whole or in part, in its sole discretion. No Payment Premium shall be payable in respect of amounts prepaid pursuant to this Section 1(h).
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(i) Application of Shares under the Forward Purchase Confirmation. The Holder may, at its sole election and upon written notice to the Company, apply all or any portion of the amounts then outstanding under this Note against Recycled Shares and/or Additional Shares (each as defined in the Forward Purchase Confirmation) then subject to the Forward Purchase Confirmation, at a price per Common Share equal to the lower of (x) the Conversion Price then in effect and (y) the price that would then be applicable to an Investor Notice under the SEPA, in accordance with the section of the Forward Purchase Confirmation captioned “Application of Shares to Note Obligations.” Upon any such application, the outstanding balance of this Note shall be reduced by the aggregate amount so applied, and no Payment Premium shall be due in respect of amounts so applied.
(j) Capitalized Expenses. The Principal of this Note shall be increased, automatically and without further action by any Person, by any amount capitalized into this Note pursuant to Section 12.04 of the SEPA or pursuant to the provision of the Forward Purchase Confirmation captioned “Reimbursement of Legal Fees and Other Expenses” (in each case, in an amount equal to one hundred fifty percent (150%) of the unpaid amount so capitalized), effective as of the date of such capitalization, and any amount so capitalized shall constitute Principal for all purposes of this Note, including for purposes of conversion, repayment, redemption and the Payment Premium.
(k) Escrowed Shares. Upon the closing of the Business Combination, certain third parties that are then shareholders of PubCo (the “Contributing Shareholders”) shall contribute to Continental Stock Transfer and Trust Company, as escrow agent (the “Escrow Agent”), pursuant to an escrow agreement to be entered into by the Company, the Contributing Shareholders, the Holder and the Escrow Agent prior to the closing of the Business Combination (the “Escrow Agreement”), an aggregate number of issued and outstanding Common Shares that are freely tradable without restriction equal to 9.9% of PubCo’s issued and outstanding Common Shares immediately following the closing of the Business Combination (the “Escrowed Shares”). The Escrow Agreement shall provide that, upon the occurrence of an Event of Default, title to the Escrowed Shares shall transfer to the Holder, free and clear of all liens, claims, encumbrances and transfer restrictions. In addition to any other rights the Holder may have under this Note, the Escrow Agreement (once entered into) or applicable law, the value of the Escrowed Shares so transferred shall constitute partial liquidated damages and not a penalty; provided, however, that nothing in this Note or the Escrow Agreement shall limit or impair the Holder’s right to pursue damages in excess of the value of the Escrowed Shares or any other rights or remedies available to the Holder under this Note, the Escrow Agreement (once entered into) or applicable law. The Escrow Agreement shall further provide that, upon the satisfaction in full of all obligations under this Note, title to the Escrowed Shares shall transfer back to the Contributing Shareholders.
| (2) | EVENTS OF DEFAULT. |
(a) An “Event of Default,” wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body) shall have occurred:
(i) The Company’s failure to pay to the Holder any amount of Principal, Redemption Amount, Payment Premium, Interest, or other amounts when and as due under this Note or any other Transaction Document within five (5) Business Days after such payment is due;
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(ii) (A) The Company or any Significant Subsidiary of the Company shall commence, or there shall be commenced against the Company or any Significant Subsidiary of the Company any proceeding under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company or any Significant Subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction, whether now or hereafter in effect relating to the Company or any Subsidiary of the Company, in any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of sixty one (61) days; (B) the Company or any Significant Subsidiary of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; (C) the Company or any Significant Subsidiary of the Company suffers any appointment of any custodian, private or court appointed receiver or the like for it or all or substantially all of its property which continues undischarged or unstayed for a period of sixty one (61) days; (D) the Company or any Significant Subsidiary of the Company makes a general assignment of all or substantially all of its assets for the benefit of creditors; (E) the Company or any Significant Subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (F) the Company or any Significant Subsidiary of the Company shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; (G) the Company or any Significant Subsidiary of the Company shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or (H) any corporate or other action is taken by the Company or any Significant Subsidiary of the Company for the purpose of effecting any of the foregoing;
(iii) The Company or any Subsidiary of the Company shall default, in any of its obligations under any note, debenture, mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Company or any Subsidiary of the Company in an amount exceeding $1,000,000, whether such indebtedness now exists or shall hereafter be created, and such default is not cured within the time prescribed by the documents governing such indebtedness or if no time is prescribed, within ten (10) Business Days, and as a result, such indebtedness becomes or is declared due and payable;
(iv) A final judgment or judgments for the payment of money in excess of $1,000,000 in the aggregate are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from a creditworthy party shall not be included in calculating the $1,000,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;
(v) The Common Shares shall cease to be quoted or listed for trading, as applicable, on any Principal Market for a period of ten (10) consecutive Trading Days;
(vi) The Company or any Subsidiary of the Company shall be a party to any Change of Control Transaction unless in connection with such Change of Control Transaction this Note is retired;
(vii) The Company’s (A) failure to deliver the required number of Common Shares to the Holder within two (2) Trading Days after the applicable Share Delivery Date (and which failure is not a result of any action or inaction on the part of the Holder) or (B) notice, written or oral, to any holder of this Note, including by way of public announcement, at any time, of its intention not to comply with a request for conversion of all or a portion of this Note into Common Shares that is tendered in accordance with the provisions of this Note;
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(viii) The Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined below) within five (5) Business Days after such payment is due;
(ix) The Company’s failure to timely file with the Commission any Periodic Report on or before the due date of such filing as established by the Commission, it being understood, for the avoidance of doubt, that due date includes any permitted filing deadline extension under Rule 12b-25 under the Exchange Act;
(x) Any representation or warranty made or deemed to be made by or on behalf of the Company in or in connection with any Transaction Document, or any waiver hereunder or thereunder, shall prove to have been incorrect in any material respect (or, in the case of any such representation or warranty already qualified by materiality, such representation or warranty shall prove to have been incorrect) when made or deemed made;
(xi) (A) Any material provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder, ceases to be in full force and effect; (B) the Company or any other Person contests in writing the validity or enforceability of any provision of any Transaction Document; or (C) the Company denies in writing that it has any further liability or obligation under any Transaction Document, or purports in writing to revoke, terminate (other than in accordance with the relevant termination provisions) or rescind any Transaction Document;
(xii) The Company uses the proceeds of the issuance of this Note, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulations T, U and X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof), or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose; or
(xiii) Any Event of Default (as defined in the Other Notes or in any Transaction Document other than this Note) occurs with respect to any Other Notes; or
(xiv) The Company shall fail to observe or perform any material covenant, agreement or warranty contained in, or otherwise commit any material breach or default of any provision of this Note (except as may be otherwise covered by Sections (2)(a)(i) through (2)(a)(xiii) hereof) or any other Transaction Document, which is not cured or remedied within the time prescribed or if no time is prescribed within ten
(10) Business Days.
(xv) The Common Shares shall become subject to a “chill,” suspension or other limitation imposed by DTC, or the Company or the Transfer Agent shall cease to be eligible to participate in DTC’s FAST/DWAC program, and such condition continues for five (5) Trading Days;
(xvi) The Company shall fail to reserve and keep available the Required Reserve Amount in accordance with Section (3)(d)(ii), and such failure is not cured within ten (10) Trading Days; or
(xvii) Following an Exchange Cap Event, the Company shall fail to hold a meeting of its shareholders to seek the approval described in Section (3)(d)(ii) within ninety (90) days after such Exchange Cap Event.
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(b) The “Mandatory Default Amount” means the sum of (x) the outstanding Principal of this Note, (y) the Payment Premium in respect of such outstanding Principal (i.e., 7% of all Principal then outstanding), and (z) all accrued and unpaid Interest and all other amounts owing in respect of this Note. During the time that any portion of this Note is outstanding, if any Event of Default has occurred (other than an event with respect to the Company described in Section (2)(a)(ii)), the Mandatory Default Amount shall become, at the Holder’s election given by notice pursuant to Section (5), immediately due and payable in cash; provided that, in the case of any event with respect to the Company described in Section (2)(a)(ii), the Mandatory Default Amount shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company. Furthermore, in addition to any other remedies, the Holder shall have the right (but not the obligation) to convert, on one or more occasions all or part of the Note in accordance with Section (3) (and subject to the limitations set out in Section (3)(c)(i) and Section (3)(c)(ii)) at any time after an Event of Default has occurred and is continuing until all amounts outstanding under this Note have been repaid in full. The Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, (other than required notice of conversion) and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by the Holder in writing at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
| (3) | CONVERSION OF NOTE. |
This Note shall be convertible into Common Shares, on the terms and conditions set forth in this Section (3).
(a) Conversion Right. Subject to the limitations of Section (3)(c), at any time or times on or after the Issuance Date, the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount into fully paid and nonassessable Common Shares in accordance with Section (3)(b), at the Conversion Price. The number of Common Shares issuable upon conversion of any Conversion Amount pursuant to this Section (3)(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price. The Company shall not issue any fraction of a Common Share upon any conversion. All calculations under this Section (3) shall be rounded to the nearest $0.0001. If the issuance would result in the issuance of a fraction of a Common Share, the Company shall round such fraction of a Common Share up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery of Common Shares upon conversion of any Conversion Amount.
(b) Mechanics of Conversion.
(i) Optional Conversion. To convert any Conversion Amount into Common Shares on any date (a “Conversion Date”), the Holder shall (A) transmit by email (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company and (B) if required by Section (3)(b)(iii), surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Note in the case of its loss, theft or destruction). On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall (X) if legends are not required to be placed on certificates or the book-entry position of the Common Shares and provided that the Transfer Agent is participating in the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer Program, instruct such transfer agent to credit such aggregate number of Common Shares to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate or book-entry position, registered in the name of the Holder or its designee, for the number of Common Shares to which the Holder shall be entitled which certificates shall not bear any restrictive legends unless required pursuant to rules and regulations of the Commission. If this Note is physically surrendered for conversion and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the holder a new Note representing the outstanding Principal not converted. The Person or Persons entitled to receive the Common Shares issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such Common Shares upon the transmission of a Conversion Notice.
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(ii) Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery Date to issue and deliver a certificate to the Holder or credit the Holder’s balance account with DTC for the number of Common Shares to which the Holder is entitled upon such Holder’s conversion of any Conversion Amount (a “Conversion Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Shares to deliver in satisfaction of a sale by the Holder of Common Shares issuable upon such conversion that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out of pocket expenses, if any) for the Common Shares so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Common Shares) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Common Shares to which the Holder is entitled with respect to such Conversion Notice and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Common Shares multiplied by (B) the Closing Price on the Conversion Date.
(iii) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion.
(iv) Late Delivery Damages. In addition to, and without limiting, the Holder’s rights in respect of a Buy-In, if the Company fails to deliver Common Shares to the Holder on or before the applicable Share Delivery Date, then, for each Trading Day after the Share Delivery Date until such delivery is made, the Company shall pay to the Holder cash liquidated damages equal to $10 per Trading Day (increasing to $20 per Trading Day commencing on the fifth (5th) Trading Day after the Share Delivery Date) for each $10,000 of Conversion Amount subject to such failed delivery. Such liquidated damages shall be paid to the Holder within five (5) Business Days after the date incurred and shall not limit the Holder’s right to pursue a Buy-In or any other remedy available hereunder, at law or in equity.
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(c) Limitations on Conversions.
(i) Beneficial Ownership. The Holder shall not have the right to convert any portion of this Note to the extent that after giving effect to such conversion, the Holder, together with any affiliate thereof, would beneficially own (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 9.9% of the number of Common Shares outstanding immediately after giving effect to such conversion. Since the Holder will not be obligated to report to the Company the number of Common Shares it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of Common Shares in excess of 9.9% of the then outstanding Common Shares without regard to any other shares which may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the Principal amount of this Note is convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a Principal amount of this Note that, without regard to any other shares that the Holder or its affiliates may beneficially own, would result in the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum Principal amount permitted to be converted on such Conversion Date in accordance with Section (3)(a) and, any Principal amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding under this Note. The provisions of this Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than 61 days prior notice to the Company. Other Holders shall be unaffected by any such waiver.
(ii) Principal Market Limitation. Notwithstanding anything in this Note to the contrary, the Company shall not issue any Common Shares upon conversion of this Note, or otherwise, if the issuance of such Common Shares, together with any Common Shares issued in connection the SEPA, issuable upon conversion of any Other Notes, and issuable in connection with any other related transactions that may be considered part of the same series of transactions, would exceed the aggregate number Common Shares that the Company may issue in a transaction in compliance with the Company’s obligations under the rules or regulations of The Nasdaq Stock Market LLC (“Nasdaq”) and shall be referred to as the “Exchange Cap,” except that such limitation shall not apply if the Company’s stockholders have approved such issuances on such terms in excess of the Exchange Cap in accordance with the rules and regulations of Nasdaq. For the avoidance of doubt, the Exchange Cap applicable under this clause (ii) is the same Exchange Cap as is determined under Section 3.02(c) of the SEPA, and shall be calculated, and shall adjust, in accordance with Section 3.02(c) of the SEPA.
(d) Other Provisions.
(i) All calculations under this Section (3) shall be rounded to the nearest $0.0001 or whole share.
(ii) So long as this Note or any Other Notes remain outstanding, the Company shall have reserved from its duly authorized share capital, and shall have instructed the Transfer Agent to irrevocably reserve, the maximum number of Common Shares issuable upon conversion of this Note and the Other Notes (assuming for purposes hereof that (x) this Note and such Other Notes are convertible at the Floor Price as of the date of determination, and (y) any such conversion shall not take into account any limitations on the conversion of the Note or Other Notes set forth herein or therein (the “Required Reserve Amount”)), provided that at no time shall the number of Common Shares reserved pursuant to this Section (3)(d)(ii) be reduced other than pursuant to the conversion of this Note and the Other Notes in accordance with their terms, and/or cancellation, or reverse stock split. If at any time while this Note or any Other Notes remain outstanding, the Company does not have a sufficient number of authorized and unreserved Common Shares to satisfy the obligation to reserve for the issuance the Required Reserve Amount, the Company will promptly take all corporate action necessary to propose to a meeting of its shareholders an increase of its authorized share capital necessary to meet the Company’s obligations pursuant to this Note, and cause its board of directors to recommend to the shareholders that they approve such proposal. If at any time the number of Common Shares that remain available for issuance under the Exchange Cap is less than 100% of the maximum number of shares issuable upon conversion of all the Notes and Other Notes then outstanding (assuming for purposes hereof that (x) the Notes are convertible at the Conversion Price then in effect, and (y) any such conversion shall not take into account any limitations on the conversion of the Note, other than the Floor Price then in effect but solely with respect to the Variable Price), the Company will use commercially reasonable efforts to promptly call and hold a shareholder meeting for the purpose of seeking the approval of its shareholders as required by the applicable rules of the Principal Market, for issuances of shares in excess of the Exchange Cap. The Company covenants that, upon issuance in accordance with conversion of this Note in accordance with its terms, the Common Shares, when issued, will be validly issued, fully paid and nonassessable.
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(iii) Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section (2) herein for the Company’s failure to deliver certificates representing Common Shares upon conversion within the period specified herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
(iv) Legal Opinions. Subject in all cases to the availability and effectiveness of the Registration Statement or the Company’s and Holder’s compliance with the applicable provisions of Rule 144, the Company is obligated to cause its legal counsel to deliver legal opinions to the Company’s transfer agent in connection with any legend removal for this Note or the Underlying Shares issued upon conversion of this Note upon the expiration of any holding period or other requirement for which the Underlying Shares may bear legends restricting the transfer thereof; provided, however, (x) if such legend removal is sought under Rule 144, the Company’s obligation under this clause (iv) shall only apply if such legend removal is sought by the Holder in connection with Holder’s sale or transfer of the Note or the Underlying Shares in accordance with Rule 144, and (y) the Company’s obligations under this clause (iv) are subject to the Holder timely providing such certificates and letters of representation that are reasonably required and customary under the circumstances for such legend removal. To the extent that a legal opinion is not provided (either timely or at all), then, in addition to being an Event of Default hereunder, the Company agrees to reimburse the Holder for all reasonable costs actually incurred by the Holder in connection with any legal opinions paid for by the Holder in connection with the sale or transfer of the Underlying Common Shares. The Holder shall notify the Company of any such costs and expenses it incurs that are referred to in this section from time to time and all amounts owed hereunder shall be paid by the Company with reasonable promptness.
(e) Adjustment of Conversion Price upon Subdivision or Combination of Common Shares. If the Company, at any time while this Note is outstanding, shall (i) pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Shares or any other equity or equity equivalent securities payable in Common Shares, (ii) subdivide outstanding Common Shares into a larger number of shares, (iii) combine (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or (iv) issue by reclassification of Common Shares any shares of capital stock of the Company, then each of the Fixed Price and the Floor Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of Common Shares outstanding after such event. Any adjustment made pursuant to this Section shall become effective, in the case of a dividend distribution, immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution or, in the case of a subdivision, combination or re-classification, and shall become
effective immediately after the effective date of such subdivision, combination or re-classification.
(f) Adjustment of Fixed Price upon Issuance of Common Stock. If the Company, at any time while this Note is outstanding, issues or sells any Common Shares or Convertible Securities (other than Excluded Securities and any shares issued or sold by the Company in connection with any Excluded Securities), for a consideration per share (the “New Issuance Price”) less than a price equal to the Fixed Price in effect immediately prior to such issue or sale (such price the “Applicable Price”) (the foregoing, a “Dilutive Issuance”), then immediately after such Dilutive Issuance the Fixed Price then in effect shall be reduced to an amount equal to the New Issuance Price. For the purposes hereof, if the Company in any manner issues or sells any Convertible Securities (other than Excluded Securities and any shares issued or sold by the Company in connection with any Excluded Securities) and the lowest price per share for which one Common Share is issuable upon such conversion or exchange or exercise of such Convertible Securities issued or sold by the Company is less than the Applicable Price, then such Common Share shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. No further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Share upon conversion or exchange or exercise of such Convertible Securities.
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(g) Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of Common Shares are entitled to receive securities or other assets with respect to or in exchange for Common Shares (a “Corporate Event”), the Company shall make appropriate provision to ensure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option, (i) in addition to the Common Shares receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such Common Shares had such Common Shares been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu of the Common Shares otherwise receivable upon such conversion, such securities or other assets received by the holders of Common Shares in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to Common Shares) at a conversion rate for such consideration commensurate with the Conversion Price. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Required Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.
(h) Whenever the Conversion Price is adjusted pursuant to Section (3) hereof, the Company shall promptly provide the Holder with a written notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. For the avoidance of doubt, the adjustment provided in Section (3)(f) operates solely on the Fixed Price, and in no event shall any Dilutive Issuance reduce or otherwise adjust the Floor Price.
(i) In case of any (1) merger or consolidation of the Company or any Subsidiary of the Company with or into another Person, or (2) sale by the Company or any Subsidiary of the Company of more than one-half of the assets of the Company in one or a series of related transactions, a Holder shall have the right to (A) exercise any rights under Section (2)(a)(vi), (B) convert the aggregate amount of this Note then outstanding into the shares of stock and other securities, cash and property receivable upon or deemed to be held by holders of Common Shares following such merger, consolidation or sale, and such Holder shall be entitled upon such event or series of related events to receive such amount of securities, cash and property as the Common Shares into which such aggregate Principal amount of this Note could have been converted immediately prior to such merger, consolidation or sales would have been entitled, or (C) in the case of a merger or consolidation, require the surviving entity to issue to the Holder a convertible Note with a Principal amount equal to the aggregate Principal amount of this Note then held by such Holder, plus all accrued and unpaid interest and other amounts owing thereon, which such newly issued convertible Note shall have terms identical (including with respect to conversion) to the terms of this Note, and shall be entitled to all of the rights and privileges of the Holder of this Note set forth herein and the agreements pursuant to which this Note was issued. In the case of clause (C), the conversion price applicable for the newly issued shares of convertible preferred stock or convertible debentures shall be based upon the amount of securities, cash and property that each Common Shares would receive in such transaction and the Conversion Price in effect immediately prior to the effectiveness or closing date for such transaction. The terms of any such merger, sale or consolidation shall include such terms so as to continue to give the Holder the right to receive the securities, cash and property set forth in this Section upon any conversion or redemption following such event. This provision shall similarly apply to successive such events.
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| (4) | REISSUANCE OF THIS NOTE. |
(a) Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section (4)(d)), registered in the name of the registered transferee or assignee, representing the outstanding Principal being transferred by the Holder (along with any accrued and unpaid interest thereof) and, if less than the entire outstanding Principal is being transferred, a new Note (in accordance with Section (4)(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section (3)(b)(iii) following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.
(b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and substance and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section (4)(d)) representing the outstanding Principal.
(c) Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section (4)(d)) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.
(d) Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms hereof, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section (4)(a) or Section (4)(c), the Principal designated by the Holder which, when added to the Principal represented by the other new Note(s) issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of such new Note), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest from the Issuance Date.
| (5) | NOTICES. |
Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing by letter or electronic mail (“e-mail”) and will be deemed to have been delivered (i) upon receipt, when delivered personally, (ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, as applicable or (iii) receipt, when sent by e-mail, and, in each case of the foregoing clauses (i), (ii) and (iii), properly addressed to the party to receive the same. The addresses and e-mail addresses for such communications shall be:
If to the Company, prior to the closing of the Business Combination, to:
Ribbon Acquisition Corp.
Central Park Tower LaTour Shinjuku Room 3001
6-15-1 Nishi Shinjuku, Shinjuku-ku, Tokyo
160-0023 Japan
Attention: Angshuman (Bubai) Ghosh
E-mail: [email protected]
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with a copy (which shall not constitute notice or delivery of process) to:
Celine & Partners PLLC
1185 6th Avenue, Suite 304, New York,
NY 10036
Attention: Cassi Olson, Esq.
E-mail: [email protected]
If to the Company, following the closing of the Business Combination, to:
DRC Medicine Inc.
9 East Loockerman St., Suite 311, Dover, Kent, Delaware 19901
Attention: Narumi Okazaki
E-mail: [email protected]
with a copy (which shall not constitute notice or delivery of process) to:
Woodbridge International Consulting Ltd.
9F, No. 73, Lequn 3rd. Rd., Taipei 104,
Taiwan
Attention: Lawrence Ong
E-mail: [email protected]
If to the Holder, to:
Meteora Capital, LLC
1200 N Federal Hwy, Suite 200, Boca Raton,
FL 33432
Attention: Vikas Mittal, Managing Member
E-mail: [email protected]
or at such other address and/or e-mail address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party in accordance with this Section at least three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (a) given by the recipient of such notice, consent, waiver or other communication, (b) electronically generated by the sender’s email service provider containing the time, date, recipient email address or (c) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt from a nationally recognized overnight delivery service or receipt by e-mail in accordance with clause (i),
(ii) or (iii) above, respectively.
| (6) | ABSOLUTE OBLIGATION; NO IMPAIRMENT |
Except as expressly provided herein, no provision of this Note shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the Principal of, and interest and other charges (if any) on, this Note at the time, place, and rate, and in the currency, herein prescribed. This Note is a direct obligation of the Company. As long as this Note is outstanding, the Company shall not and shall cause each of its Subsidiaries not to, without the consent of the Holder, enter into any agreement, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability of the Company to perform its obligations under this Note, including, without limitation, the obligation of the Company to make cash payments hereunder.
| (7) | NO STOCKHOLDER RIGHTS |
This Note shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders or any other proceedings of the Company, unless and to the extent converted into Common Shares in accordance with the terms hereof.
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| (8) | CHOICE OF LAW; VENUE; WAIVER OF JURY TRIAL |
(a) Governing Law. This Note and the rights and obligations of the Parties hereunder shall, in all respects, be governed by, and construed in accordance with, the laws (excluding the principles of conflict of laws) of the State of New York (the “Governing Jurisdiction”) (including Section 5-1401 and Section 5-1402 of the General Obligations Law of the State of New York), including all matters of construction, validity and performance.
(b) Jurisdiction; Venue; Service.
(i) The Company hereby irrevocably consents to the non-exclusive personal jurisdiction of the state courts of the Governing Jurisdiction and, if a basis for federal jurisdiction exists, the non-exclusive personal jurisdiction of any United States District Court for the Governing Jurisdiction.
(ii) The Company agrees that venue shall be proper in any court of the Governing Jurisdiction selected by the Holder or, if a basis for federal jurisdiction exists, in any United States District Court in the Governing Jurisdiction selected by the Holder. The Company waives any right to object to the maintenance of any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, in any of the state or federal courts of the Governing Jurisdiction on the basis of improper venue or inconvenience of forum.
(iii) Any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise, brought by the Company against the Holder arising out of or based upon this Note or any matter relating to this Note, or any other Transaction Document, or any contemplated transaction, shall be brought in a court only in the Governing Jurisdiction. The Company shall not file any counterclaim against the Holder in any suit, claim, action, litigation or proceeding brought by the Holder against the Company in a jurisdiction outside of the Governing Jurisdiction unless under the rules of the court in which the Holder brought such suit, claim, action, litigation or proceeding the counterclaim is mandatory, and not permissive, and would be considered waived unless filed as a counterclaim in the suit, claim, action, litigation or proceeding instituted by the Holder against the Company. The Company agrees that any forum outside the Governing Jurisdiction is an inconvenient forum and that any suit, claim, action, litigation or proceeding brought by the Company against the Holder in any court outside the Governing Jurisdiction should be dismissed or transferred to a court located in the Governing Jurisdiction. Furthermore, the Company irrevocably and unconditionally agrees that it will not bring or commence any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Holder arising out of or based upon this Note or any matter relating to this Note, or any other Transaction Document, or any contemplated transaction, in any forum other than the courts of the State of New York sitting in New York County, and the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such suit, claim, action, litigation or proceeding may be heard and determined in such New York State Court or, to the fullest extent permitted by applicable law, in such federal court. The Company and the Holder agree that a final judgment in any such suit, claim, action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(iv) The Company and the Holder irrevocably consent to the service of process out of any of the aforementioned courts in any such suit, claim, action, litigation or proceeding by e-mail or the mailing of copies thereof by registered or certified mail postage prepaid, to it at the e-mail address or physical address, as applicable, provided for notices in this Note, such service to become effective thirty (30) days after the date of such e-mail or mailing, as applicable. The Company and the Holder each irrevocably waive any defense it may have on the grounds of insufficient or improper service with respect to service of process effected in accordance with this Section (8)(b)(iv).
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(v) Nothing herein shall affect the right of the Holder to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise proceed against the Company or any other Person in the Governing Jurisdiction or in any other jurisdiction.
(c) THE PARTIES MUTUALLY WAIVE ALL RIGHT TO TRIAL BY JURY OF ALL CLAIMS OF ANY KIND ARISING OUT OF OR BASED UPON THIS NOTE OR ANY MATTER RELATING TO THIS NOTE, OR ANY OTHER TRANSACTION DOCUMENT, OR ANY CONTEMPLATED TRANSACTION. THE PARTIES ACKNOWLEDGE THAT THIS IS A WAIVER OF A LEGAL RIGHT AND THAT THE PARTIES EACH MAKE THIS WAIVER VOLUNTARILY AND KNOWINGLY AFTER CONSULTATION WITH COUNSEL OF THEIR RESPECTIVE CHOICE. THE PARTIES AGREE THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION, WITHOUT A JURY.
| (9) | FEES AND EXPENSES |
If the Company fails to strictly comply with the terms of this Note, then the Company shall reimburse the Holder promptly for all fees, costs and expenses, including, without limitation, attorneys’ fees and expenses incurred by the Holder in any action in connection with this Note, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or in connection with the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting any sums which become due to the Holder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal; or (iv) the protection, preservation or enforcement of any rights or remedies of the Holder.
| (10) | WAIVER; AMENDMENT |
Any waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. No provision of this Note may be waived or amended other than by a written agreement signed by the parties to this Note.
| (11) | SEVERABILITY; USURY SAVINGS |
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the Principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such power as though no such law has been enacted.
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| (12) | CERTAIN DEFINITIONS. |
For purposes of this Note, the following terms shall have the following meanings:
(a) “Amortization Event” shall mean (i) the daily VWAP is less than the Floor Price then in effect for five Trading Days during a period of seven consecutive Trading Days (a “Floor Price Event”), (ii) the Company has issued to the Investor, pursuant to the transactions contemplated in this Note, the Other Notes and the SEPA, a number of Common Shares in excess of 99% of the Common Shares available under the Exchange Cap as specified in the SEPA (an “Exchange Cap Event”), or (iii) any time after the date that is the deadline for the initial Registration Statement to be declared effective under the Registration Rights Agreement, the Investor is unable to utilize a Registration Statement to resell Underlying Shares (a “Registration Event”) (the first day of each such occurrence, an “Amortization Event Date”).
(b) “Amortization Principal Amount” shall have the meaning set forth in Section (1)(c).
(c) “Applicable Price” shall have the meaning set forth in Section (3)(f).
(d) “Approved Stock Plan” means any employee benefit plan or any share incentive plan (including, without limitation, Nasdaq equity inducement grants or inducement plans) which has been approved by the Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer, director, consultant or other eligible participant under any such plans, in each case for services provided to the Company.
(e) “Bloomberg” means Bloomberg Financial Markets.
(f) “Business Combination” means the business combination by and among Ribbon Acquisition Corp. (“RIBB”), DRC Medicine Inc. (“PubCo”), DRC Merger Inc. and DRC Medicine Ltd., as contemplated by the related business combination agreement, dated as of June 30, 2025, pursuant to which, among other things, RIBB will domesticate as a Delaware corporation and merge with a wholly-owned subsidiary of PubCo, with the result that PubCo will be the surviving publicly traded issuer of the Common Shares, the closing of which gives rise to the issuance of this Note.
(g) “Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions are authorized or required by law or other government action to close.
(h) “Buy-In” shall have the meaning set forth in Section (3)(b)(ii).
(i) “Buy-In Price” shall have the meaning set forth in Section (3)(b)(ii).
(j) “Calendar Month” means one of the twelve months of the year.
(k) “Change of Control Transaction” means the occurrence of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of fifty percent (50%) of the voting power of the Company (except that the acquisition of voting securities by the Holder or any other current holder of convertible securities of the Company shall not constitute a Change of Control Transaction for purposes hereof), (b) a replacement at one time or over time of more than one-half of the members of the board of directors of the Company (other than as due to the death or disability of a member of the board of directors) which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (c) the merger, consolidation or sale of fifty percent (50%) or more of the assets of the Company or any Subsidiary of the Company in one or a series of related transactions with or into another entity, or (d) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth above in (a), (b) or (c). No transfer to a wholly-owned Subsidiary shall be deemed a Change of Control Transaction under this provision.
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(l) “Closing Price” means the price per share in the last reported trade of the Common Shares on a Principal Market or on the exchange which the Common Shares are then listed as quoted by Bloomberg.
(m) “Commission” means the Securities and Exchange Commission.
(n) “Common Shares” means the shares of common stock, par value $0.0001, of the Company and stock of any other class into which such shares may hereafter be changed or reclassified.
(o) “Conversion Amount” means the portion of the Principal, Interest, or other amounts outstanding under this Note to be converted, redeemed or otherwise with respect to which this determination is being made.
(p) “Conversion Date” shall have the meaning set forth in Section (3)(b)(i).
(q) “Conversion Failure” shall have the meaning set forth in Section (3)(b)(ii).
(r) “Conversion Notice” shall have the meaning set forth in Section (3)(b)(i).
(s) “Conversion Price” means, as of any Conversion Date or other date of determination, the lower of (i) an amount (the “Fixed Price”) equal to the average of the daily VWAPs of the Common Shares for the five (5) consecutive Trading Days immediately preceding the date the initial Registration Statement is declared effective by the Commission; provided that, until the initial Registration Statement is declared effective, the Fixed Price shall be deemed to equal the average of the daily VWAPs of the Common Shares for the five (5) consecutive Trading Days immediately preceding the closing of the Business Combination, which deemed amount shall be automatically and irrevocably replaced upon such effectiveness by the foregoing formula, or (ii) ninety-five percent (95%) of the lowest daily VWAP during the 5 consecutive Trading Days immediately preceding the Conversion Date or other date of determination (the “Variable Price”), but which Variable Price shall not be lower than the Floor Price then in effect. The Conversion Price shall be adjusted from time to time pursuant to the other terms and conditions of this Note.
(t) “Convertible Securities” means any stock or securities directly or indirectly convertible into or exercisable or exchangeable for Common Shares, including, without limitation, forward purchase contracts, convertible notes, simple agreements for future equity, and warrants.
(u) “Dilutive Issuance” shall have the meaning set forth in Section (3)(f).
(v) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
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(w) “Excluded Securities” means any Common Shares issued or issuable or deemed to be issued by the Company: (i) under any Approved Stock Plan, (ii) upon issuance of any Common Shares pursuant to the SEPA or the conversion of any securities issued pursuant to the SEPA (including Common Shares issued in connection with this Note and any of the Other Notes); (iii) upon conversion, exercise or exchange of any Options or Convertible Securities which are outstanding or otherwise set forth on Schedule 1 hereto, on the day immediately preceding the date of the SEPA; provided, that such issuance of Common Shares upon exercise of such Options or Convertible Securities is made pursuant to the terms of such Options or Convertible Securities as such terms are in effect on such date and the terms of such Options or Convertible Securities are not amended, modified or changed on or after such date, (iv) upon a stock split, reverse stock split, distribution of bonus shares, combination or other recapitalization events; (v) pursuant to the membership interest purchase agreements listed on Schedule 1; and (vi) pursuant to acquisitions, divestitures, licenses, partnerships, collaborations, joint ventures, or other strategic acquisitions approved by the Board of Directors of the Company (an “Approved Transaction”), provided that such Approved Transaction shall only involve an acquisition, divestiture, license, partnership, collaboration, joint venture or other strategic transaction involving an operating company or asset(s) of a business, in either case, that is complimentary with the business of the Company and its Subsidiaries, and where such issuance of Common Shares in the Approved Transaction is not primarily for the purpose of raising capital (the foregoing, “Qualifying Approved Transactions”).
(x) “Floor Price” solely with respect to the Variable Price, shall initially mean an amount equal to twenty percent (20%) of the average VWAP of the Common Shares for the five (5) Trading Days immediately preceding the earlier of (i) the date on which the registration statement registering for resale the Underlying Shares is declared effective by the Commission, or (ii) the date that is twelve (12) months following the closing of the Business Combination. Notwithstanding the foregoing, until the earlier of (i) the date the initial Registration Statement is declared effective by the Commission and (ii) the date that is twelve (12) months following the closing of the Business Combination, the Floor Price shall be deemed to equal twenty percent (20%) of the average VWAP of the Common Shares for the five (5) Trading Days immediately preceding the closing of the Business Combination. Commencing on the six (6) month anniversary of the closing of the Business Combination, and on every six (6) month anniversary thereafter during the term of this Note, the Floor Price shall automatically reset to the greater of (i) twenty percent (20%) of the ten (10) Trading Day VWAP of the Common Shares immediately preceding the applicable reset date and (ii) the then-applicable minimum bid price required to maintain the Company’s listing on Nasdaq (as adjusted for any stock splits, reverse stock splits, or similar events).
(y) “Fundamental Transaction” means any of the following: (1) the Company effects any merger or consolidation of the Company with or into another Person and the Company is the non-surviving company (other than a merger or consolidation with a wholly owned Subsidiary of the Company for the purpose of redomiciling the Company), (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Shares are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Shares or any compulsory share exchange pursuant to which the Common Shares is effectively converted into or exchanged for other securities, cash or property.
(z) “New Issuance Price” shall have the meaning set forth in Section (3)(f).
(aa) “Options” means any rights, warrants or options to subscribe for or purchase Common Shares or Convertible Securities.
(bb) “Other Notes” means any other notes issued pursuant to the SEPA and any other debentures, notes, or other instruments issued in exchange, replacement, or modification of this Note or any Other Notes.
(cc) “Payment Premium” means 7% of the Principal Amount being paid.
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(dd) “Periodic Reports” shall mean all of the Company’s reports required to be filed by the Company with the Commission under applicable laws and regulations (including, without limitation, Regulation S-K), including annual reports (on Form 10-K), quarterly reports (on Form 10-Q), and current reports (on Form 8-K), for so long as any amounts are outstanding under this Note or any Other Note.
(ee) “Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.
(ff) “Principal Market” means any of The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market, and any successor to any of the foregoing markets or exchanges.
(gg) “Registration Rights Agreement” means the registration rights agreement entered into between the Company and the Holder on the date hereof (referenced as Exhibit A to the SEPA).
(hh) “Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement, covering among other things the resale of the Underlying Shares and naming the Holder as a “selling stockholder” thereunder.
(ii) “Required Holders” means the holders of a majority in aggregate outstanding Principal amount of this Note and the Other Notes, which majority must include the Holder for so long as the Holder holds any portion of this Note or any Other Note.
(jj) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(kk) “Share Delivery Date” shall have the meaning set forth in Section (3)(b)(i).
(ll) “Significant Subsidiary” shall have the meaning set forth in Item 210 of Regulation S-X (or any successor provision). “Subsidiary” shall mean any Person in which the Company, directly or indirectly, (x) owns a majority of the outstanding capital stock or holds a majority of the equity or similar interest of such Person or (y) controls or operates all or substantially all of the business, operations or administration of such Person, and the foregoing are collectively referred to herein as “Subsidiaries.”
(mm) “Trading Day” means a day on which the Common Shares are quoted or traded on a Principal Market on which the Common Shares are then quoted or listed; provided, that in the event that the Common Shares are not listed or quoted, then Trading Day shall mean a Business Day.
(nn) “Transaction Document” means this Note, the Other Notes, the SEPA, the Registration Rights Agreement and any and all other documents, agreements, instruments or other items executed or delivered in connection with this Note or any of the foregoing.
(oo) “Transfer Agent” means the Company’s transfer agent for the Common Shares from time to time, and any successor transfer agent.
(pp) “Underlying Shares” means the Common Shares issuable upon conversion of this Note or as payment of interest in accordance with the terms hereof.
(qq) “VWAP” means, for any Trading Day, the daily volume weighted average price of the Common Shares for such Trading Day on the Principal Market during regular trading hours as reported by Bloomberg L.P.
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(13) COVENANTS. So long as any amount remains outstanding under this Note, the Company covenants and agrees as follows, and any breach of this Section (13) shall constitute an Event of Default under Section (2)(a)(xiv) except where a specific clause of Section (2)(a) is expressly referenced below:
(a) Variable Rate Transactions. The Company shall not, without the prior written consent of the Holder, effect or enter into any equity line of credit, standby equity purchase agreement, “at-the-market” offering, or any issuance of Convertible Securities having a floating, variable or reset conversion, exercise or exchange price, or a conversion, exercise or exchange price based on the future trading price of the Common Shares (each, a “Variable Rate Transaction”); provided that the SEPA, this Note and the Other Notes shall not constitute Variable Rate Transactions.
(b) Indebtedness and Liens. The Company shall not, without the prior written consent of the Holder, (i) incur, create, assume or suffer to exist any indebtedness for borrowed money (“Indebtedness”) that is senior to, or pari passu with, this Note (other than purchase-money Indebtedness and ordinary-course Indebtedness within baskets to be mutually agreed), or (ii) create, incur or suffer to exist any lien, charge, security interest or other encumbrance (“Lien”) upon any of its assets. This Note constitutes a senior unsecured obligation of the Company, senior in right of payment to all other unsecured Indebtedness of the Company.
(c) Distributions. The Company shall not declare or pay any dividend or distribution on, or redeem, repurchase or otherwise acquire, any shares of its capital stock or other junior securities.
(d) Use of Proceeds. The Company shall use the proceeds of this Note for working capital and general corporate purposes, and shall not use such proceeds to repay any Indebtedness owing to any related party. The restriction set forth in Section (2)(a)(xii) with respect to margin stock shall remain in full force and effect.
(e) DTC/DWAC Eligibility. The Company shall at all times maintain the eligibility of the Common Shares for participation in DTC’s FAST/DWAC program and shall maintain the participation of the Transfer Agent therein. Any DTC “chill,” suspension or loss of such eligibility continuing for five (5) Trading Days shall constitute an Event of Default under Section (2)(a)(xv).
(f) Reserve. The Company shall reserve and keep available the Required Reserve Amount in accordance with Section (3)(d)(ii). Any failure to do so that is not cured within ten (10) Trading Days shall constitute an Event of Default under Section (2)(a)(xvi).
(g) Shareholder Approval. Upon the occurrence of an Exchange Cap Event, the Company shall hold a meeting of its shareholders to seek the approval described in Section (3)(d)(ii) within ninety (90) days thereafter. Failure to do so shall constitute an Event of Default under Section (2)(a)(xvii).
| (14) | MISCELLANEOUS. The following provisions apply to this Note: |
(a) Counterparts; Electronic Signatures. This Note may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Note by electronic transmission (including PDF or any electronic signature complying with applicable law) shall be effective as delivery of a manually executed counterpart.
(b) Successors and Assigns. This Note shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. The Company may not assign or delegate any of its rights or obligations hereunder without the prior written consent of the Holder; provided that the substitution of PubCo for RIBB as the Company, pursuant to the Joinder and effective upon the closing of the Business Combination, shall not constitute an assignment or delegation by the Company requiring the consent of the Holder. The Holder may assign, transfer or novate this Note and its rights and obligations hereunder, in whole or in part, to one or more of its Affiliates or to one or more funds or accounts managed or advised by the Holder or its Affiliates upon prior written notice to the Company; provided, however, that any assignment, transfer, or novation to any other unrelated third party shall strictly require the prior written consent of the Company, in accordance with Section (4) and the Transaction Documents, provided further that any such permitted assignee shall be deemed the Holder hereunder to the extent of such assignment.
(c) Entire Agreement. This Note, together with the other Transaction Documents, constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous understandings, agreements, representations and warranties, whether written or oral, with respect to such subject matter.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be duly executed by a duly authorized officer as of the Execution Date set forth above.
COMPANY:
RIBBON ACQUISITION CORP.
| By: | ||
| Name: | Angshuman (Bubai) Ghosh | |
| Title: | Chairman and Chief Executive Officer |
JOINDER OF PUBCO
DRC Medicine Inc., a Delaware corporation (“PubCo”), hereby joins in and executes this Note solely to acknowledge and agree that, effective upon the closing of the Business Combination, PubCo shall become, and shall be substituted for Ribbon Acquisition Corp. as, the “Company” under this Note, and shall assume and be bound by all of the rights, obligations and liabilities of the Company hereunder in accordance with its terms.
DRC MEDICINE INC.
| By: | ||
| Name: | Narumi Okazaki | |
| Title: | Director |
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EXHIBIT I
CONVERSION NOTICE
(To be executed by the Holder in order to Convert the Note)
TO: DRC MEDICINE INC.
Via Email: [email protected], with a copy to [email protected]
The undersigned hereby irrevocably elects to convert a portion of the outstanding and unpaid Conversion Amount of Note No. DRCM-1 into Common Shares of DRC MEDICINE INC., according to the conditions stated therein, as of the Conversion Date written below.
Conversion Date: ________________________________
Principal Amount to be Converted: ________________________________
Accrued Interest to be Converted: ________________________________
Total Conversion Amount to be converted: ________________________________
Fixed Price: ________________________________
Variable Price: ________________________________
Applicable Conversion Price: ________________________________
Number of Common Shares to be issued: ________________________________
Please issue the Common Shares in the following name and deliver them to the following account: Issue to: ________________________________
Broker DTC Participant Code: ________________________________
Account Number: ________________________________
Authorized Signature: ________________________________
Name: ________________________________
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SCHEDULE 1
Existing Options, Convertible Securities and Membership Interest Purchase Agreements
The following are all of the outstanding Options and Convertible Securities, and all membership interest purchase agreements, referenced in the definition of “Excluded Securities,” in each case as of July 29, 2026 (the day immediately preceding the date of the SEPA):
1. Public Rights. 5,000,000 rights issued as part of the units in RIBB’s initial public offering, each entitling the holder thereof to receive one-seventh (1/7) of one Common Share upon consummation of the Business Combination (an aggregate of up to 714,285 Common Shares, with no fractional shares to be issued).
2. Private Placement Rights. 220,000 rights included in the private placement units purchased by Ribbon Investment Company Ltd (the “Sponsor”) simultaneously with RIBB’s initial public offering, each entitling the holder thereof to receive one-seventh (1/7) of one Common Share upon consummation of the Business Combination (an aggregate of up to 31,428 Common Shares).
3. Class B Ordinary Shares. 1,250,000 Class B ordinary shares of RIBB held by the Sponsor, convertible into Class A ordinary shares of RIBB (and, in connection with the Business Combination, shares of common stock of PubCo) on a one-for-one basis.
4. Sponsor Working Capital Loans. Working capital loans that may be made by the Sponsor to RIBB, up to $300,000 of which may be convertible into units of the post-business combination entity at a price of $10.00 per unit at the option of the Sponsor, in each case if and to the extent outstanding.
5. Consulting Agreement. The right of the DRC Consultant to receive 1,750,000 shares of common stock of PubCo at the closing of the Business Combination pursuant to the Consulting Agreement described in the Registration Statement on Form S-4 (File No. 333-295712) (the “Form S-4”).
6. Advisor Agreement. The right of the SPAC Financial Advisor to receive 25,000 shares of common stock of PubCo at the closing of the Business Combination pursuant to the Advisor Agreement described in the Form S-4.
7. Investor Forward Purchase Arrangements. The forward purchase arrangements between the Company and the Investor and/or its affiliates described in the Form S-4, and any Common Shares issuable thereunder.
Membership Interest Purchase Agreements: None.
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Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) dated as of September 2, 2026 is made by and among METEORA SELECT TRADING OPPORTUNITIES MASTER, LP, a Cayman Islands exempted limited partnership (together with its affiliates and permitted assigns, the “Investor”), and RIBBON ACQUISITION CORP., a Cayman Islands exempted company (“RIBB”). The term “Company” refers to RIBB until the closing of the Business Combination and, following the closing of the Business Combination, to DRC Medicine Inc., a Delaware corporation (“PubCo”). RIBB executes and delivers this Agreement as the Company as of the date hereof, and, effective upon the closing of the Business Combination and pursuant to the Joinder of PubCo set forth on the signature pages hereof, PubCo shall be substituted for RIBB as, and shall assume and be bound by all of the obligations and liabilities of, the Company hereunder. The Investor and the Company may be referred to herein individually as a “Party” and collectively as the “Parties.” The Parties acknowledge and agree that any previously executed registration rights agreement between the Company and the Investor in connection with the transactions contemplated hereby has been terminated and cancelled and is void and of no further force or effect.
WHEREAS, the Company and the Investor have entered into that certain Standby Equity Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which (i) the Company may issue, from time to time, to the Investor up to $100,000,000 of newly issued shares of common stock, par value $0.0001 per share, of the Company (the “Common Shares”), and (ii) the Company may issue to the Investor one or more convertible promissory notes evidencing Pre-Paid Advances (each, a “Promissory Note”), in each case on the terms and subject to the conditions set forth in the Purchase Agreement; and
WHEREAS, RIBB, PubCo, DRC Merger Inc. and DRC Medicine Ltd. are parties to that certain Business Combination Agreement, dated as of June 30, 2025 (as amended, restated or otherwise modified from time to time, the “Business Combination Agreement”), pursuant to which, among other things, (i) the shareholders of DRC Medicine Ltd., a Japanese corporation (Kabushiki Kaisha), will exchange their shares for newly issued shares of PubCo, (ii) RIBB will domesticate as a Delaware corporation, (iii) RIBB will merge with and into DRC Merger Inc., a Delaware corporation and wholly owned subsidiary of PubCo, with DRC Merger Inc. surviving such merger as a wholly owned subsidiary of PubCo, and (iv) PubCo will become the public reporting company whose Common Shares are registered under the Exchange Act and listed on the Principal Market (collectively, and together with the other transactions contemplated by the Business Combination Agreement, the “Business Combination”); and
WHEREAS, pursuant to the terms of, and in consideration for the Investor entering into, the Purchase Agreement, and to induce the Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide the Investor with certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”); and
WHEREAS, effective upon the Closing and pursuant to the Joinder of PubCo set forth on the signature pages hereof, PubCo shall be substituted for RIBB as, and shall assume and agree to perform all of the obligations of, the Company under this Agreement, including all obligations to issue, and to register the resale of, the Registrable Securities.
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AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
| 1. | DEFINITIONS. |
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
| (a) | “Applicable Date” means the earlier to occur of (I) the first date on which the initial Registration Statement is declared effective by the SEC (and each Prospectus contained therein is available for use on such date) or (II) the first date on which all of the Registrable Securities are eligible to be resold by the Investor pursuant to Rule 144. |
| (b) | “Business Day” shall mean any day on which the New York Stock Exchange is open for trading, other than any day on which commercial banks are authorized or required to be closed in New York City. |
| (c) | “Business Combination” has the meaning set forth in the Recitals. |
| (d) | “Closing” means the consummation of the Business Combination, and “Closing Date” or “DeSPAC Closing Date” means the date on which the Closing occurs. |
| (e) | “Effectiveness Deadline” means, with respect to the initial Registration Statement filed hereunder, the 60th calendar day following the date of filing of the Registration Statement, provided, however, in the event the Company is notified by the U.S. Securities and Exchange Commission (“SEC”) that the Registration Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as to such Registration Statement shall be the fifth Business Day following the date on which the Company is so notified if such date precedes the date required above. |
| (f) | “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. |
| (g) | “Filing Deadline” means, with respect to the initial Registration Statement required hereunder, the 30th calendar day following the DeSPAC Closing Date. |
| (h) | “Promissory Notes” means, collectively, the convertible promissory notes evidencing the Pre-Paid Advances issued or issuable by the Company to the Investor pursuant to the Purchase Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time. Capitalized terms used in this Agreement and relating to the Promissory Notes, including “Advance,” “Advance Notice,” “Advance Shares,” “Conversion Price,” “Event of Default,” “Floor Price” and “Registration Event,” shall have the respective meanings ascribed to them in the Purchase Agreement and the respective Promissory Notes. |
| (i) | “Person” means a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency. |
| (j) | “Principal Market” means The Nasdaq Stock Market LLC (or any successor thereto) or, if the Common Shares are not then listed or quoted thereon, the principal national securities exchange or quotation system on which the Common Shares are then listed or quoted. |
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| (k) | “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. |
| (l) | “Registrable Securities” means all of (i) the Common Shares issued or issuable to the Investor (A) pursuant to one or more Advances under the Purchase Agreement, (B) upon conversion of the Promissory Notes and (C) in satisfaction of the Commitment Fee payable under the Purchase Agreement, and (ii) any capital stock issued or issuable with respect to the securities referred to in clause (i), including, without limitation, (1) as a result of any stock split, stock dividend or other distribution, recapitalization or similar event or otherwise, and (2) shares of capital stock of the Company into which the Common Shares are converted or exchanged and shares of capital stock of a successor entity into which the Common Shares are converted or exchanged. |
| (m) | “Registration Statement” means any registration statement of the Company filed pursuant to this Agreement, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. |
| (n) | “Required Registration Amount” means (i) with respect to the initial Registration Statement, at least the greater of (x) 10,000,000 Common Shares and (y) 300% of the maximum number of Common Shares issuable upon conversion of all Promissory Notes then outstanding (assuming such Promissory Notes are convertible at the Floor Price then in effect and without regard to any limitations on the conversion thereof), in each case issued or to be issued pursuant to the Purchase Agreement, and (ii) with respect to subsequent Registration Statements, such number of Common Shares as requested by the Investor not to exceed 300% of the maximum number of Common Shares issuable upon conversion of all Promissory Notes then outstanding (assuming for purposes hereof that (x) such Promissory Notes are convertible at the Floor Price (as defined in each respective Promissory Note) in effect as of the date of determination, and (y) any such conversion shall not take into account any limitations on the conversion of the Promissory Notes set forth therein), in each case subject to any cutback set forth in Section 2(e). |
| (o) | “Rule 144” means Rule 144 under the Securities Act or any successor rule thereto. |
| (p) | “Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule. |
| (q) | “SEC” means the Securities and Exchange Commission or any other federal agency administering the Securities Act and the Exchange Act at the time. |
| (r) | “Securities Act” shall have the meaning set forth in the Recitals above. |
| 2. | REGISTRATION. |
| (a) | The Company’s registration obligations set forth in this Section 2 including its obligations to file Registration Statements, obtain effectiveness of Registration Statements, and maintain the continuous effectiveness of any Registration Statement that has been declared effective shall begin on the date hereof and continue until the earlier of (i) the date on which the Investor has sold all of the Registrable Securities and (ii) the date of termination of the Purchase Agreement if as of such termination date the Investor holds no Registrable Securities (the “Registration Period”). |
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| (b) | Subject to the terms and conditions of this Agreement, the Company shall (i) as soon as practicable, but in no case later than the Filing Deadline, prepare and file with the SEC an initial Registration Statement on Form S-1 (or, if the Company is then eligible, on Form S-3 or Form F-3) or any successor form thereto covering the resale by the Investor of the Required Registration Amount in accordance with applicable SEC rules, regulations and interpretations so as to permit the resale of such Registrable Securities by the Investor under Rule 415 at then prevailing market prices (and not fixed prices). The Registration Statement shall contain “Selling Stockholders” and “Plan of Distribution” sections. The Company shall use its best efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Effectiveness Deadline. By 9:30 a.m. on the Business Day following the date of effectiveness, the Company shall file with the SEC in accordance with Rule 424 under the Securities Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement. Prior to the filing of the Registration Statement with the SEC, the Company shall furnish a draft of the Registration Statement to the Investor for their review and comment. |
| (c) | Sufficient Number of Shares Registered. If at any time all Registrable Securities are not covered by a Registration Statement filed pursuant to Section 2(a) as a result of Section 2(e) or otherwise, the Company shall use its commercially reasonable efforts to file with the SEC one (1) or more additional Registration Statements so as to cover all of the Registrable Securities not covered by such initial Registration Statement, in each case as soon as practicable (taking into account any position of the staff of the SEC with respect to the date on which the staff will permit such additional Registration Statement(s) to be filed with the SEC and the rules and regulations of the SEC). The Company shall use its commercially reasonable efforts to cause each such new Registration Statement to become effective as soon as reasonably practicable following the filing thereof with the SEC. |
| (d) | During the Registration Period, the Company shall (i) promptly prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the Prospectus used in connection with a Registration Statement, which Prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, (ii) prepare and file with the SEC additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (iii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424; (iv) respond as promptly as reasonably possible to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and as promptly as reasonably possible provide the Investor true and complete copies of all correspondence from and to the SEC relating to a Registration Statement (provided that the Company may excise any information contained therein which would constitute material non-public information as to any Investor which has not executed a confidentiality agreement with the Company); and (v) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 2(d)) by reason of the Company’s filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company shall incorporate such report by reference into the Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement the Registration Statement. |
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| (e) | Reduction of Registrable Securities Included in a Registration Statement. Notwithstanding anything contained herein, in the event that the SEC requires the Company to reduce the number of Registrable Securities to be included in a Registration Statement in order to allow the Company to rely on Rule 415 with respect to a Registration Statement, then the Company shall reduce the number of Registrable Securities to be included in such Registration Statement (after consultation with the Investor as to the specific Registrable Securities to be removed therefrom) to the maximum number of securities as is permitted to be registered by the SEC. In the event of any reduction in Registrable Securities pursuant to this paragraph, the Company shall use its commercially reasonable efforts to file one (1) or more New Registration Statements with the Commission in accordance with Section 2(c) until such time as all Registrable Securities have been included in Registration Statements that have been declared effective and the Prospectuses contained therein are available for use by the Investor. |
| (f) | Failure to File or Obtain Effectiveness of the Registration Statement or Remain Current. If: (i) a Registration Statement is not filed on or prior to its Filing Deadline, or (ii) a Registration Statement is not declared effective on or prior to the Effectiveness Deadline, or the Company fails to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five (5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that a Registration Statement will not be “reviewed,” or not subject to further review, or (iii) after the effectiveness, a Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required to be effective, or (iv) the Investor is not permitted to utilize the Prospectus therein to resell such Registrable Securities for more than 15 consecutive calendar days or more than an aggregate of 30 calendar days during any 12-month period (which need not be consecutive calendar days), or (v) if after the date that is six (6) months from the Closing Date, the Company does not have available adequate current public information as set forth in Rule 144(c) (any such failure or breach being referred to as an “Event”), then in addition to any other rights the Investor may have hereunder or under applicable law, (A) such Event shall constitute a Registration Event (as defined in each respective Promissory Note), and the Company shall be in breach of the terms and conditions of this Agreement and such Event shall be deemed an Event of Default (as defined in each respective Promissory Note) for so long as such Event remains uncured. During the period of the existence of an uncured Event, the Investor shall have no obligation to accept an Advance Notice or accept or purchase any Advance Shares (other than any Advance Shares purchased by the Investor prior to the occurrence of the Event), and (B) on each such Event date and on each monthly anniversary of each such Event date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to the Investor an amount in cash, as partial liquidated damages (“Liquidated Damages”) and not as a penalty, equal to 2.0% of the then-outstanding principal balance of the Promissory Notes. The parties agree that the maximum aggregate Liquidated Damages payable under this Agreement shall be 24% of the aggregate principal balance of the Promissory Notes. The partial Liquidated Damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event. |
| (g) | Piggy-Back Registrations. If at any time there is not an effective Registration Statement covering all of the Registrable Securities and the Company proposes to register the offer and sale of any Common Shares under the Securities Act (other than a registration (i) pursuant to a Registration Statement on Form S-8 (or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), or (iii) in connection with any dividend or distribution reinvestment or similar plan), whether for its own account or for the account of one (1) or more stockholders of the Company and the form of Registration Statement to be used may be used for any registration of Registrable Securities, the Company shall give prompt written notice (in any event no later than five (5) days prior to the filing of such Registration Statement) to the holders of Registrable Securities of its intention to effect such a registration and shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion from the holders of Registrable Securities; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 2(g) that have been sold or may permanently be sold without any restrictions pursuant to Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent. |
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| (h) | No Inclusion of Other Securities; Other Registration Statements. Except for (x) any Registration Statement that the Company is obligated to file pursuant to the terms of the rights and/or warrants of RIBB that are assumed by, converted into or exchanged for securities of the Company in connection with the Business Combination, and (y) any Registration Statement that the Company is obligated to file in connection with the registration rights agreement(s) to be entered into at the Closing with the sponsor of RIBB, the holders of RIBB’s securities and/or the securityholders of DRC Medicine Ltd., in no event shall the Company (i) include any securities other than Registrable Securities on any Registration Statement pursuant to Section 2(b) or Section 2(c) without the Investor’s prior written consent or (ii) prior to the Applicable Date, or at any time thereafter while any Registration Statement is not effective or the Prospectus contained therein is not available for use, file a registration statement or an offering statement under the Securities Act relating to securities that are not the Registrable Securities (other than a registration statement on Form S-8 or such supplements or amendments to registration statements that are outstanding and have been declared effective by the SEC as of the date hereof) (solely to the extent necessary to keep such registration statements effective and available and not for any other reason). |
| 3. | RELATED OBLIGATIONS. |
| (a) | The Company shall, not less than two (2) Business Days prior to the filing of each Registration Statement and not less than one (1) Business Day prior to the filing of any related amendments and supplements to all Registration Statements (except for annual reports on Form 10-K, supplements and amendments to update the Registration Statement solely for information reflected in the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q or current reports on Form 8-K), furnish to each Investor copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the reasonable and prompt review of such Investor. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Investor shall reasonably object in good faith, in each case solely to the extent that such Registration Statement, Prospectus, amendment or supplement identifies or describes such Investor, such Investor’s beneficial ownership of Registrable Securities or such Investor’s proposed method or plan of distribution; provided that the Company is notified of such objection in writing no later than two (2) Trading Days after the Investor has been so furnished copies of a Registration Statement. Notwithstanding the foregoing, the Company may file such Registration Statement, Prospectus, amendment or supplement upon its incorporation of such revisions as are reasonably necessary to respond in good faith to the Investor’s objection, and the Investor’s failure to deliver a written objection within such two (2) Trading Day period shall be deemed a waiver of its right to object to the applicable filing. The Investor shall keep confidential each Registration Statement, Prospectus, amendment and supplement furnished to it pursuant to this Section 3(a) prior to the public filing thereof, and shall not effect any purchase or sale of the Company’s securities while in possession of any material, nonpublic information contained therein until such information has been publicly disclosed. |
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| (b) | The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge (i) at least one (1) copy (which may be in electronic form) of such Registration Statement as declared effective by the SEC and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) at least one (1) copy (which may be in electronic form) of the final prospectus included in such Registration Statement and all amendments and supplements thereto, and (iii) any documents, which are not publicly available through EDGAR, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor, provided that no document furnished pursuant to clause (iii) shall contain material, nonpublic information unless the Investor has agreed in writing to keep such information confidential. |
| (c) | The Company shall use its best efforts to (i) register and qualify the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of such jurisdictions in the United States as any Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (w) make any change to its certificate of incorporation or by-laws, (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(c), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threat of any proceeding for such purpose. |
| (d) | As promptly as practicable after becoming aware of such event or development, the Company shall notify each Investor in writing of the happening of any event as a result of which the Prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain or disclose the nature, substance or existence of any specific material nonpublic information), and promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission and deliver one (1) electronic copy of such supplement or amendment to the Investor. The Company shall also promptly notify each Investor in writing (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to each Investor by email on the same day of such effectiveness), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate. The Company shall respond as promptly as reasonably practicable to any comments received from the SEC with respect to a Registration Statement or any amendment thereto. |
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| (e) | The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction within the United States of America and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose. |
| (f) | Without limiting any obligation of the Company under the Purchase Agreement, the Company shall use its commercially reasonable efforts to cause all of the Registrable Securities covered by each Registration Statement to be listed on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(f). |
| (g) | The Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a material misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information. |
| (h) | The Company shall cooperate with the holders of the Registrable Securities to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold pursuant to such Registration Statement or Rule 144 free of any restrictive legends and representing such number of Common Shares and registered in such names as the holders of the Registrable Securities may reasonably request prior to sales of Registrable Securities pursuant to such Registration Statement or Rule 144; provided, that the Company may satisfy its obligations hereunder without issuing physical stock certificates through the use of The Depository Trust Company’s Direct Registration System. |
| (i) | The Company shall use its best efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities. |
| (j) | The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder. |
| (k) | Within two (2) Business Days after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investor whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC. |
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| (l) | The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by each Investor of Registrable Securities pursuant to a Registration Statement. |
| 4. | OBLIGATIONS OF THE INVESTOR. |
| (a) | The Investor agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(d) the Investor shall as soon as reasonably practicable discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(d) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary contained herein, subject to compliance with the securities laws, the Company shall cause its transfer agent to deliver unlegended certificates for Common Shares to a transferee of the Investor in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which the Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any event of the kind described in Section 3(d) and for which the Investor has not yet settled. |
| (b) | The Investor covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement. |
| (c) | The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless the Investor has notified the Company in writing of the Investor’s election to exclude all of the Investor’s Registrable Securities from such Registration Statement. |
| 5. | EXPENSES OF REGISTRATION. |
All expenses incurred by the Company in complying with its obligations pursuant to this Agreement and in connection with the registration and disposition of Registrable Securities shall be paid by the Company, including, without limitation, all registration, listing and qualification fees, printers’ fees and expenses of the Company’s counsel and accountants (except legal fees of the Investor’s counsel associated with the review of the Registration Statement).
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| 6. | INDEMNIFICATION. |
With respect to Registrable Securities which are included in a Registration Statement under this Agreement:
| (a) | To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor and its directors, officers, partners, employees, agents, and representatives, and each Person, if any, who controls the Investor within the meaning of the Securities Act or the Exchange Act (each, an “Investor Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several (collectively, “Indemnified Damages”), incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Claims”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact contained in any final prospectus (as amended or supplemented, if the Company files any amendment or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading; or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). The Company shall reimburse the Investor and each such Investor Indemnified Person promptly as Indemnified Damages are incurred and are due and payable, including reasonable legal fees, disbursements and other expenses incurred by an Investor Indemnified Person in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (x) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Investor Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto; (y) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely made available by the Company pursuant to Section 3(c); and (z) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Investor Indemnified Person. |
| (b) | In connection with a Registration Statement, the Investor agrees to indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers, employees, representatives, or agents and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each a “Company Indemnified Person”), against any Claim or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or is based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs (i) in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement or (ii) from the Investor’s violation of any prospectus delivery requirements under the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement; and, subject to Section 6(d), such Investor will reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, which consent shall not be unreasonably withheld, conditioned or delayed; provided, further, that, other than in connection with fraud, gross negligence or willful misconduct on the part of the Investor, the Investor shall be liable under this Section 6(b) (except with respect to any Claim or Indemnified Damages arising out of or based upon a Violation described in clause (ii) above, as to which the following limitation shall not apply) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Company Indemnified Person. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any prospectus shall not inure to the benefit of any Company Indemnified Person if the untrue statement or omission of material fact contained in the prospectus was corrected and such new prospectus was delivered to the Investor prior to such Investor’s use of the prospectus to which the Claim relates. |
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| (c) | Promptly after receipt by an Investor Indemnified Person or Company Indemnified Person under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Investor Indemnified Person or Company Indemnified Person shall, if indemnification in respect of such Claim is to be sought from any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, assume control of the defense thereof with counsel reasonably and mutually satisfactory to the indemnifying party and the Investor Indemnified Person or the Company Indemnified Person, as the case may be; provided, however, that an Investor Indemnified Person or Company Indemnified Person shall have the right to retain its own counsel with the fees and expenses of not more than one (1) counsel for such Investor Indemnified Person or Company Indemnified Person to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Investor Indemnified Person or Company Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between such Investor Indemnified Person or Company Indemnified Person and any other party represented by such counsel in such proceeding. The Investor Indemnified Person or Company Indemnified Person shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Investor Indemnified Person or Company Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Investor Indemnified Person or Company Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent; provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor Indemnified Person or Company Indemnified Person, as the case may be, which consent shall not be unreasonably withheld, conditioned or delayed, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Investor Indemnified Person or Company Indemnified Person of a full and unconditional release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Investor Indemnified Person or Company Indemnified Person with respect to all third parties, firms or corporations relating to the Claim(s) for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such Claim shall not relieve such indemnifying party of any liability to the Investor Indemnified Person or Company Indemnified Person under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such Claim. |
| (d) | The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred. |
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| (e) | The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Investor Indemnified Person or Company Indemnified Person against the indemnifying party or others and (ii) any liabilities the indemnifying party may be subject to pursuant to the law. |
| 7. | CONTRIBUTION. |
To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities; provided, however, that the foregoing limitation shall not apply to any seller in the case of fraud, gross negligence or willful misconduct on the part of such seller.
| 8. | REPORTS UNDER THE EXCHANGE ACT. |
With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration, and as a material inducement to the Investor’s purchase of the Promissory Notes, the Company represents, warrants, and covenants to the following:
| (a) | The Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has timely filed all required reports under section 13 or 15(d) of the Exchange Act during the 12 months prior to the date hereof (or for such shorter period that the issuer was required to file such reports), other than Form 8-K reports. |
| (b) | During the Registration Period, the Company shall file with the SEC in a timely manner all required reports under section 13 or 15(d) of the Exchange Act (it being understood that nothing herein shall limit the Company’s obligations under the Purchase Agreement) and such reports shall conform to the requirements of the Exchange Act and the SEC for filing thereunder. |
| (c) | The Company shall furnish to the Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration, provided that no such information shall include material, nonpublic information unless the Investor has agreed in writing to keep such information confidential. |
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| 9. | AMENDMENT OF REGISTRATION RIGHTS. |
Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Investor. Any amendment or waiver effected in accordance with this Section 9 shall be binding upon each of the Investor and the Company. No such amendment shall be effective to the extent that it applies to fewer than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.
| 10. | MISCELLANEOUS. |
| (a) | A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities or owns the right to receive the Registrable Securities. If the Company receives conflicting instructions, notices or elections from two (2) or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities. |
| (b) | Neither this Agreement nor any rights or obligations of the Company hereunder may be assigned or delegated by the Company without the prior written consent of the Investor; provided that the substitution of PubCo for RIBB as the Company, pursuant to the Joinder and effective upon the closing of the Business Combination, shall not constitute an assignment or delegation by the Company requiring the consent of the Investor. The Investor may, without the consent of the Company, assign or transfer its rights and obligations under this Agreement and the other Transaction Documents, in whole or in part, to one or more of its affiliates or to one or more funds or accounts managed or advised by the Investor or its affiliates, upon written notice to the Company, including, without limitation, by designating one or more such Persons to fund and hold all or any portion of the Pre-Paid Advance and the related Promissory Notes at the Pre-Advance Closing; provided that no such assignment shall relieve the Investor of its obligations hereunder to the extent such obligations are not assumed by such assignee. The Investor may also assign, transfer or novate this Agreement and its rights and obligations hereunder, in whole or in part, to any other Person only with the prior written consent of the Company, provided that any such assignee agrees in writing to be bound by the terms of this Agreement to the extent of such assignment. |
| (c) | Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered pursuant to the notice provisions of the Purchase Agreement or to such other address and/or electronic mail address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) electronically generated by the sender’s email service provider containing the time, date, and recipient email or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by email or receipt from a nationally recognized overnight delivery service in accordance with this section. |
| (d) | Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. |
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| (e) | The laws of the State of New York shall govern all issues concerning the relative rights of the Company and the Investor as its stockholder. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York, sitting in New York County, New York and federal courts for the Southern District of New York sitting in New York, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. |
| (f) | This Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto. |
| (g) | The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. |
| (h) | This Agreement may be executed in identical counterparts, each of which shall be considered one (1) and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. Electronically scanned and delivered signatures (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com), including by e-mail attachment, shall be deemed to have been duly and validly delivered and be valid and effective for all purposes of this Agreement. |
| (i) | Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. |
| (j) | The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party. |
| (k) | This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. |
| (l) | Assumption by PubCo; Successor. Effective upon the Closing and pursuant to the Joinder of PubCo set forth on the signature pages hereof, PubCo shall be substituted for RIBB as the “Company” under this Agreement and shall unconditionally and irrevocably assume, and agree to perform and discharge, all of the obligations of the Company under this Agreement (including, without limitation, the obligation to issue Registrable Securities and to file, cause to become and remain effective, and maintain the effectiveness of, any Registration Statement). The Investor’s rights under this Agreement shall be enforceable against RIBB prior to the Closing and against PubCo from and after the Closing. Prior to the Closing, RIBB shall not, and shall cause PubCo not to, take any action that would impair the ability of PubCo to perform its obligations under this Agreement following the Closing. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Investor and the Company have caused their signature page to this Registration Rights Agreement to be duly executed as of the date first above written.
INVESTOR: |
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METEORA SELECT TRADING OPPORTUNITIES MASTER, LP | ||
| By: | ||
| Name: | Vikas Mittal | |
| Title: | Managing Member | |
COMPANY: |
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RIBBON ACQUISITION CORP. |
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| By: | ||
| Name: | Angshuman (Bubai) Ghosh |
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| Title: | Chairman and Chief Executive Officer |
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JOINDER OF PUBCO
DRC Medicine Inc., a Delaware corporation (“PubCo”), hereby joins in and executes this Agreement solely to acknowledge and agree that, effective upon the closing of the Business Combination, PubCo shall become, and shall be substituted for Ribbon Acquisition Corp. as, the “Company” under this Agreement, and shall assume and be bound by all of the rights, obligations and liabilities of the Company hereunder in accordance with its terms.
DRC MEDICINE INC. |
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| By: | ||
| Name: | Narumi Okazaki | |
| Title: | Director | |
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Exhibit 10.4
| Date: | September 2, 2026 | |
| To: | Ribbon Acquisition Corp., a Cayman Islands exempted company (“RIBB”) and DRC Medicine Ltd., a Japanese corporation (“Target”). | |
| Address: | Central Park Tower LaTour Shinjuku Room 3001, 6-15-1 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023 Japan | |
| From: | Meteora Select Trading Opportunities Master, LP ( “Seller”) | |
| Re: | OTC Equity Prepaid Forward Transaction | |
The purpose of this agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction (the “Transaction”) entered into between Seller, RIBB and Target on the Trade Date specified below. The parties acknowledge and agree that any previously executed forward purchase confirmation and any previously executed subscription agreement, in each case among or between any of the parties in connection with the transactions contemplated hereby, have been terminated and cancelled and are void and of no further force or effect. The term “Counterparty” refers to RIBB until the Business Combination (as defined below), then to PubCo (as defined below), following the Business Combination. In connection with the transactions contemplated by the BCA (as defined below), DRC Medicine Inc., a Delaware corporation (“PubCo”), and the Target will engage in a share exchange pursuant to which the Target will become a wholly-owned subsidiary of PubCo (the “Share Exchange”); RIBB will de-register as a Cayman Islands exempted company and domesticate as a Delaware corporation (the “Domestication”); and, at the closing of the Business Combination, RIBB will merge with and into DRC Merger Inc., a Delaware corporation and wholly-owned subsidiary of PubCo (“Merger Sub”), with Merger Sub surviving the merger as a wholly-owned subsidiary of PubCo (the “Merger”; the Share Exchange, the Domestication, the Merger and the other transactions contemplated by the BCA, collectively, the “Business Combination”). Certain terms of the Transaction shall be as set forth in this Confirmation, with additional terms as set forth in a pricing date notice (the “Pricing Date Notice”) in the form of Schedule A hereto. In connection with the Transaction, Counterparty and Seller have entered into a Subscription Agreement, dated as of the date hereof (the “Subscription Agreement”), pursuant to which Seller has agreed to subscribe for and purchase from Counterparty, as Additional Shares hereunder, a number of Shares up to the Maximum Number of Shares, less the number of Recycled Shares, at a per share price equal to the Initial Price. This Confirmation, together with the Pricing Date Notice(s), constitutes a “Confirmation” and the Transaction constitutes a separate “Transaction” as referred to in the ISDA Form (as defined below).
This Confirmation, together with the Pricing Date Notices, evidences a complete binding agreement between Seller, RIBB and Target as to the subject matter and terms of the Transaction to which this Confirmation relates and shall supersede all prior or contemporaneous written or oral communications with respect thereto. For the avoidance of doubt, no presentation, term sheet, email, model, or other pre-execution material—whether marked “for discussion purposes,” “illustrative,” or otherwise—shall be used to interpret, supplement, or contradict this Confirmation, and all such materials are expressly superseded.
The 2006 ISDA Definitions (the “Swap Definitions”) and the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and with the Swap Definitions, the “Definitions”), each as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. If there is any inconsistency between the Definitions and this Confirmation, this Confirmation governs. If, in relation to the Transaction to which this Confirmation relates, there is any inconsistency between the ISDA Form, this Confirmation (including the Pricing Date Notice), the Swap Definitions and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) this Confirmation (including the Pricing Date Notice(s)); (ii) the Equity Definitions; (iii) the Swap Definitions, and (iv) the ISDA Form.
This Confirmation, together with the Pricing Date Notice, shall supplement, form a part of, and be subject to an agreement in the form of the ISDA 2002 Master Agreement (the “ISDA Form”) as if Seller, Target and Counterparty had executed an agreement in such form (but without any Schedule except as set forth herein under “Schedule Provisions”) on the Trade Date of the Transaction.
The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms
| Type of Transaction: | Share Forward Transaction | |
| Trade Date: | September 2, 2026 | |
| Pricing Date: | As specified in a Pricing Date Notice. | |
| Effective Date: | One (T+2) Settlement Cycle following the Pricing Date. | |
| Valuation Date: | Unless extended by mutual written consent, the date that is six (6) months after the date of the closing of the Business Combination (the date of the closing of the Business Combination, the “Closing Date”) pursuant to the Business Combination Agreement, dated as of June 30, 2025 (which may be amended, supplemented or otherwise modified from time to time, the “BCA”), by and among RIBB, PubCo, Merger Sub and the Target. Notwithstanding the foregoing, Seller may accelerate the Valuation Date upon the occurrence of a Delisting Event by delivering written notice to Counterparty (which Valuation Date shall not be earlier than the day such notice is effective). The Valuation Date notice will become effective immediately upon its delivery from Seller to Counterparty in accordance with this Confirmation. | |
| VWAP Price: |
For any scheduled trading day, the volume weighted average price per Share for such day as reported on the relevant Bloomberg Screen “RIBB <Equity> AQR SEC” (or any successor thereto), or if such price is not so reported on such trading day for any reason or is erroneous, the VWAP Price shall be as reasonably determined by the Calculation Agent.
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| Reset Price: | The Reset Price will initially be $10.00; provided that, from and after the thirty-first (31st) calendar day following the Closing Date, the Reset Price on any day shall equal the lower of (i) $10.00 and (ii) the volume weighted average price per Share over all Scheduled Trading Days in the calendar week immediately preceding the calendar week in which such day falls, as reported by Bloomberg L.P. (determined by the Calculation Agent in a manner consistent with “VWAP Price” above); provided, further, that the Reset Price shall in all cases remain subject to reduction upon (x) mutual written consent or (y) a Dilutive Offering Reset immediately upon the occurrence of such Dilutive Offering, and following any Dilutive Offering Reset the Reset Price shall not thereafter exceed the reduced price established pursuant thereto. | |
| Dilutive Offering Reset: |
To the extent the Counterparty closes any agreement to sell or grants any right to reprice, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other disposition) any Shares or any securities of the Counterparty or any of its respective subsidiaries (but for the avoidance of doubt, excluding any secondary transfers), which would entitle the holder thereof to acquire or sell on behalf of the Counterparty at any time Shares or other securities, including, without limitation, any debt, preferred stock, preference shares, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Shares or other securities, at an effective price per share less than the then existing Reset Price (a “Dilutive Offering”), then the Reset Price shall be modified to equal such reduced price as of such date; provided that, for purposes of determining the “effective price per share” of any such warrant, option, convertible security, exchangeable security, right or other instrument that has a conversion price, exercise price, exchange price or purchase price that is variable, floating, resettable, or otherwise subject to adjustment (whether by reference to a market price, a discount to a market price, a future issuance, a reset event, a make-whole, a ratchet or any other formula or contingency), the effective price per share shall be deemed to be the lowest price per share at which such instrument could be converted, exercised, exchanged or purchased under its terms (after giving effect to all applicable discounts, resets, ratchets, make-whole adjustments and floors, but disregarding any maximum, ceiling or cap on the conversion, exercise or exchange price), determined without regard to whether the conditions to such lowest price have then occurred; provided that, without limiting the foregoing, a Dilutive Offering Reset (for the avoidance of doubt) shall not include (i) the grant, issuance or exercise of employee stock options or other equity awards under the Counterparty or PubCo’s equity compensation plans or Shares underlying warrants now outstanding or issued in connection with the Business Combination, (ii) Shares issued in connection with the Business Combination pursuant to the BCA, and (iii) other financings completed by Seller.
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| Seller: | Seller. | |
| Buyer: | Counterparty. | |
| Shares: | Prior to the closing of the Business Combination, Class A ordinary shares, par value $0.0001 per share, of Ribbon Acquisition Corp. (Ticker: “RIBB”) and, after the closing of the Business Combination, shares of common stock, par value $0.0001 per share, of PubCo. | |
| Number of Shares: | The sum of (i) the number of Recycled Shares and (ii) the number of Additional Shares, but in no event more than the Maximum Number of Shares. The Number of Shares is subject to reduction only as described under “Optional Early Termination.” | |
| Maximum Number of Shares: | 4,100,000 Shares (the “Purchased Amount”); upon the occurrence of a Dilutive Offering Reset, a number of Shares equal to the quotient of (i) the Purchased Amount divided by (ii) the quotient of (a) the price of such Dilutive Offering divided by (b) $10.00. For the avoidance of doubt, any adjustment pursuant to a Dilutive Offering Reset shall only result in an increase to the Maximum Number of Shares. | |
| Initial Price: | Equals the Per-Share Redemption Price (the “Redemption Price”) as defined in Article 1 of the Amended and Restated Memorandum and Articles of Association, adopted January 14, 2025, as amended from time to time (the “Articles of Association”). | |
| Recycled Shares: |
The number of Shares purchased by Seller from third parties (other than Counterparty) through a broker in the open market (other than through Counterparty); provided that Seller shall have irrevocably waived all redemption rights with respect to such Shares as provided below in the section captioned “Transactions by Seller in the Shares.” Seller shall specify the number of Recycled Shares (the “Number of Recycled Shares”) in the initial Pricing Date Notice. Following the closing of the Business Combination, Seller’s sales of Recycled Shares on any single trading day shall not exceed ten percent (10.0%) of the aggregate trading volume of the Shares on such trading day (the “Volume Limit”); provided that Counterparty may, in its sole discretion and by written notice to Seller, increase the Volume Limit. | |
| Additional Shares: | The number of Shares (if any) subscribed for and purchased by Seller directly from Counterparty pursuant to the Subscription Agreement, at a per share price equal to the Initial Price; provided that the number of Additional Shares, together with the number of Recycled Shares, shall not exceed the Maximum Number of Shares; provided, further, that Seller shall not be required to purchase Additional Shares to the extent such purchase would cause Seller’s beneficial ownership of the Shares to exceed 9.9% of the total Shares outstanding immediately after giving effect to such issuance, unless Seller in its sole discretion waives such ownership limitation. Seller shall specify the number of Additional Shares (the “Number of Additional Shares”) in the initial Pricing Date Notice. Additional Shares shall be treated as Shares for all purposes of this Confirmation, including for purposes of the Prepayment Amount, Optional Early Termination, Valuation Date settlement and the Valuation Date Consideration. | |
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| Prepayment Amount: | A cash amount equal to the product of (i) the Number of Shares as set forth in a Pricing Date Notice and (ii) the Initial Price. | |
| Prepayment: |
Subject to Counterparty receiving a Pricing Date Notice, Counterparty will pay the Prepayment Amount by bank wire in immediately available funds to an account designated by Seller from (subject to the below exception) the Counterparty’s Trust Account maintained by Odyssey Trust Company holding the net proceeds of the sale of the units in Counterparty’s initial public offering and the sale of private placement units (the “Trust Account”), no later than the earlier of (a) one Local Business Day after the Closing Date and (b) the date any assets from the Trust Account are disbursed in connection with the Business Combination; provided that the Prepayment Amount shall be reduced, on a dollar-for-dollar basis, by the aggregate purchase price paid by Seller to Counterparty under the Subscription Agreement in respect of the Additional Shares (such reduction, the “Subscription Netting”), it being understood that the Additional Shares shall be deemed prepaid by Seller through Seller’s funding of such purchase price under the Subscription Agreement.
Counterparty shall provide notice to (i) Counterparty’s trustee of the entrance into this Confirmation no later than one Local Business Day following the date hereof, with copy to Seller and Seller’s outside legal counsel, and (ii) Seller and Seller’s outside legal counsel a final draft of the flow of funds from the Trust Account one Local Business Day prior to the closing of the Business Combination itemizing the Prepayment Amount due to Seller; provided that Seller shall be invited and permitted to attend any closing call in connection with the Business Combination. No payments shall be made from the Trust Account prior to the Seller being paid the Prepayment Amount. | |
| PIPE Subscription Agreement: |
The Counterparty and Seller have entered into a subscription agreement for the purchase by Seller of the Additional Shares (the “Subscription Agreement”), and to the extent that Seller is unable to acquire all of the Additional Shares prior to the closing of the Business Combination, from time to time will enter into additional subscription agreement(s) for the purchase by Seller of the remaining Additional Shares. As of the date hereof, the Subscription Agreement is in full force and effect and is legal, valid and binding upon the Counterparty and, to the knowledge of the Counterparty, the Seller, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity. Seller shall purchase pursuant to the Subscription Agreement Additional Shares in an amount no less than the Maximum Number of Shares less the Recycled Shares; provided, however, that Seller shall not be required to purchase an amount of Additional Shares such that, following the issuance of such Additional Shares, its beneficial ownership would exceed 9.9% of the total Shares outstanding immediately after giving effect to such issuance, unless Seller in its sole discretion waives such ownership limitation. | |
4
| Registration of Additional Shares: |
Within thirty calendar days following the Closing Date, PubCo shall file with the Securities and Exchange Commission (at PubCo’s sole cost and expense) a registration statement registering the resale of the Additional Shares (the “Registration Statement”), and PubCo shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but in any event no later than sixty calendar days after the Closing Date (the “Effectiveness Deadline”); provided, that the Effectiveness Deadline shall be extended to ninety calendar days after the Closing Date if the Registration Statement is reviewed by, and comments thereto are provided from, the Commission; provided, further, that PubCo shall have the Registration Statement declared effective within five Business Days after the date PubCo is notified (orally or in writing, whichever is earlier) by the staff of the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review.
PubCo shall use its commercially reasonable efforts to cause the Registration Statement to remain effective with respect to Seller until the earliest to occur of (i) the date on which Seller ceases to hold any Additional Shares and (ii) the first date on which Seller can sell all of its Additional Shares (or shares received in exchange therefor) under Rule 144 of the Securities Act without limitation as to the manner of sale or the amount of such securities that may be sold (the earlier of clauses (i) and (ii), the “End Date”). PubCo will use its commercially reasonable efforts to (A) for so long as Seller holds Additional Shares, make and keep public information available (as those terms are understood and defined in Rule 144) and file with the Commission in a timely manner all reports and other documents required of PubCo under the Exchange Act to enable Seller to resell the Additional Shares pursuant to Rule 144, and (B) at the reasonable request of Seller, cause PubCo’s transfer agent to remove all restrictive legends from any Additional Shares being sold under the Registration Statement or pursuant to Rule 144 at the time of sale.
Notwithstanding the foregoing, PubCo may delay or postpone filing of the Registration Statement, and from time to time require Seller not to sell under the Registration Statement or suspend the use or effectiveness of any such Registration Statement, if (A) PubCo determines in good faith that an amendment is needed to avoid a material misstatement or omission, (B) such filing or use would materially affect a bona fide business or financing transaction of PubCo or would require premature disclosure of information that would materially adversely affect PubCo, (C) in the good faith judgment of the majority of the members of PubCo’s board of directors, such filing, effectiveness or use would be seriously detrimental to PubCo, or (D) the majority of the board determines to delay or suspend filing or use in connection with SEC guidance directed at special purpose acquisition companies or related disclosure matters (each, a “Suspension Event”); provided, that (w) PubCo shall not delay filing or suspend use of the Registration Statement for more than sixty consecutive days or more than one hundred twenty total calendar days, or more than three times in any three hundred sixty day period, and (x) PubCo shall use commercially reasonable efforts to make the Registration Statement available for sale by Seller as soon as practicable thereafter. |
5
PubCo shall, notwithstanding any termination of this Confirmation, indemnify, defend and hold harmless Seller, its officers, directors, members, managers, partners, agents and employees, and each person who controls Seller (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including reasonable and documented attorneys’ fees) and expenses (collectively, “Losses”) arising out of or caused by or based upon (i) any untrue or alleged untrue statement of a material fact contained in the Registration Statement or any prospectus included therein (or any amendment or supplement thereto), or any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any violation or alleged violation by PubCo of the Securities Act, Exchange Act or any state securities law or any rule or regulation thereunder, except in each case to the extent such Losses arise out of information furnished in writing to PubCo by or on behalf of Seller expressly for use therein.
| ||
| Seller shall indemnify and hold harmless PubCo, its directors, officers, members, managers, partners, agents and employees, and each person who controls PubCo (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), to the fullest extent permitted by applicable law, from and against all Losses arising out of or based upon any untrue or alleged untrue statement of a material fact, or any omission or alleged omission of a material fact, contained in the Registration Statement or any prospectus included therein (or any amendment or supplement thereto), to the extent such Losses are based upon information regarding Seller furnished in writing to PubCo by or on behalf of Seller expressly for use therein. In no event shall the liability of Seller exceed the dollar amount of the net proceeds received by Seller upon the sale of the Additional Shares giving rise to such indemnification obligation. | ||
| Variable Obligation: | Not applicable. | |
| Exchanges: | Nasdaq Stock Market LLC, New York Stock Exchange LLC or NYSE American LLC | |
| Related Exchange(s): | All Exchanges | |
| Payment Dates: | Following the Business Combination, the last day of each calendar month or, if such date is not a Local Business Day, the next following Local Business Day, until the Valuation Date. | |
| Reimbursement of Legal Fees and Other Expenses: | Together with the Prepayment Amount, Counterparty shall pay to Seller an amount equal to (a) the reasonable and documented attorney fees and other reasonable out-of-pocket expenses related thereto actually incurred by Seller or its affiliates in connection with this Transaction, not to exceed $80,000 in the aggregate and (b) expenses actually incurred in connection with the acquisition of the Recycled Shares. Any amount described in clause (a) that is not paid in cash together with the Prepayment Amount shall be payable by capitalization into the outstanding principal face amount of the Convertible Promissory Note designated DRCM-1 in an amount equal to one hundred fifty percent (150%) of the amount then owed, in accordance with Section 12.04 of the SEPA; amounts reimbursed under clause (a) and under Section 12.04 of the SEPA shall be without duplication. | |
| Settlement Terms | ||
| Settlement Method Election: | Not Applicable. | |
| Settlement Method: |
Cash Settlement. | |
6
| Settlement Amount: |
A cash amount equal to (1) the Number of Shares as of the Valuation Date less the aggregate Terminated Shares, less the number of Unregistered Shares (as defined below), multiplied by (2) the volume weighted daily VWAP Price over the Valuation Period.
Shares which are set forth in Pricing Date Notices that are neither registered for resale under an effective resale Registration Statement nor transferable without restriction (whether by reason of holding period or otherwise) by Seller pursuant to Rule 144 (or any successor provision) under the Securities Act of 1933, as amended (such Shares, the “Unregistered Shares”), will not be included in the calculation of the Settlement Amount.
| |
| Settlement Amount Adjustment: |
A cash amount equal to the product of (1) the Maximum Number of Shares as of the Valuation Date multiplied by (2) $1.00. The Settlement Amount Adjustment shall be paid by Counterparty in cash, unless Seller and Counterparty mutually agree in writing prior to the Valuation Date that the Settlement Amount Adjustment may be paid in Shares.
| |
| Valuation Period: |
The period commencing on the Valuation Date (or if the Valuation Date is not an Exchange Business Day, the first Exchange Business Day thereafter) and ending at 4:00 pm on the Exchange Business Day on which 10% of the total volume traded in the Shares over the period, excluding any volumes traded during the opening and closing auctions, has reached an amount equal to the Number of Shares outstanding as of the Valuation Date, less the number of Terminated Shares and Unregistered Shares.
| |
| Cash Settlement Payment Date: |
The tenth Local Business Day immediately following the last day of the Valuation Period. For the avoidance of doubt, on the Cash Settlement Payment Date the Seller shall remit to the Counterparty an amount equal to the Settlement Amount and shall not otherwise be required to return to the Counterparty any of the Prepayment Amount, and the Counterparty shall remit to the Seller the Settlement Amount Adjustment. The Settlement Amount and the Settlement Amount Adjustment shall be netted against one another on the Cash Settlement Payment Date such that (x) if the Settlement Amount exceeds the Settlement Amount Adjustment, the Seller shall pay the Counterparty the net difference in cash, and (y) if the Settlement Amount Adjustment exceeds the Settlement Amount, the Counterparty shall pay the Seller the net difference in cash.
| |
| Settlement Currency: | USD. | |
| Excess Dividend Amount: | Ex Amount. | |
| Optional Early Termination: | From time to time and on any date following the Trade Date (any such date, an “OET Date”) and subject to the terms and conditions below, Seller may, in its absolute discretion, terminate the Transaction in whole or in part by providing written notice to Counterparty (the “OET Notice”), by the later of (a) the fifth Local Business Day following the OET Date and (b) no later than the next Payment Date following the OET Date, (which shall specify the quantity by which the Number of Shares shall be reduced (such quantity, the “Terminated Shares”)); provided that “Terminated Shares” includes only such quantity of Shares by which the Number of Shares is to be reduced and included in an OET Notice and does not include any other Share sales, any Share Consideration Shares sales or any other Shares, whether or not sold, which Shares will not be included in any OET Notice or included in the definition, or when calculating the number, of Terminated Shares. The effect of an OET Notice shall be to reduce the Number of Shares by the number of Terminated Shares specified in such OET Notice with effect as of the related OET Date. As of each OET Date, Counterparty shall be entitled to an amount from Seller, and the Seller shall pay to Counterparty an amount, equal to the product of (x) the number of Terminated Shares and (y) the Reset Price in respect of such OET Date (an “Early Termination Obligation”), provided that Seller shall pay the Early Termination Obligation to the accounts and in the amounts as directed by Counterparty. The remainder of the Transaction, if any, shall continue in accordance with its terms. The Early Termination Obligation shall be payable by Seller on the first Local Business Day following the date of delivery by Seller of the OET Notice. For the avoidance of doubt, no other amounts as may be set forth in Sections 16.1 and 18.1 of the Swap Definitions shall be due to Counterparty upon an Optional Early Termination. The payment date may be changed within a quarter at the mutual agreement of the parties. | |
7
| Application of Shares to Note Obligations: | From time to time on any date following the Closing Date, Seller may, at its sole election, by written notice to Counterparty (each, an “Application Notice”), apply all or any portion of the amounts then outstanding under any Note (as defined below) against Recycled Shares and/or Additional Shares then included in the Number of Shares, at a price per Share (the “Application Price”) equal to the lower of (i) the Conversion Price (as defined in the applicable Note) then in effect and (ii) the purchase price per Share that would then be applicable to an Investor Notice under the SEPA (each as defined below). Each Application Notice shall specify the number of Shares so applied (such Shares, “Applied Shares”) and the aggregate amount applied against the Notes, which shall equal the product of the number of Applied Shares and the Application Price (the “Application Amount”).
Upon delivery of an Application Notice: (i) the Number of Shares shall be reduced by the number of Applied Shares with effect as of the date of such Application Notice; (ii) the Applied Shares shall be released from the Transaction and shall be held by Seller free and clear of all obligations under this Confirmation; (iii) the outstanding balance of the applicable Note(s) shall be reduced by the Application Amount, with no Payment Premium (as defined in the applicable Note) due in respect of amounts so applied; and (iv) no Early Termination Obligation or other amount shall be payable by Seller in respect of Applied Shares, the reduction of the Note balance pursuant to clause (iii) being in lieu thereof. Applied Shares shall not constitute Terminated Shares.
Applied Shares are outstanding Shares previously issued or purchased and are not issued by Counterparty upon such application, and shall not be counted against the Exchange Cap, the Registration Limitation, the Ownership Limitation, the Required Reserve Amount or the Commitment Amount, in each case under and as defined in the SEPA.
The application of Applied Shares shall not reduce the Maximum Number of Shares. Following any such application, Seller may subscribe for additional Additional Shares under the Subscription Agreement (or one or more further subscription agreements on substantially the same terms), in an aggregate number not exceeding, together with all Shares then included in the Number of Shares, the Maximum Number of Shares, notwithstanding any limitation in the Subscription Agreement measured by reference to Shares previously subscribed for thereunder. The purchase price for any such replacement Additional Shares shall be the Initial Price per Share and shall be deemed satisfied and prepaid in full by set-off against a corresponding additional Prepayment Amount deemed paid by Counterparty to Seller, such that no cash shall be payable by either party in respect of such subscription, and such Shares shall constitute Additional Shares for all purposes of this Confirmation.
As used herein: “SEPA” means the Standby Equity Purchase Agreement, dated as of September 2, 2026, between Counterparty and Seller, as amended, restated or supplemented from time to time; “Note” means each convertible promissory note issued pursuant to the SEPA (including the Convertible Promissory Note designated DRCM-1), as so amended; and “Investor Notice” has the meaning ascribed thereto in the SEPA. |
8
| Share Consideration: | In addition to the Prepayment Amount, Counterparty shall pay directly from the Trust Account, on the Prepayment Date, an amount equal to the product of (x) up to 50,000 (with such final amount to be determined by Seller in its sole discretion via written notice to Counterparty) and (y) the Initial Price. The Shares purchased with the Share Consideration (the “Share Consideration Shares”) shall be incremental to the Maximum Number of Shares, shall not be included in the Number of Shares in this Transaction, and the Seller and the Share Consideration Shares shall be free and clear of all obligations with respect to the Seller and such Share Consideration Shares in connection with this Confirmation. | |
| Share Adjustments: | ||
| Method of Adjustment: | Calculation Agent Adjustment. | |
| Extraordinary Events: | ||
| Consequences of Merger Events involving Counterparty: | ||
| Share-for-Share: | Calculation Agent Adjustment. | |
| Share-for-Other: | Cancellation and Payment. | |
| Share-for-Combined: | Component Adjustment. | |
| Tender Offer: | Applicable; provided, however, that Section 12.1(d) of the Equity Definitions is hereby amended by (i) replacing the reference therein to “10%” with “25%” and (ii) adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof. Sections 12.1(e) and 12.1(l)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting Shares”. | |
| Consequences of Tender Offers: | ||
| Share-for-Share: | Calculation Agent Adjustment. | |
| Share-for-Other: | Calculation Agent Adjustment. | |
| Share-for-Combined: | Calculation Agent Adjustment. | |
| Composition of Combined Consideration: | Not Applicable. | |
| Nationalization, Insolvency or Delisting: | Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, Nasdaq Capital Market or the Nasdaq Global Market (or their respective successors) or such other exchange or quotation system which, in the determination of the Calculation Agent, has liquidity comparable to the aforementioned exchanges; if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange. | |
9
| Business Combination Exclusion: | Notwithstanding the foregoing or any other provision herein, the parties agree that neither any PIPE financing in connection with the Business Combination nor the Business Combination shall constitute a Merger Event, Tender Offer, Delisting or any other Extraordinary Event hereunder. | |
| Additional Disruption Events: | ||
| (a) Change in Law: | Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by adding the words “(including, for the avoidance of doubt and without limitation, adoption or promulgation of new regulations authorized or mandated by existing statute)” after the word “regulation” in the second line thereof. | |
| (b) Failure to Deliver: | Not Applicable. | |
| (c) Insolvency Filing: | Applicable. | |
| (d) Hedging Disruption: | Not Applicable. | |
| (e) Increased Cost of Hedging: | Not Applicable. | |
| (f) Loss of Stock Borrow: | Not Applicable. | |
| (g) Increased Cost of Stock Borrow: | Not Applicable. | |
| Determining Party: | For all applicable events, Seller, unless (i) an Event of Default, Potential Event of Default or Termination Event has occurred and is continuing with respect to Seller, or (ii) if Seller fails to perform its obligations as Determining Party, in which case a Third Party Dealer (as defined below) in the relevant market selected by Counterparty will be the Determining Party. When making any determination or calculation as “Determining Party”, Seller shall be bound by the same obligations relating to required acts of the Calculation Agent as set forth in Section 1.40 of the Equity Definitions and this Confirmation as if Determining Party were the Calculation Agent. | |
| Additional Provisions: | ||
| Calculation Agent: | Seller, unless (i) an Event of Default, Potential Event of Default or Termination Event has occurred and is continuing with respect to Seller, or (ii) if Seller fails to perform its obligations as Calculation Agent, in which case an unaffiliated leading dealer in the relevant market selected by Counterparty in its sole discretion will be the Calculation Agent. | |
10
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In the event that a party (the “Disputing Party”) does not agree with any determination made (or the failure to make any determination) by the Calculation Agent or the Determining Party, the Disputing Party shall have the right to require that the Calculation Agent or the Determining Party, as applicable, have such determination reviewed by a disinterested third party that is a dealer in derivatives of the type that is the subject of the dispute and that is not an Affiliate of either party (a “Third Party Dealer”). Such Third Party Dealer shall be jointly selected by the parties within one Local Business Day after the Disputing Party’s exercise of its rights hereunder (once selected, such Third Party Dealer shall be the “Substitute Calculation Agent” or “Substitute Determining Party,” as applicable). If the parties are unable to agree on a Substitute Calculation Agent or Substitute Determining Party, as applicable, within the prescribed time, each of the parties shall elect a Third Party Dealer and such two dealers shall agree on a Third Party Dealer by the end of the subsequent Local Business Day. Such Third Party Dealer shall be deemed to be the Substitute Calculation Agent or Substitute Determining Party, as applicable. Any exercise by the Disputing Party of its rights hereunder must be in writing and shall be delivered to the Calculation Agent or Determining Party, as applicable, not later than the third Local Business Day following the Local Business Day on which the Calculation Agent or Determining Party, as applicable, notifies the Disputing Party of any determination made (or of the failure to make any determination). Any determination by the Substitute Calculation Agent or Substitute Determining Party, as applicable, shall be binding in the absence of manifest error and shall be made as soon as possible but no later than the second Local Business Day following the Substitute Calculation Agent’s or Substitute Determining Party’s, appointment, as applicable. The costs of such Substitute Calculation Agent or Substitute Determining Party, as applicable, shall be borne by (a) the Disputing Party if the Substitute Calculation Agent or Substitute Determining Party, as applicable, substantially agrees with the Calculation Agent or Determining Party, or (b) the non-Disputing Party if the Substitute Calculation Agent or Substitute Determining Party, as applicable, does not substantially agree with the Calculation Agent or Determining Party, as applicable. If, after following the procedures and within the specified time frames set forth above, a binding determination is not achieved, the original determination of the Calculation Agent or Determining Party, as applicable, shall apply.
Following any adjustment, determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty (which may be by email), the Calculation Agent will promptly (but in any event within five Exchange Business Days) provide to Counterparty by email to the email address provided by Counterparty in such written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such adjustment, determination or calculation (including any quotations, market data or information from internal or external sources, and any assumptions used in making such adjustment, determination or calculation), it being understood that in no event will the Calculation Agent be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it in making such adjustment, determination or calculation or any information that is subject to an obligation not to disclose such information. All calculations and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. | ||
| Non-Reliance: | Applicable. | |
| Agreements and Acknowledgements Regarding Hedging Activities: | Applicable. | |
| Additional Acknowledgements: | Applicable. | |
| Schedule Provisions: | ||
| Specified Entity: | In relation to both Seller and Counterparty for the purpose of: | |
| Section 5(a)(v), Not Applicable | ||
| Section 5(a)(vi), Not Applicable | ||
| Section 5(a)(vii), Not Applicable | ||
| Cross-Default: | The “Cross-Default” provisions of Section 5(a)(vi) of the ISDA Form will not apply to either party. | |
11
| Credit Event Upon Merger: | The “Credit Event Upon Merger” provisions of Section 5(b)(v) of the ISDA Form will not apply to either party. | |||
| Automatic Early Termination: | The “Automatic Early Termination” of Section 6(a) of the ISDA Form will not apply to either party. | |||
| Other Events of Early Termination | Notwithstanding anything to the contrary herein, in the Definitions or in the ISDA Form, if the Business Combination does not close and the Shares are redeemed pursuant to a SPAC liquidation and Reimbursement, this Transaction shall automatically terminate as of the time when redemptions are first effected without any amounts or other obligations being owed by either party to the other hereunder except for the payment by Counterparty to Seller of any amounts owing pursuant to “Reimbursement of Legal Fees and Other Expenses” herein. | |||
| Termination Currency: | United States Dollars. | |||
| Additional Termination Events: |
Will apply to Seller. The occurrence of any of the following events, and only these events, shall constitute an Additional Termination Event in respect of which Seller shall be the Affected Party. | |||
| (a) | The BCA is terminated pursuant to its terms prior to the closing of the Business Combination; | |||
| (b) | A material and uncured breach of the PIPE Subscription Agreement by Counterparty or Target; and | |||
| (c) | If it is, or, as a consequence of a change in law, regulation or interpretation, it becomes or will become, unlawful for the Seller to perform any of its obligations contemplated by the Transaction. | |||
Notwithstanding anything to the contrary herein, in the Definitions or in the ISDA Form, if an Early Termination Date is designated as a result of an Additional Termination Event, then this Transaction will terminate as of such Early Termination Date without any amounts or other obligations being owed by either party to the other hereunder.
Notwithstanding the foregoing, Counterparty’s obligations set forth under the captions, “Reimbursement of Legal Fees and Other Expenses,” and “Other Provisions — (d) Indemnification” shall survive any termination due to the occurrence of either of the foregoing Additional Termination Events. | ||||
| Governing Law: | New York law (without reference to choice of law doctrine other than Sections 5-1401 and 5-1402 of the General Obligations Law). | |||
| Credit Support Provider: | With respect to Seller and Counterparty, None. | |||
| Local Business Days: | Seller specifies the following places for the purposes of the definition of Local Business Day as it applies to it: New York. Counterparty specifies the following places for the purposes of the definition of Local Business Day as it applies to it: New York. | |||
12
Representations, Warranties and Covenants
| 1. | Each of Counterparty, Target and Seller represents and warrants to, and covenants and agrees with, the other as of the date on which it enters into the Transaction that (in the absence of any written agreement between the parties that expressly imposes affirmative obligations to the contrary for the Transaction) as follows. |
| (a) | Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into the Transaction and as to whether the Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into the Transaction, it being understood that information and explanations related to the terms and conditions of the Transaction will not be considered investment advice or a recommendation to enter into the Transaction. No communication (written or oral) received from the other party will be deemed to be an assurance or guarantee as to the expected results of the Transaction. Nothing in this Confirmation obligates Seller to sell Shares, to generate proceeds for Counterparty, to support the market price of the Shares, or to act for any purpose other than Seller’s own account. Seller acts solely as principal for its own account and is not an agent, fiduciary, or representative of Counterparty. Seller has no obligation to remit sale proceeds, account for trading activity, or disclose trading strategies except as expressly set forth herein. The parties agree that this Confirmation shall not be recharacterized as a financing arrangement, capital raise, agency relationship, or market support agreement, and no court shall imply obligations inconsistent with Seller’s express discretionary trading rights. |
| (b) | Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction. It is also capable of assuming, and assumes, the risks of the Transaction. |
| (c) | Non-Public Information. It is in compliance with Section 10(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
| (d) | Tender Offer Rules. Counterparty, Target and Seller each acknowledge that the Transaction has been structured, and all activity in connection with the Transaction has been undertaken to comply with the requirements of all tender offer regulations applicable to the Business Combination, including Rule 14e-5 under the Exchange Act. |
| (e) | Authorization. The Transaction, including this Confirmation, has been entered into pursuant to authority granted by its board of directors or other governing authority. It has no internal policy, whether written or oral, that would prohibit it from entering into any aspect of the Transaction, including, but not limited to, the purchase of Shares to be made in connection therewith. |
| (f) | Enforceability. The Transaction, including the Confirmation, when executed and delivered by each of the parties, will constitute the valid and legally binding obligation of each such party, enforceable against each of them in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally, or (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. |
| (g) | Compliance with Other Instruments and Law. The execution, delivery and performance of this Transaction, including the Confirmation, and the consummation of the Transaction, will not result in any violation or default (i) of any provisions of its organizational documents, (ii) of any instrument, judgment, order, writ or decree to which it is a party or by which it is bound, (iii) under any note, indenture or mortgage to which it is a party or by which it is bound, (iv) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound or (v) of any provision of any applicable federal or state statute, rule or regulation, in each case (other than clause (i)), which would have a material adverse effect on it or its ability to consummate the Transaction. |
| (h) |
Affiliate Status. It is the intention of the parties hereto that Seller shall not be an “affiliate” (as such term is defined in Rule 405 under the Securities Act) of Target or Counterparty, including RIBB or PubCo, following the closing of the Business Combination, as a result of the transactions contemplated hereunder. |
| 2. | Counterparty represents and warrants to, and covenants and agrees with, Seller as of the date on which it enters into the Transaction, that: |
| (a) | Total Assets. RIBB has as of the date hereof, and expects to have as of the closing of the Business Combination, after giving effect to this transaction and other contemplated transactions, total assets of at least USD $5,000,001, which are, for the avoidance of doubt, measured on a consolidated basis. Additionally, Counterparty shall publicly disclose on a Form 8-K prior to the closing of the Business Combination the cash balance of the Trust Account available to pay redemptions, as of the business day immediately prior to the date of filing of such Form 8-K. |
| (b) | Non-Reliance. Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Seller is not making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards. |
13
| (c) | Solvency. Counterparty is, and shall be as of the date of any payment or delivery by Counterparty under the Transaction, solvent and able to pay its debts as they come due, with assets having a fair value greater than liabilities and with capital sufficient to carry on the businesses in which it engages. Prior debts (exclusive of any expenses, payables or liabilities incurred in the ordinary course of business) of Target and Counterparty have either been or will be satisfied or will be converted to shares of Counterparty as of the Closing Date. Counterparty: (i) has not engaged in and will not engage in any business or transaction after which the property remaining with it will be unreasonably small in relation to its business (ii) has not incurred and will not incur debts (exclusive of any expenses, payables or liabilities incurred in the ordinary course of business), and (iii) as a result of entering into and performing its obligations under the Transaction, (a) it has not violated and will not violate any relevant state law provision applicable to the acquisition or redemption by an issuer of its own securities and (b) Counterparty would not be nor would it be rendered “insolvent” (as such term is defined under Section 101(32) of the Bankruptcy Code or under any other applicable local insolvency regime). |
| (d) | Public Reports. As of the Trade Date, Counterparty is in material compliance with its reporting obligations under the Exchange Act, and all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Exchange Act, when considered as a whole (with the most recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. |
| (e) | No Distribution. Counterparty is not entering into the Transaction to facilitate a distribution of the Shares (or any security that may be converted into or exercised or exchanged for Shares, or whose value under its terms may in whole or in significant part be determined by the value of the Shares) or in connection with any future issuance of securities. |
| (f) | SEC Documents. The Counterparty shall comply with the Securities and Exchange Commission’s guidance, including Compliance and Disclosure Interpretation No. 166.01, for all relevant disclosure in connection with this Confirmation and the Transaction, and will not file with the Securities and Exchange Commission any Form 8-K, Registration Statement on Form S-4, including any post-effective amendment thereof, proxy statement, or other document that includes any disclosure regarding this Confirmation or the Transaction without consulting with and reasonably considering any comments received from Seller, provided that, no consultation shall be required with respect to any subsequent disclosures that are substantially similar to prior disclosures by Counterparty that were reviewed by Seller; provided that the filing date of the Form 8-K that initially announces the Transaction shall be filed at least two Local Business Days prior to the Closing Date. |
| (g) | Waiver. The Counterparty shall waive any violation of its “bulldog clause,” as set forth in Article 36.5(b)(ii) of the Articles of Association, and any other restrictions that would be caused by Seller entering into this Transaction. |
| (h) | Disclosure. The Counterparty agrees to comply with applicable SEC guidance in respect of disclosure and the Counterparty shall preview with Seller all public disclosure relating to the Transaction and shall consult with Seller to ensure that such public disclosure, including the press release, Form 8-K or other filing that announces the Transaction adequately discloses the material terms and conditions of the Transaction and all material non-public information disclosed to Seller in connection with the Transaction, in form and substance reasonably acceptable to Seller, and shall be publicly filed no later than two Local Business Days prior to the Closing Date. |
| (i) | Listing. The Counterparty agrees to use its best efforts to maintain the listing of the PubCo Shares on a national securities exchange; provided that if the Pubco Shares cease to be listed on a national securities exchange or upon the filing of a Form 25 (and, in each case, if the Counterparty fails to relist on such national securities exchange or list on a different national securities exchange within 10 calendar days) (following such 10 calendar day period, each a “Delisting Event”), Seller may accelerate the Valuation Date under this Confirmation by delivering notice to the Counterparty and shall be entitled to the Legal Fees and Other Expenses, which shall be due and payable immediately following the Valuation Date. |
| (j) | Regulatory Filings. Counterparty covenants that it will make all regulatory filings that it is required by law or regulation to make with respect to the Transaction. |
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| (k) | Regulation M and Approvals. Counterparty is not on the Trade Date and agrees and covenants on behalf of itself and Target that it and Target will not be on any date Seller is purchasing shares that may be included in a Pricing Date Notice, engaged or engaging in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not and shall cause Target to not, until the second scheduled trading day immediately following dates referenced in the preceding sentence, engage in any such distribution. |
| (l) | Investment Company Act. It is not and, after giving effect to the Transaction, will not be required to register as an “investment company” under, and as such term is defined in, the Investment Company Act of 1940, as amended. |
| (m) | Audit Confirmations. As requested by Seller and its auditors, Counterparty shall provide sufficient information for purposes of audit confirmations. |
| (n) | Lock-Up Provision. For the sake of clarity, the Shares underlying the Number of Shares shall not be subject to any lock-up. |
| 3. | Seller represents and warrants to, and covenants and agrees with, Counterparty and Target as of the date on which it enters into the Transaction, that: |
| (a) | Regulatory Filings. Seller will make all regulatory filings that it is required by law or regulation to make with respect to the Transaction including, without limitation, as may be required by Section 13 or Section 16 (if applicable) under the Exchange Act and, assuming the accuracy of Counterparty’s Repurchase Notices (as described under “Repurchase Notices” below) any sales of the Recycled Shares and Additional Shares will be in compliance therewith. |
| (b) | Eligible Contract Participant. Seller is an “eligible contract participant” under, and as defined in, the Commodity Exchange Act (7 U.S.C. § 1a(18)) and CFTC regulations (17 CFR § 1.3). |
| (c) | Tax Characterization. Seller shall treat the Transaction as a derivative financial contract for U.S. federal income tax purposes, and it shall not take any action or tax return filing position contrary to this characterization, except to the extent otherwise required by a “determination” within the meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, or any similar provision of state, local or foreign law. |
| (d) | Private Placement. Seller (i) is an “accredited investor” as such term is defined in Regulation D as promulgated under the Securities Act, (ii) is entering into the Transaction for its own account without a view to the distribution or resale thereof and (iii) understands that the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act. |
| (e) | Shorting. Seller agrees not to effect any Short Sales in respect of the Shares prior to the earlier of (i) the Valuation Date and (ii) the cancellation of the Transaction. “Short Sales” means all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act. |
Transactions by Seller in the Shares
| (a) | Seller hereby waives the redemption rights (“Redemption Rights”) set forth in the Articles of Association in connection with the Business Combination with respect to the Recycled Shares only during the term of this Confirmation. Subject to any restrictions set forth in this Confirmation, Seller may sell or otherwise transfer, loan or dispose of any of the Shares or any other shares or securities of the Counterparty in one or more public or private transactions at any time. |
| (b) | Any Recycled Shares sold by Seller during the term of the Transaction and included on an OET Notice will cease to be included in the Number of Shares. Unless specified in an OET Notice, no sale of Shares by Seller shall terminate all or any portion of this Confirmation and provided that Seller complies with all of its other obligations hereunder nothing contained herein shall limit any of Seller’s purchases and sales of Shares. |
| (c) | An Optional Early Termination is a voluntary designation made by Seller solely for settlement purposes and shall not be construed as authorizing, restricting, or conditioning any sale of Shares. |
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Trust Account Waiver
Seller hereby waives any and all right, title and interest, or any claim of any kind they have or may have during the term of this Confirmation, in or to any monies held in the Counterparty’s Trust Account and agrees not to seek recourse against the Trust Account in each case, as a result of, or arising out of, this Transaction; provided, however, that nothing herein shall (x) serve to limit or prohibit Seller’s right to pursue a claim against the Counterparty for legal relief against assets held outside the Trust Account, for specific performance or other equitable relief, (y) serve to limit or prohibit any claims that the Seller may have in the future against the Counterparty’s assets or funds that are not held in the Trust Account (including any funds that have been released from the Trust Account and any assets that have been purchased or acquired with any such funds), (z) be deemed to limit Seller’s right, title, interest or claim to the Trust Account by virtue of such Seller’s record or beneficial ownership of securities of the Counterparty acquired by any means other than pursuant to this Transaction or (aa) serve to limit Seller’s redemption right with respect to any such securities of the Seller other than during the term of the Confirmation.
No Arrangements
Seller, Counterparty and Target each acknowledge and agree that: (i) there are no voting, hedging or settlement arrangements between or among Seller, Counterparty and Target with respect to any Shares or the Counterparty or Target, other than those set forth herein; (ii) Seller may hedge its risk under the Transaction in any way Seller determines (that does not otherwise violate the terms of this Confirmation), provided that Seller has no obligation to hedge with the purchase, sale or maintenance of any Shares or otherwise; (iii) Counterparty and Target will not be entitled to any voting rights in respect of any of the Shares underlying the Transaction; and (iv) Counterparty and Target will not seek to influence Seller with respect to the voting or disposition of any Shares.
Wall Street Transparency and Accountability Act
In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, nor any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the date of this Confirmation, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the ISDA Form, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the ISDA Form.
Address for Notices
Notice to Seller:
Meteora Capital, LLC
1200 N Federal Hwy, Ste 200
Boca Raton, FL 33432
Email: [email protected]
Notice to Counterparty:
Ribbon Acquisition Corp.
Central Park Tower LaTour Shinjuku Room 3001
6-15-1 Nishi Shinjuku, Shinjuku-ku
Tokyo 160-0023 Japan
Attention: Angshuman (Bubai) Ghosh
Email: [email protected]
with a copy (which shall not constitute notice) to:
Celine & Partners PLLC
1185 6th Avenue, Suite 304
New York, NY 10036
Attention: Cassi Olson, Esq.
Email: [email protected]
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Following the Closing of the Business Combination:
DRC Medicine Inc.
9 East Loockerman St., Suite 311
Dover, Kent, Delaware, 19901
Attention: Narumi Okazaki
Email: [email protected]
with a copy (which shall not constitute notice) to:
Woodbridge International Consulting Ltd.
9F, No. 73, Lequn 3rd. Rd.
Taipei 104, Taiwan
Attention: Lawrence Ong
Email: [email protected]
Other Provisions.
| (a) | Rule 10b-5. |
| (i) | Counterparty represents and warrants to Seller that Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) for the purpose of inducing the purchase or sale of such securities or otherwise in violation of the Exchange Act, and Counterparty represents and warrants to Seller that Counterparty has not entered into or altered, and agrees that Counterparty will not enter into or alter, any corresponding or hedging transaction or position with respect to the Shares. |
| (ii) | Counterparty agrees that it will not seek to control or influence Seller’s decision to make any “purchases or sales” under the Transaction, including, without limitation, Seller’s decision to enter into any hedging transactions. Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Confirmation and the Transaction under the federal securities laws, including without limitation, the prohibitions on manipulative and deceptive devices under the Exchange Act. |
| (iii) | Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the requirements for the amendment or termination of a written trading plan for trading securities. Without limiting the generality of the foregoing, Counterparty acknowledges and agrees that any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, including without limitation the prohibition on manipulative and deceptive devises under the Exchange Act and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares. |
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| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares (other than in connection with a Counterparty equity compensation program (e.g., to fund taxes in connection with vested RSUs)), promptly give Seller a written notice of such repurchase (a “Repurchase Notice”), if following such repurchase, the number of outstanding Shares as determined on such day is (i) less than the number of Shares outstanding that would result in the percentage of total Shares outstanding represented by the number of Shares underlying the Transaction increasing by 0.10% (in the case of the first such notice) or (ii) thereafter more than the number of Shares that would need to be repurchased to result in the percentage of total Shares outstanding represented by the number of Shares underlying the Transaction increasing by a further 0.10% less than the number of Shares included in the immediately preceding Repurchase Notice; provided that Counterparty agrees that this information does not constitute material non-public information; provided further if this information shall be material non-public information, it shall publicly disclosed immediately. Counterparty agrees to indemnify and hold harmless Seller and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Seller’s hedging activities as a consequence of remaining or becoming a Section 16 “insider” following the closing of the Business Combination, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and reasonable and documented out-of-pocket expenses (including reasonable and documented attorney’s fees), joint or several, which an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Seller with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within thirty days, upon written request, each of such Indemnified Persons for any reasonable and documented legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing; provided, however, for the avoidance of doubt, Counterparty has no indemnification or other obligations with respect to Seller becoming a Section 16 “insider” prior to the closing of the Business Combination. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Seller with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. |
| (c) |
Transfer or Assignment. The rights and duties under this Confirmation may be transferred, novated or assigned by Seller, in whole or in part, to any other party without the consent of Counterparty provided that (i) such assignee agrees in writing to be bound by all terms of this Confirmation, and (ii) Counterparty receives a fully executed copy of the assignment and novation agreement, if applicable. Furthermore, if at any time following the closing of the Business Combination at which (A) the Section 16 Percentage exceeds 9.9%, or (B) the Share Amount exceeds the Applicable Share Limit, if any applies (any such condition described in clause (A) or (B), an “Excess Ownership Position”), Seller is unable to effect a transfer or assignment of a portion of the Transaction to a third party on pricing terms reasonably acceptable to Seller and within a time period reasonably acceptable to Seller such that no Excess Ownership Position exists, then Seller may designate any Local Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Seller so designates an Early Termination Date with respect to a portion of the Transaction, a portion of the Shares with respect to the Transaction shall be delivered to Counterparty as if the Early Termination Date was the Valuation Date in respect of a Transaction having terms identical to the Transaction and a Number of Shares equal to the number of Shares underlying the Terminated Portion. The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, as determined by Seller, (A) the numerator of which is the number of Shares that Seller and each person subject to aggregation of Shares with Seller under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder and all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) of the Exchange Act) with Seller directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) (the “Seller Group” ) and (B) the denominator of which is the number of Shares outstanding. |
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The “Share Amount” as of any day is the number of Shares that Seller and any person whose ownership position would be aggregated with that of Seller and any group (however designated) of which Seller is a member (Seller or any such person or group, a “Seller Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty that are, in each case, applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership under any Applicable Restriction, as determined by Seller in its sole discretion.
The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting (other than on Schedule 13D or 13G) or registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Seller Person, or could result in an adverse effect on a Seller Person, under any Applicable Restriction, as determined by Seller in its sole discretion, minus (B) 0.1% of the number of Shares outstanding. |
| (d) | Indemnification. Counterparty agrees to indemnify and hold harmless each Indemnified Person from and against any and all losses (but not including financial losses to an Indemnified Person relating to the economic terms of the Transaction provided that the Counterparty performs its obligations under this Confirmation in accordance with its or their terms), claims, damages and liabilities (or actions in respect thereof) expenses (including reasonable attorney’s fees), joint or several, incurred by or asserted against such Indemnified Person arising out of, in connection with, or relating to, and to reimburse, within thirty days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Indemnified Parties and the Counterparty or between any of the Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon the Transaction or other financing arrangements involving the Indemnified Person, whether directly with the Counterparty or for the ultimate benefit of the Counterparty, including the execution or delivery of this Confirmation or any other agreement for such financing arrangements, the performance by Counterparty of its obligations under the Transaction or any other agreement for such financing arrangements, any material breach of any covenant, representation or warranty made by Counterparty or Target in this Confirmation or the ISDA Form or any other agreement for such financing arrangements, regulatory filings and submissions made by or on behalf of the Counterparty related to the Transaction or such other financing arrangements (other than as relates to any information provided in writing by or on behalf of Seller or its affiliates), or the consummation of the transactions contemplated , including any untrue statement or alleged untrue statement of a material fact contained in any registration statement, press release, filings or other document, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. If for any reason the foregoing indemnification is unavailable to any Indemnified Person or insufficient to hold harmless any Indemnified Person, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the Indemnified Person as a result of such loss, claim, damage or liability. In addition (and in addition to any other Reimbursement of Legal Fees and other Expenses contemplated by this Confirmation), Counterparty will reimburse any Indemnified Person for all reasonable, out-of-pocket, expenses (including reasonable counsel fees and expenses) as they are incurred in connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such Indemnified Person is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on behalf of Counterparty. Counterparty also agrees that no Indemnified Person shall have any liability to Counterparty or any person asserting claims on behalf of or in right of Counterparty in connection with or as a result of any matter referred to in this Confirmation except to the extent that any losses, claims, damages, liabilities or expenses incurred by Counterparty result from such Indemnified Person’s breach of any covenant, representation or other obligation in this Confirmation or the ISDA Form or from the gross negligence, willful misconduct or bad faith of the Indemnified Person or breach of any U.S. federal or state securities laws or the rules, regulations or applicable interpretations of the Commission. The provisions of this paragraph shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and/or delegation of the Transaction made pursuant to the ISDA Form or this Confirmation shall inure to the benefit of any permitted assignee of Seller. |
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| (e) | Amendments to Equity Definitions. |
| (i) | Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (i) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (ii) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the ISDA Form with respect to that Issuer.”; and |
| (ii) | Section 12.6(c)(ii) of the Equity Definitions is hereby amended by replacing the words “the Transaction will be cancelled,” in the first line with the words “Seller will have the right, which it must exercise or refrain from exercising, as applicable, in good faith acting in a commercially reasonable manner, to cancel the Transaction,”; |
| (f) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. |
| (g) | Attorney and Other Fees. Subject to clause (d) Indemnification (above), in the event of any legal action initiated by any party arising under or out of, in connection with or in respect of, this Confirmation or the Transaction, the prevailing party shall be entitled to reasonable and documented attorneys’ fees, costs and expenses incurred in such action, as determined and fixed by the court. |
| (h) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure. |
| (i) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be (a) a “securities contract” as defined in the Bankruptcy Code, in which case each payment and delivery made pursuant to the Transaction is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment,” within the meaning of Section 546 of the Bankruptcy Code, and (b) a “swap agreement” as defined in the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code and a “payment or other transfer of property” within the meaning of Sections 362 and 546 of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s right to liquidate, terminate and accelerate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the ISDA Form with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to otherwise constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. |
| (j) | Process Agent. For the purposes of Section 13(c) of the ISDA Form: |
Seller appoints as its Process Agent: None
Counterparty appoints as its Process Agent: None.
(k) Right of First Refusal. For the period beginning upon the Trade Date and ending on the six-month anniversary of the Valuation Date, Seller shall have the right, but not the obligation, in its sole discretion, to invest on the terms offered to Seller by Counterparty up to 33% of any future debt, equity, derivative or any other kind of financing of Counterparty, as legally permitted (each a “Covered Financing”). Seller will be provided at least ten (10) business day notice to invest in any Covered Financing. For the avoidance of doubt, Covered Financings shall not include any Equity Line of Credit.
(l) Lock-Up Agreements. Counterparty agrees all lock-up agreements as described in the Form of Lock-Up Agreement referenced in Counterparty’s Amendment No. 3 to Form S-4 filed on June 12, 2026 have remained and will remain in place and have not been and will not be amended until the Valuation Date.
[Signature page follows]
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Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation and returning it to us at your earliest convenience.
| Very truly yours, | ||
| METEORA SELECT TRADING OPPORTUNITIES MASTER, LP | ||
| By: | ||
| Name: | Vikas Mittal | |
| Title: | CIO/Managing Member of GP | |
| Subscriber | Maximum Number of Shares |
% |
| Meteora Select Trading Opportunities Master, LP | 4,100,000 | 100.0% |
| Total | 4,100,000 | 100.0% |
| Agreed and accepted by: | ||
| RIBBON ACQUISITION CORP. | ||
| By: | ||
| Name: | Angshuman (Bubai) Ghosh | |
| Title: | Chairman and Chief Executive Officer | |
|
DRC MEDICINE LTD. |
||
| By: | ||
| Name: | Narumi Okazaki | |
| Title: | President | |
JOINDER OF PUBCO
DRC Medicine Inc., a Delaware corporation (“PubCo”), hereby joins in and executes this Confirmation solely to acknowledge and agree that, effective upon the closing of the Business Combination, PubCo shall become, and shall be substituted for Ribbon Acquisition Corp. as, the “Counterparty” under this Confirmation, and shall assume and be bound by all of the rights, obligations and liabilities of the Counterparty hereunder in accordance with its terms.
| DRC MEDICINE INC. | ||
| By: | ||
| Name: | Narumi Okazaki | |
| Title: | Director | |
SCHEDULE A
FORM OF PRICING DATE NOTICE
Date: [●], 2026
To: Ribbon Acquisition Corp. (“Counterparty”)
Address: Central Park Tower LaTour Shinjuku Room 3001, 6-15-1 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023 Japan
Phone: +819085083462
From: Meteora Select Trading Opportunities Master, LP ( “Seller”)
Re: OTC Equity Prepaid Forward Transaction
1. This Pricing Date Notice supplements, forms part of, and is subject to the Confirmation Re: OTC Equity Prepaid Forward Transaction dated as of [●] (the “Confirmation”) between Counterparty and Seller, as amended and supplemented from time to time. All provisions contained in the Confirmation govern this Pricing Date Notice except as expressly modified below.
2. The purpose of this Pricing Date Notice is to confirm certain terms and conditions of the Transaction entered into between Seller and Counterparty pursuant to the Confirmation.
Pricing Date: [●], 2026
Number of Recycled Shares: [●]
Number of Additional Shares: [●]
Number of Shares: [●]
Exhibit 10.5
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into on September 2, 2026, by and among Ribbon Acquisition Corp., a Cayman Islands exempted company (the “Company”) and the undersigned subscriber (“Subscriber”).
WHEREAS, in connection with the Business Combination Agreement, dated as of June 30, 2025 (as may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), the Company, DRC Medicine Inc., a Delaware corporation (“PubCo”), DRC Merger Inc., a Delaware corporation and direct, wholly owned subsidiary of PubCo (“Merger Sub”), and DRC Medicine Ltd., a Japanese corporation (the “Target”) are entering into transactions (the “Transactions”), pursuant to which (i) PubCo and the Target will engage in a share exchange pursuant to which the Target will become a wholly owned subsidiary of PubCo (the “Share Exchange”), (ii) the Company will de-register as a Cayman Islands exempted company and domesticate as a Delaware corporation (the “Domestication”), and (iii) at the closing of the Transactions, the Company will merge with and into Merger Sub, with Merger Sub surviving the merger as a wholly owned subsidiary of PubCo (the “Merger”). Upon consummation of the Transactions, the Company’s securityholders will become securityholders of PubCo, and PubCo will be the public company resulting from the Transactions.
WHEREAS, prior to the consummation of the Transactions, certain stockholders of the Company elected to redeem public shares of the Company’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock” or the “Common Stock”), in connection with the special meeting of the stockholders of the Company to vote on the proposals relating to the Transactions set forth in the proxy statement (the “Proxy Statement”) included in the Registration Statement on Form S-4 (File No. 333-295712) filed with the U.S. Securities and Exchange Commission (the “Commission”) and declared effective on August 10, 2026, as amended from time to time (the total number of shares of Common Stock that are irrevocably and validly elected to be redeemed, the “Redeemed Shares”);
WHEREAS, pursuant to its Amended and Restated Memorandum and Articles of Association, adopted January 14, 2025, as amended from time to time (the “Articles of Association”), and as set forth in the Proxy Statement, the Company is, subject to certain exceptions, obligated to redeem (the “Redemption Obligation”) such Redeemed Shares from the Trust Account (as defined below) and pay for such Redeemed Shares the amount specified in Article 1 of the Articles of Association (the “Redemption Price”);
WHEREAS, in connection with the Transactions, Subscriber desires to subscribe for and purchase from the Company, prior to the Valuation Date, as defined in the Forward Purchase Agreement (as defined below), as Additional Shares, as defined in the Forward Purchase Agreement, that number of shares of Common Stock up to the Maximum Number of Shares as set forth in the Forward Purchase Agreement (the “Subscribed Shares”) for a purchase price of the Initial Price per share (the “Per Share Price” and the aggregate of such Per Share Price for all Subscribed Shares being referred to herein as the “Purchase Price”), less the number of Recycled Shares, as defined in the Forward Purchase Agreement, provided, however, that Subscriber shall not be required to purchase an amount of Shares such that following the issuance of Shares, its ownership would exceed 9.9% ownership of the total Shares outstanding immediately after giving effect to such issuance unless Subscriber at its sole discretion waives such 9.9% ownership limitation, and the Company desires to issue and sell to Subscriber the Subscribed Shares in consideration of the payment of the Purchase Price by or on behalf of Subscriber to the Company, all on the terms and subject to the conditions set forth herein; and
WHEREAS, the parties acknowledge and agree that any previously executed subscription agreement between the Company and Subscriber in connection with the transactions contemplated hereby has been terminated and cancelled and is void and of no further force or effect;
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
Section 1. Subscription. Subject to the terms and conditions hereof, Subscriber hereby agrees that at the Closing (as defined below), to irrevocably subscribe for and purchase from the Company, and the Company hereby agrees to issue and sell to Subscriber, the Subscribed Shares (such subscription and issuance, the “Subscription”).
Section 2. Closing.
(a) The consummation of the Subscription contemplated hereby (the “Closing”) shall occur on the closing date of the Transactions (the “Closing Date”) for those Subscribed Shares that the Forward Purchase Agreement provides will be purchased at such time, with such Closing occurring substantially concurrently with (but not before) the consummation of the Transactions and subject to the terms and conditions of this Subscription Agreement. The purchase of any additional Subscribed Shares as provided for by the Forward Purchase Agreement shall occur subsequently to the Closing Date following the delivery of a Pricing Date Notice.
(b) Promptly before the anticipated Closing Date, the Company shall deliver written notice to Subscriber (the “Closing Notice”) specifying (i) the anticipated Closing Date and (ii) the wire instructions for delivery of the Purchase Price to the Company. No later than one Business Day prior to the Closing Date as set forth in the Closing Notice, Subscriber shall provide the Pricing Date Notice as defined in the Forward Purchase Agreement and deliver the Purchase Price (subject to adjustment as described below) after netting for requirements as described in Prepayment of the Forward Purchase Agreement as it relates to Additional Shares, for the Subscribed Shares by wire transfer of United States dollars in immediately available funds to the account specified by the Company in the Closing Notice, and such funds shall be held by the Company in escrow, segregated from and not comingled with the other funds of the Company (and in no event will such funds be held in the Trust Account (as defined below)), until the Closing Date. Upon satisfaction (or, if applicable, waiver) of the conditions set forth in this Section 2, the Company shall deliver to Subscriber (i) on the Closing Date, the Subscribed Shares in book entry form, free and clear of any liens or other restrictions (other than those arising under this Subscription Agreement or applicable securities laws), in the name of Subscriber (or its nominee or custodian in accordance with its delivery instructions) (and the Purchase Price shall be released from escrow automatically and without further action by the Company or Subscriber), and (ii) as promptly as practicable after the Closing, evidence from the Company’s transfer agent of the issuance to Subscriber of the Subscribed Shares on and as of the Closing Date.
(c) In the event that the consummation of the Transactions does not occur within two Business Days after the anticipated Closing Date specified in the Closing Notice, unless otherwise agreed to in writing by the Company and Subscriber, the Company, shall promptly (but in no event later than three Business Days after the anticipated Closing Date specified in the Closing Notice) return the funds so delivered by Subscriber by wire transfer in immediately available funds to the account specified by Subscriber, and any book entries shall be deemed cancelled. Notwithstanding such return or cancellation (x) a failure to close on the anticipated Closing Date shall not, by itself, be deemed to be a failure of any of the conditions to Closing set forth in this Section 2 to be satisfied or waived on or prior to the Closing Date, and (y) unless and until this Subscription Agreement is terminated in accordance with Section 6 herein, Subscriber shall remain obligated to redeliver funds to the Company, as set forth in the Closing Notice, following the Company’s delivery to Subscriber of a new Closing Notice in accordance with this Section 2 and Subscriber and the Company shall remain obligated to consummate the Closing upon satisfaction of the conditions set forth in this Section 2 following the Company’s delivery to Subscriber of a new Closing Notice. For the purposes of this Subscription Agreement, “Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York, New York are open for the general transaction of business.
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(d) The obligations of Subscriber and the Company to consummate, or cause to be consummated, the transactions contemplated by this Subscription Agreement (including the Closing) are subject to the satisfaction or, if permitted by applicable law, waiver by the parties hereto, of the conditions that, on the Closing Date:
| (i) | no suspension of the listing of the Subscribed Shares on The Nasdaq Stock Market (the “Nasdaq”), or, to the Company’s knowledge, initiation or threatening of any proceedings for any of such purposes, shall have occurred or that will be cured by the effectiveness of a resale registration statement on Form S-1; |
| (ii) | all conditions precedent to the closing of the Transactions set forth in Article IX of the Business Combination Agreement shall have been satisfied (as determined by the parties to the Business Combination Agreement) or waived in writing by the person with the authority to make such waiver (other than those conditions which, by their nature, are to be satisfied at the closing of the Transactions pursuant to the Business Combination Agreement, but subject to the satisfaction of such conditions at such closing), and the closing of the Transaction shall be scheduled to occur concurrently with or immediately following the Closing; |
| (iii) | all conditions precedent to the execution of the forward purchase agreement entered into between the Company and Subscriber on the date hereof (the “Forward Purchase Agreement”), as defined within the Forward Purchase Agreement, have been satisfied or waived in writing by the person with the authority to make such waiver (other than those conditions which, by their nature, are to be satisfied at the closing of the Transactions pursuant to the Business Combination Agreement, but subject to the satisfaction of such conditions at such closing), and the closing of the Transaction shall be scheduled to occur concurrently with or immediately following the Closing; and |
| (iv) | no order or law issued by any court of competent jurisdiction or other governmental entity or other legal restraint or prohibition preventing the consummation of the transactions contemplated by this Subscription Agreement (including the Closing) shall be in effect. |
(e) The obligations of the Company to consummate, or cause to be consummated, the transactions contemplated by this Subscription Agreement (including the Closing) are subject to the satisfaction or, if permitted by applicable Law, waiver by the Company of the additional conditions that, on the Closing Date:
| (i) | except as otherwise provided under Section 2(e)(ii), all representations and warranties of Subscriber contained in this Subscription Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or any similar limitation set forth therein) in all respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect, which representations and warranties shall be true and correct in all respects) as of such earlier date), and consummation of the Closing shall constitute a reaffirmation by Subscriber of each of the representations, warranties and agreements of Subscriber contained in this Subscription Agreement as of the Closing Date, but without giving effect to consummation of the Transactions, or as of such earlier date, as applicable; |
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| (ii) | the representations and warranties of Subscriber contained in Section 4(w) of this Subscription Agreement shall be true and correct at all times on or prior to the Closing Date, and consummation of the Closing shall constitute a reaffirmation by Subscriber of such representations and warranties; and |
| (iii) | Subscriber shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing. |
(f) The obligations of Subscriber to consummate, or cause to be consummated, the transactions contemplated by this Subscription Agreement (including the Closing) are subject to the satisfaction or, if permitted by applicable Law, waiver by Subscriber of the additional conditions that, on the Closing Date:
| (i) | all representations and warranties of the Company contained in this Subscription Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or any similar limitation set forth therein) in all respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Company Material Adverse Effect, which representations and warranties shall be true and correct in all respects) as of such earlier date), and consummation of the Closing shall constitute a reaffirmation by the Company of each of the representations, warranties and agreements of the Company, respectively, contained in this Subscription Agreement as of the Closing Date, but without giving effect to consummation of the Transactions, or as of such earlier date, as applicable, except, in each case, where the failure of such representations and warranties to be true and correct (whether as of the Closing Date or such earlier date), taken as a whole, does not result in a Company Material Adverse Effect; |
| (ii) | the Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing; |
| (iii) | Reserved; and |
| (iv) | there shall have been no amendment or modification to the Business Combination Agreement after the date hereof that materially and adversely affects the Company or the Subscriber’s investment in the Company, other than amendments, waivers or modifications as expressly contemplated by and included in the terms of the Business Combination Agreement as of the date of its execution. |
(g) Prior to or at the Closing, Subscriber shall deliver to the Company all such other information as is reasonably requested in order for the Company to issue the Subscribed Shares to Subscriber, including, without limitation, the legal name of the person in whose name the Subscribed Shares are to be issued (or Subscriber’s nominee in accordance with its delivery instructions) and a duly completed and executed Internal Revenue Service Form W-9 or appropriate Form W-8.
(h) Notwithstanding anything to the contrary herein, from time to time following the Closing Date, Subscriber may subscribe for additional Subscribed Shares as replacement Additional Shares pursuant to the section of the Forward Purchase Agreement captioned “Application of Shares to Note Obligations” (each, a “Replacement Subscription”). With respect to each Replacement Subscription: (i) the number of shares of Common Stock subscribed for, together with all shares then included in the Number of Shares (as defined in the Forward Purchase Agreement), shall not exceed the Maximum Number of Shares, and Applied Shares (as defined in the Forward Purchase Agreement) shall be disregarded for purposes of any limitation hereunder measured by reference to shares previously subscribed for or issued hereunder; (ii) the purchase price per share shall be the Initial Price and shall be deemed satisfied and prepaid in full by set-off against a corresponding additional Prepayment Amount deemed paid by the Company to Subscriber under the Forward Purchase Agreement, no cash shall be payable by either party in respect thereof, and Sections 2(b) and 2(c) shall not apply to any Replacement Subscription; (iii) the conditions set forth in Sections 2(d)(ii) and 2(d)(iii) shall be deemed satisfied with respect to any Replacement Subscription occurring after the consummation of the Transactions; (iv) the Company shall issue and deliver the shares so subscribed to Subscriber in book-entry form, free and clear of any liens or other restrictions (other than those arising under applicable securities laws), within two (2) Business Days following delivery of Subscriber’s written subscription notice (which may be included in or accompany a Pricing Date Notice, as defined in the Forward Purchase Agreement); and (v) the shares so issued shall constitute Subscribed Shares and Additional Shares for all purposes of this Subscription Agreement (including Section 5) and the Forward Purchase Agreement.
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Section 3. Company Representations and Warranties. For purposes of this Section 3, the term “Company” shall refer to (i) the Company as of the date hereof, and (ii) for purposes of the representations contained in subsections (e), (f), (h), (k), (o), and (q) of this Section 3 and to the extent such representations and warranties are made as of the Closing Date, the combined company after giving effect to the Transaction as of the Closing Date. The Company represents and warrants to Subscriber that:
(a) The Company (i) is validly existing and in good standing under the laws of the Cayman Islands, (ii) has the requisite corporate power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations under this Subscription Agreement, and (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect. For purposes of this Subscription Agreement, a “Company Material Adverse Effect” means an event, change, development, occurrence, condition or effect (collectively “Effect”) that, individually or in the aggregate, (a) is or would reasonably be expected to be materially adverse to the business, financial condition or results of operations of the Company and its subsidiaries, taken as a whole; or (b) would reasonably be expected to prevent, materially impair or materially delay (x) the Company’s or any of its subsidiary’s performance of its or their obligations under this Subscription Agreement or the Business Combination Agreement or (y) consummation of the Transactions; provided, however, that, in the case of clause (a), none of the following shall be deemed to constitute, alone or in combination, or be taken into account in the determination of whether, there has been or will be a Company Material Adverse Effect: (1) any change or proposed change in or change in applicable law or GAAP (as defined below) (including, in each case, the interpretation thereof) after the date of this Subscription Agreement; (2) events or conditions generally affecting the industries or geographic areas in which the Company operates; (3) any downturn in general economic conditions, including changes in the credit, debt, securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets); (4) acts of war, sabotage, civil unrest or terrorism, or any escalation or worsening of any such acts of war, sabotage, civil unrest or terrorism, or changes in global, national, regional, state or local political or social conditions; (5) any hurricane, tornado, flood, earthquake, mudslide, wildfire, natural disaster, epidemic, disease outbreak, pandemic (including, for the avoidance of doubt, the novel coronavirus, SARS-CoV-2 or COVID-19 and all related strains and sequences) or other acts of God, (6) any actions taken or not taken by the Company as required by this Subscription Agreement, the Business Combination Agreement or any other agreement executed and delivered in connection with the Transactions and specifically contemplated by the Business Combination Agreement or (7) any Effect attributable to the announcement or execution, pendency, negotiation or consummation of the Transactions, except in the cases of clauses (1) through (3), to the extent that the Company is materially and disproportionately affected thereby as compared with other participants in the industry in which the Company operates.
(b) When issued pursuant to this Subscription Agreement, the Subscribed Shares have been duly authorized and, when issued and delivered to Subscriber (or its nominee or custodian in accordance with its delivery instructions) against full payment therefor in accordance with the terms of this Subscription Agreement, will be validly issued, fully paid and non-assessable, free and clear of all liens or other restrictions (but excluding the restrictions on transfer described in Section 4(e) of this Subscription Agreement with respect to the status of the Subscribed Shares as “restricted securities” pending their registration for resale under the Securities Act of 1933, as amended (the “Securities Act”)), and will not have been issued in violation of, or subject to, any preemptive or similar rights created under the Company’s governing and organizational documents, the laws of the Cayman Islands or the laws of the State of Delaware.
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(c) This Subscription Agreement has been duly authorized, validly executed and delivered by the Company, and assuming the due authorization, execution and delivery of the same by Subscriber, this Subscription Agreement shall constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(d) Assuming the accuracy of the representations and warranties of Subscriber set forth in Section 4 of this Subscription Agreement, the execution and delivery of this Subscription Agreement, the issuance and sale of the Subscribed Shares, the compliance by the Company with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, (ii) the organizational documents of the Company, or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Company Material Adverse Effect.
(e) Assuming the accuracy of the representations and warranties of Subscriber set forth in Section 4 of this Subscription Agreement, the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization (including any stock exchange on which the Common Stock will be listed (the “Stock Exchange”)) or other person in connection with the execution, delivery and performance of this Subscription Agreement (including, without limitation, the issuance of the Subscribed Shares by the Company), other than (i) filings required by applicable state securities laws, (ii) filings with the Commission, including the filing of the Registration Statement (as defined below) pursuant to Section 5 below, (iii) filings required by the Securities Act, Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules of the Commission, including the registration statement on Form S-4 with respect to the Transactions and the proxy statement/prospectus included therein, (iv) filings required by the Stock Exchange, including with respect to obtaining stockholder approval of the Transactions or if applicable the transactions contemplated under the Forward Purchase Agreement as provided under the Forward Purchase Agreement, (v) filings required to consummate the Transactions as provided under the Business Combination Agreement and the transactions contemplated under the Forward Purchase Agreement as provided under the Forward Purchase Agreement, (vi) the filing of notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if applicable, (vii) filings in connection with or as a result of the SEC Guidance (as defined below) and (viii) those the failure of which to obtain would not have a Company Material Adverse Effect.
(f) Except for such matters as have not had and would not reasonably be expected to have a Company Material Adverse Effect, there is no (i) suit, action, proceeding or arbitration before a governmental authority or arbitrator pending, or, to the knowledge of the Company, threatened in writing against the Company or (ii) judgment, decree, injunction, ruling or order of any governmental authority or arbitrator outstanding against the Company.
(g) Assuming the accuracy of Subscriber’s representations and warranties set forth in Section of this Subscription Agreement, no registration under the Securities Act or any state securities (or Blue Sky) laws is required for the offer and sale of the Subscribed Shares by the Company to Subscriber.
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(h) Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Subscribed Shares. The Subscribed Shares are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act or any state securities laws. Neither the Company nor any person acting on their behalf has, directly or indirectly, at any time within the past six months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Subscribed Shares as contemplated hereby or (ii) cause the offering of the Subscribed Shares pursuant to this Subscription Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any person acting on their behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Subscribed Shares, as contemplated hereby, to the registration provisions of the Securities Act.
(i) No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is applicable to the Company, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3) of the Securities Act is applicable.
(j) The Company is in all material respects in compliance with, and has not received any written communication from a governmental entity that alleges that the Company is not in compliance with, or is in default or violation of, the applicable provisions of (i) the Securities Act, (ii) the Exchange Act, (iii) the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, (iv) the rules and regulations of the Commission, and (v) the rules of the Stock Exchange. For the avoidance of doubt, this representation and warranty shall not apply to the extent any of the foregoing matters arise from or relate to the SEC Guidance (as defined below).
(k) When the Subscribed Shares are issued pursuant to this Subscription Agreement, the Common Stock will be eligible for clearing through The Depository Trust Company (the “DTC”), through its Deposit/Withdrawal At Custodian (“DWAC”) system, and the Company will be eligible and participating in the Direct Registration System (“DRS”) of DTC with respect to the Common Stock. The Company’s transfer agent will be a participant in DTC’s Fast Automated Securities Transfer Program. The Common Stock will not be, and will not have been at any time, subject to any DTC “chill,” “freeze” or similar restriction with respect to any DTC services, including the clearing of shares of Common Stock through DTC.
(l) No broker or finder is entitled to any brokerage or finder’s fee or commission solely in connection with the sale of the Subscribed Shares to Subscriber.
(m) The Company has timely made all filings required to be filed by it with the Commission, except as set forth in its filings with the Commission. As of their respective dates, each form, report, statement, schedule, prospectus, proxy, registration statement and other document required to be filed by the Company with the Commission prior to the date hereof (collectively, as amended and/or restated since the time of their filing, the “SEC Documents”) complied in all material respects with the requirements of the Securities Act and the Exchange Act, and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Documents, as of their respective dates (or if amended, restated, or superseded by a filing prior to the closing of the Transactions, on the date of such filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents (or if amended, restated, or superseded by a filing prior to the closing of the Transactions, on the date of such filing) comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments, and such consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”) (except as may be disclosed therein or in the notes thereto, and except that the unaudited financial statements may not contain all footnotes required by GAAP). A copy of each SEC Document is available to each Subscriber via the Commission’s EDGAR system. There are no material outstanding or unresolved comments in comment letters from the staff of the Division of Corporation Finance of the Commission with respect to any of the SEC Documents as of the date hereof. Notwithstanding the foregoing, this representation and warranty shall not apply to any statement or information in the SEC Documents that relates to (i) the topics referenced in the Commission’s “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies” on April 12, 2021 or (ii) the classification of shares of the Company’s common stock as permanent or temporary equity, (collectively, the “SEC Guidance”), and no correction, amendment or restatement of any of the Company’s SEC Documents due to the SEC Guidance shall be deemed to be a breach of any representation or warranty by the Company.
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(n) As defined and described in the Proxy Statement, the authorized capital stock of the Company (for purposes of this section 3(n), the “Parent”) consists of (i) 500,000 shares of preferred stock, with a par value of $0.0001 per share, and (ii) 29,500,000 shares of common stock with a par value of $0.0001 per share, consisting of 25,000,000 shares of authorized Parent Class A Shares (as defined in the Proxy Statement) and 4,500,000 Parent Class B Shares (as defined in the Proxy Statement). As of October 24, 2023, Parent has, issued and outstanding, (i) 604,629 Parent Units, (ii) 5,542,368 Parent Class A Shares (including 604,629 Parent Class A Shares not separated from Parent Units (as defined in the Proxy Statement)), (iii) 2,443,750 Parent Class B Shares, (iv) 10,273,875 Parent Rights (as defined in the Proxy Statement) (including 604,629 Parent Rights not separated from Parent Units), (v) 10,273,875 Parent Warrants (as defined in the Proxy Statement) (including 604,629 Parent Warrants not separated from Parent Units) and (vi) no Parent Preferred Share. Parent has reserved 5,136,937 Parent Class A Shares underlying Parent Warrants and 1,027,387 Parent Class A Shares underlying Parent Rights. All outstanding shares of the Parent’s Shares (as defined in the Proxy Statement) are duly authorized, validly issued, fully paid and non-assessable and are not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Delaware General Corporation Law (as amended, the “DGCL”), the Parent’s organizational documents or any contract to which the Parent is a party. None of the outstanding securities of the Parent has been issued in violation of any applicable securities laws. Except for wholly-owned subsidiaries formed in connection with the Transactions, as set forth in the Business Combination Agreement, as of the date hereof, the Company has no subsidiaries and does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated or unincorporated. There are no shareholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the Company or other equity interests in the Company, other than as contemplated by the Business Combination Agreement or as described in the SEC Documents. Except as described in the SEC Documents, there are no securities or instruments issued by or to which the Company is a party containing anti-dilution or similar provisions that will be triggered, and not fully waived by the holder of such securities or instruments pursuant to a written agreement or consent, by the issuance of the Subscribed Shares.
(o) Except for such matters as have not had and would not be reasonably likely to have a Company Material Adverse Effect, the Company is in compliance with all state and federal laws applicable to the conduct of its business. The Company has not received any written, or to its knowledge, other communication from a governmental entity that alleges that the Company is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect.
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(p) The Company is not, and immediately after receipt of payment for the Subscribed Shares and consummation of the Transactions, will not be, an “investment company” within the meaning of the Investment Company Act.
(q) The Company acknowledges that there have not been, and the Company hereby agrees that it is not relying on, any representations, warranties, covenants or agreements made to the Company by Subscriber, any of its affiliates or any control persons, officers, directors, employees, partners, agents or representatives, any other party to the Transactions or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of Subscriber set forth in this Subscription Agreement.
Section 4. Subscriber Representations and Warranties. Subscriber represents and warrants to the Company that:
(a) If Subscriber is a legal entity, Subscriber (i) has been duly formed and is validly existing and in good standing under the laws of its jurisdiction of formation or incorporation and (ii) has the requisite power and authority to enter into, and perform its obligations under, this Subscription Agreement. If Subscriber is an individual, Subscriber has the legal competence and capacity to enter into and perform its obligations under this Subscription Agreement.
(b) If Subscriber is an entity, this Subscription Agreement has been duly authorized, validly executed and delivered by Subscriber. If Subscriber is an individual, Subscriber’s signature is genuine and the signatory has the legal competence and capacity to execute this Subscription Agreement. Assuming the due authorization, execution and delivery of the same by the Company, this Subscription Agreement shall constitute the valid and legally binding obligation of Subscriber, enforceable against Subscriber in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(c) The purchase of the Subscribed Shares hereunder, the compliance by Subscriber with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Subscriber pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber is a party or by which Subscriber is bound or to which any of the property or assets of Subscriber is subject; (ii) if Subscriber is a legal entity, the organizational documents of Subscriber; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of its properties that in the case of clauses (i) and (iii), would reasonably be expected to have a Subscriber Material Adverse Effect. For purposes of this Subscription Agreement, a “Subscriber Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to Subscriber that, individually or in the aggregate, would reasonably be expected to materially impair or materially delay Subscriber’s performance of its obligations under this Subscription Agreement, including the purchase of the Subscribed Shares.
(d) Subscriber (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act), an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3), or (7) under the Securities Act), or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) satisfying the applicable requirements set forth on Annex A hereto, (ii) is acquiring the Subscribed Shares only for its own account and not for the account of others, or if Subscriber is subscribing for the Subscribed Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and Subscriber has sole investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Subscribed Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and has provided the Company with the requested information on Annex A following the signature page hereto). Subscriber is not an entity formed for the specific purpose of acquiring the Subscribed Shares.
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(e) Subscriber acknowledges and agrees that the Subscribed Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Subscribed Shares have not been registered under the Securities Act and that the Company is not required to register the Subscribed Shares except as set forth in Section 5 of this Subscription Agreement. Subscriber acknowledges and agrees that the Subscribed Shares may not be offered, resold, transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, (ii) pursuant to an applicable exemption from the registration requirements of the Securities Act, and, in each of clauses (i)-(ii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates or account entries representing the Subscribed Shares shall contain a restrictive legend to such effect. Subscriber acknowledges and agrees that the Subscribed Shares will be subject to these securities law transfer restrictions, and as a result of these transfer restrictions, Subscriber may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Subscribed Shares and may be required to bear the financial risk of an investment in the Subscribed Shares for an indefinite period of time. Subscriber acknowledges and agrees that the Subscribed Shares will not be immediately eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act (“ Rule 144”) until at least one year following the filing by the Company of certain required information with the Commission after the Closing Date. Subscriber acknowledges and agrees that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Subscribed Shares.
(f) Subscriber understands and agrees that Subscriber is purchasing the Subscribed Shares directly from the Company. Subscriber further acknowledges that there have not been, and Subscriber hereby agrees that it is not relying on, any representations, warranties, covenants or agreements made to Subscriber by the Company, Target or its subsidiaries (collectively, the “Acquired Companies”) or any of its or their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives, any other party to the Transactions or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of the Company set forth in this Subscription Agreement.
(g) In making its decision to purchase the Subscribed Shares, Subscriber has relied solely upon an independent investigation made by Subscriber and the Company’s representations in Section 3 of this Subscription Agreement. Subscriber has not relied on any statements or other information provided by Target concerning the Company, the Acquired Companies, the Subscribed Shares, or the Subscription. Subscriber acknowledges and agrees that Subscriber has had access to, has received, and has had an adequate opportunity to review, such information as Subscriber deems necessary in order to make an investment decision with respect to the Subscribed Shares, including with respect to the Company, the Acquired Companies and the Transactions, and Subscriber has made its own assessment and is satisfied concerning the relevant financial, tax and other economic considerations relevant to Subscriber’s investment in the Subscribed Shares. Without limiting the generality of the foregoing, Subscriber acknowledges that it has reviewed the Company’s filings with the Commission. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Subscribed Shares, including but not limited to information concerning the Company, the Acquired Companies, the Business Combination Agreement, the Forward Purchase Agreement and the Subscription.
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(h) Subscriber acknowledges that certain information provided by the Company was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. Subscriber further acknowledges that the information provided to Subscriber was preliminary and subject to change, including in any supplements or amendments to the Proxy Statement filed with the Commission or other current or periodic reports or other filings filed with the Commission by the Company under the Securities Act or the Exchange Act related to the Transactions (which may or will include substantial additional information about the Company, Acquired Companies and the Transactions and will update and supersede the information previously provided or made available to Subscriber as of the date hereof).
(i) Subscriber acknowledges and agrees that none of the Acquired Companies nor their respective affiliates or any of such person’s or its or their respective affiliates’ control persons, officers, directors, partners, members, managing members, managers, agents, employees or other representatives, legal counsel, financial advisors, accountants or agents (collectively, “Representatives”) has provided Subscriber with any information or advice with respect to the Subscribed Shares nor is such information or advice necessary or desired. None of the Acquired Companies or any of their respective affiliates or Representatives has made or makes any representation as to the Company, Target or the Acquired Companies or the quality or value of the Subscribed Shares.
(j) Subscriber acknowledges that (i) the Company currently has, and later may come into possession of, information regarding the Company that is not known to Subscriber and that may be material to its determination to enter into this Subscription Agreement (“Excluded Information”), (ii) Subscriber has determined to enter into this Subscription Agreement to purchase the Subscribed Shares notwithstanding Subscriber’s lack of knowledge of the Excluded Information, and (iii) none of the Company or the Acquired Companies shall have liability to Subscriber, and Subscriber hereby waives and releases any claims Subscriber may have against the Company or the Acquired Companies, to the maximum extent permitted by law, with respect to the nondisclosure of the Excluded Information.
(k) Subscriber became aware of this offering of the Subscribed Shares solely by means of direct contact between Subscriber and the Company and its affiliates, and the Subscribed Shares were offered to Subscriber solely by direct contact between Subscriber and the Company or its affiliates. Subscriber did not become aware of this offering of the Subscribed Shares, nor were the Subscribed Shares offered to Subscriber, by any other means. Subscriber acknowledges that the Subscribed Shares (i) were not offered by any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
(l) Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Subscribed Shares, including those set forth in the SEC Documents. Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Subscribed Shares, and Subscriber has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as Subscriber has considered necessary to make an informed investment decision. Subscriber acknowledges and agrees that neither the Company nor any of its affiliates has provided any tax advice to Subscriber or made any representations or warranties or guarantees to Subscriber regarding the tax treatment of its investment in the Subscribed Shares. Subscriber (i) is an institutional account as defined in FINRA Rule 4512(c) or an “accredited investor” as defined in Rule 501(a) under the Securities Act, (ii) is a sophisticated investor, experienced in investing in private equity transactions and current or former special purpose acquisition companies and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, and (iii) has exercised independent judgment in evaluating its participation in the purchase of the Subscribed Shares.
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(m) Subscriber has analyzed and fully considered the risks of an investment in the Subscribed Shares and determined that the Subscribed Shares are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Company. Subscriber acknowledges specifically that a possibility of total loss exists.
(n) Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Subscribed Shares or made any findings or determination as to the fairness of this investment.
(o) Neither Subscriber nor any of its affiliates, officers, directors, managers, managing members, general partners or any other person acting in a similar capacity or carrying out a similar function is (i) a person (including individual or entity) that is the target of economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by relevant governmental authorities, including, but not limited to those administered by the U.S. government through the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State, the United Nations Security Council, the European Union, or His Majesty’s Treasury of the United Kingdom (collectively, “Sanctions”), (ii) a person or entity listed on the List of Specially Designated Nationals and Blocked Persons administered by OFAC, or in any Executive Order issued by the President of the United States and administered by OFAC, or any other any Sanctions-related list of sanctioned persons maintained by OFAC, the Department of Commerce or the U.S. Department of State, the United Nations Security Council, the European Union, any EU member state, or the United Kingdom (collectively, “ Sanctions Lists”), (iii) organized, incorporated, established, located, resident or a citizen, national, or the government, including any political subdivision, agency, or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, Venezuela, Afghanistan, the Crimea, the so-called Donetsk People’s Republic, or the so-called Luhansk People’s Republic regions of Ukraine, or any other country or territory embargoed or subject to substantial trade restrictions by the United States, the European Union or any individual European Union member state, or the United Kingdom; (iv) directly or indirectly owned or controlled 50% or more by, or acting on behalf of, any such person or persons described in any of the foregoing clauses (i) through (iv); or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, (i) through (v), a “Prohibited Investor”). Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law; provided that Subscriber is permitted to do so under applicable law. Subscriber represents that (i) if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Subscriber maintains policies and procedures to ensure compliance with its obligations under the BSA/PATRIOT Act, and (ii) to the extent required, it maintains policies and procedures reasonably designed to ensure compliance with the anti-money laundering-related laws administered and enforced by other governmental authorities. Subscriber also represents that it maintains policies and procedures reasonably designed to ensure compliance with Sanctions. Subscriber further represents and warrants that (i) none of the funds held by Subscriber and used to purchase the Shares are or will be derived from transactions with or for the benefit of any Prohibited Investor, and (ii) it maintains policies and procedures reasonably designed to ensure the funds held by Subscriber and used to purchase the Shares were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.
(p) No foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest in the Company as a result of the purchase and sale of Subscribed Shares hereunder, and no foreign person will have control (as defined in 31 C.F.R. Part 800.208) over the Company from and after the Closing as a result of the purchase and sale of Subscribed Shares hereunder.
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(q) If Subscriber is an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, Subscriber represents and warrants that (i) it has not relied on the Company or any of their respective affiliates (the “Transaction Parties”) for investment advice or as the Plan’s fiduciary with respect to its decision to acquire and hold the Subscribed Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Subscribed Shares and (ii) the acquisition and holding of the Subscribed Shares will not result in a non-exempt prohibited transaction under ERISA or section 4975 of the Code.
(r) Subscriber has or has commitments to have and, when required to deliver payment pursuant to Section 2, Subscriber will have sufficient funds to pay the Purchase Price pursuant to Section 2.
(s) Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Company, Target, the Acquired Companies or any of their respective affiliates or Representatives), other than the representations and warranties of the Company contained in Section 3 of this Subscription Agreement, in making its investment or decision to invest in the Company. Subscriber agrees that none of (i) any other agreement related to the private placement of shares of Common Stock (including with the controlling persons, officers, directors, partners, agents or employees of any such Subscriber) nor (ii) the Company, the Acquired Companies or any of their respective affiliates or Representatives, shall be liable (including, without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by Subscriber, the Company, or any other person or entity), whether in contract, tort or otherwise, or have any liability or obligation to Subscriber, or any person claiming through Subscriber, pursuant to this Subscription Agreement or related to the private placement of the Subscribed Shares, the negotiation hereof or the subject matter hereof, or the transactions contemplated hereby, for any action heretofore or hereafter taken or omitted to be taken by any of the foregoing in connection with the purchase of the Subscribed Shares.
(t) No broker or finder is entitled to any brokerage or finder’s fee or commission to be paid by Subscriber solely in connection with the sale of the Subscribed Shares to Subscriber.
(u) At all times on or prior to the Closing Date, Subscriber has no binding commitment to dispose of, or otherwise transfer (directly or indirectly), any of the Subscribed Shares.
(v) Except as expressly disclosed in a Schedule 13D or Schedule 13G (or amendments thereto) filed by Subscriber with the Commission with respect to the beneficial ownership of the Company’s outstanding securities prior to the date hereof, Subscriber is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of equity securities of the Company (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).
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(w) Subscriber acknowledges its obligations under applicable securities laws with respect to the treatment of non-public information relating to the Company and Target.
(x) Subscriber acknowledges that any restatement, revision, correction or other modification of the SEC Documents to the extent resulting from the SEC Guidance shall not constitute a breach by the Company of this Subscription Agreement.
(y) Subscriber acknowledges having received and read the Risk Factors (as defined below) included in the Proxy Statement with respect to the Transactions and the Company’s other SEC Documents (the “Risk Factors”).
Section 5. Registration of Subscribed Shares.
(a) Subject to Section 5.01(c), the Company agrees that, within thirty calendar days following the Closing Date, the Company will file with the Commission (at the Company’s sole cost and expense) a registration statement registering the resale of the Subscribed Shares (the “Registration Statement”), and the Company shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but in any event no later than sixty calendar days after the Closing Date (the “Effectiveness Deadline”); provided, that the Effectiveness Deadline shall be extended to ninety calendar days after the Closing Date if the Registration Statement is reviewed by, and comments thereto are provided from, the Commission; provided, further that the Company shall have the Registration Statement declared effective within five Business Days after the date the Company is notified (orally or in writing, whichever is earlier) by the staff of the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review; provided, further, that (i) if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business and (ii) if the Commission is closed for operations due to a government shutdown, the Effectiveness Deadline shall be extended by the same number of Business Days that the Commission remains closed for. Unless otherwise agreed to in writing by Subscriber prior to the filing of the Registration Statement, Subscriber shall not be identified as a statutory underwriter in the Registration Statement; provided, that if the Commission requests that Subscriber be identified as a statutory underwriter in the Registration Statement, Subscriber will have the opportunity to withdraw from the Registration Statement upon its prompt written request to the Company. Notwithstanding the foregoing, if the Commission prevents the Company from including any or all of the shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Subscribed Shares by the applicable stockholders or otherwise, such Registration Statement shall register for resale such number of Subscribed Shares which is equal to the maximum number of Subscribed Shares as is permitted by the Commission. In such event, the number of Subscribed Shares or other shares to be registered for each selling stockholder named in the Registration Statement shall be reduced pro rata, unless otherwise directed in writing by a selling stockholder as to its securities to register fewer securities, among all such selling stockholders (except that such pro rata reduction shall not apply with respect to any securities the registration of which is necessary to satisfy applicable listing rules of a national securities exchange) and as promptly as practicable after being permitted to register additional shares under Rule 415 under the Securities Act, the Company shall use its commercially reasonable efforts to amend the Registration Statement or file one or more new Registration Statement(s) (such amendment or new Registration Statement shall also be deemed to be a “Registration Statement” hereunder) to register such additional Subscribed Shares and cause such amendment or Registration Statement(s) to become effective as promptly as practicable after the filing thereof, but in any event no later than thirty calendar days after the filing of such Registration Statement (the “Additional Effectiveness Deadline”); provided, that the Additional Effectiveness Deadline shall be extended to ninety calendar days (or one hundred twenty calendar days if the Commission notifies the Company that it will “review” such Registration Statement) after the filing of such Registration Statement if such Registration Statement is reviewed by, and comments thereto are provided from, the Commission; provided, further, that the Company shall have such Registration Statement declared effective within five Business Days after the date the Company is notified (orally or in writing, whichever is earlier) by the staff of the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review; provided, further, that (i) if such day falls on a Saturday, Sunday or other day that the Commission is closed for business, the Additional Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business and (ii) if the Commission is closed for operations due to a government shutdown, the Effectiveness Deadline shall be extended by the same number of Business Days that the Commission remains closed for. Any failure by the Company to file a Registration Statement by the Effectiveness Deadline or Additional Effectiveness Deadline shall not otherwise relieve the Company of its obligations to file or effect a Registration Statement as set forth in this Section 5.
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(b) The Company agrees that, except for such times as the Company is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, the Company will use its commercially reasonable efforts to cause such Registration Statement to remain effective with respect to Subscriber, including to prepare and file any post-effective amendment to such Registration Statement or a supplement to the related prospectus such that the prospectus will not include any untrue statement or a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, until the earliest to occur of (i) the date on which Subscriber ceases to hold any Subscribed Shares issued pursuant to this Subscription Agreement and (ii) the first date on which Subscriber can sell all of its Subscribed Shares issued pursuant to this Subscription Agreement (or shares received in exchange therefor) under Rule 144 of the Securities Act without limitation as to the manner of sale or the amount of such securities that may be sold (the earliest of clauses (i) and (ii), the “End Date”). Prior to the End Date, the Company will use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable; file all reports, and provide all customary and reasonable cooperation, necessary to enable Subscriber to resell Subscribed Shares pursuant to the Registration Statement; qualify the Subscribed Shares for listing on the applicable stock exchange on which the Common Stock is then listed and update or amend the Registration Statement as necessary to include Subscribed Shares. The Company will use its commercially reasonable efforts to (A) for so long as Subscriber holds Subscribed Shares, make and keep public information available (as those terms are understood and defined in Rule 144) and file with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act so long as the Company remains subject to such requirements to enable Subscriber to resell the Subscribed Shares pursuant to Rule 144, (B) at the reasonable request of Subscriber, deliver all the necessary documentation to cause the Company’s transfer agent to remove all restrictive legends from any Subscribed Shares being sold under the Registration Statement or pursuant to Rule 144 at the time of sale of the Subscribed Shares, or that may be sold by Subscriber without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions, and (C) cause its legal counsel to deliver to the transfer agent the necessary legal opinions required by the transfer agent, if any, in connection with the instruction under clause (B) upon the receipt of Subscriber representation letters and such other customary supporting documentation as requested by (and in a form reasonably acceptable to) such counsel. Subscriber agrees to disclose its beneficial ownership, as determined in accordance with Rule 13d-3 of the Exchange Act, of Subscribed Shares to the Company (or its successor) upon reasonable request to assist the Company in making the determination described above.
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(c) The Company’s obligations to include the Subscribed Shares in the Registration Statement are contingent upon Subscriber furnishing in writing to the Company a completed selling stockholder questionnaire in customary form that contains such information regarding Subscriber, the securities of the Company held by Subscriber and the intended method of disposition of the Subscribed Shares as shall be reasonably requested by the Company to effect the registration of the Subscribed Shares, and Subscriber shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling stockholder in similar situations, including providing that the Company shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement (i) during any customary blackout or similar period or as permitted hereunder and (ii) as may be necessary in connection with the preparation and filing of a post-effective amendment to the Registration Statement following the filing of the Company’s Annual Report on Form 10-K for its first completed fiscal year following the effective date of the Registration Statement; provided, that the Company shall request such information from Subscriber, including the selling stockholder questionnaire, at least five calendar days prior to the anticipated date of filing the Registration Statement with the Commission. In the case of the registration effected by the Company pursuant to this Subscription Agreement, the Company shall, upon reasonable request, inform Subscriber as to the status of such registration. Subscriber shall not be entitled to use the Registration Statement for an underwritten offering of Subscribed Shares. Notwithstanding anything to the contrary contained herein, the Company may delay or postpone filing of such Registration Statement, and from time to time require Subscriber not to sell under the Registration Statement or suspend the use or effectiveness of any such Registration Statement if (A) it determines in good faith that in order for the registration statement to not contain a material misstatement or omission, an amendment thereto would be needed, (B) such filing or use would materially affect a bona fide business or financing transaction of the Company or would require premature disclosure of information that would materially adversely affect the Company, or (C) in the good faith judgment of the majority of the members of the Company’s board of directors, such filing or effectiveness or use of such Registration Statement would be seriously detrimental to the Company, or (D) the majority of the board determines to delay the filing or initial effectiveness of, or suspend use of, a Registration Statement and such delay or suspension arises out of, or is a result of, or is related to or is in connection with the SEC Guidance or future Commission guidance directed at special purpose acquisition companies, or any related disclosure or related matters (each such circumstance, a “Suspension Event”); provided, that, (w) the Company shall not so delay filing or so suspend the use of the Registration Statement for a period of more than sixty consecutive days or more than one hundred twenty total calendar days, or more than three times in any three hundred sixty day period and (x) the Company shall use commercially reasonable efforts to make such registration statement available for the sale by Subscriber of such securities as soon as practicable thereafter.
(d) Upon receipt of any written notice from the Company (which notice shall not contain any material non-public information regarding the Company) of the happening of (i) an issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose, which notice shall be given no later than three Business Days from the date of such event, (ii) any Suspension Event during the period that the Registration Statement is effective, which notice shall be given no later than three Business Days from the date of such Suspension Event, or (iii) if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, Subscriber agrees that (1) it will immediately discontinue offers and sales of the Subscribed Shares under the Registration Statement until Subscriber receives copies of a supplemental or amended prospectus (which the Company agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales and (2) it will maintain the confidentiality of any information included in such written notice delivered by the Company unless otherwise required by law, subpoena or regulatory request or requirement. If so directed by the Company, Subscriber will deliver to the Company or, in Subscriber’s sole discretion destroy, all copies of the prospectus covering the Subscribed Shares in Subscriber’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Subscribed Shares shall not apply (w) to the extent Subscriber is required to retain a copy of such prospectus (A) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (B) in accordance with a bona fide pre-existing document retention policy or (x) to copies stored electronically on archival servers as a result of automatic data back-up.
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(e) For purposes of this Section 5 of this Subscription Agreement, (i) “Subscribed Shares” shall mean, as of any date of determination, the Subscribed Shares (as defined in the recitals to this Subscription Agreement) and any other equity security issued or issuable with respect to the Subscribed Shares by way of stock split, dividend, distribution, recapitalization, merger, exchange, or replacement, and (ii) “Subscriber” shall include any person to which the rights under this Section 5 shall have been duly assigned.
(f) The Company shall, notwithstanding any termination of this Subscription Agreement, indemnify, defend and hold harmless Subscriber, (to the extent Subscriber is a seller under the Registration Statement), the officers, directors, members, managers, partners, agents and employees of Subscriber, each person who controls Subscriber (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, managers, partners, agents and employees of each such controlling person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable and documented attorneys’ fees) and expenses (collectively, “Losses”) arising out of or caused by or based upon (i) any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any prospectus included in the Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, or (ii) any violation or alleged violation by the Company of the Securities Act, Exchange Act or any state securities law or any rule or regulation thereunder, in connection with the performance of its obligations under this Section 5, except, in each case, to the extent that such untrue statements, alleged untrue statements, omissions or alleged omissions are (1) based upon information regarding Subscriber furnished in writing to the Company by or on behalf of Subscriber expressly for use therein or Subscriber has omitted a material fact from such information or (2) result from or in connection with any offers or sales effected by or on behalf of Subscriber in violation of Section 5(d). Notwithstanding the foregoing, the Company’s indemnification obligations shall not apply to amounts paid in settlement of any Losses or action if such settlement is effected without the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed). Upon the request of Subscriber, the Company shall provide Subscriber with an update on any threatened or asserted proceedings arising from or in connection with the transactions contemplated by this Section 5 of which the Company receives notice in writing.
(g) Subscriber shall indemnify and hold harmless the Company, its directors, officers, members, managers, partners, agents and employees, each person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, members, managers, partners, agents or employees of such controlling persons, to the fullest extent permitted by applicable law, from and against all Losses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any prospectus included in the Registration Statement, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding Subscriber furnished in writing to the Company by or on behalf of Subscriber expressly for use therein. In no event shall the liability of Subscriber be greater in amount than the dollar amount of the net proceeds received by Subscriber upon the sale of the Subscribed Shares giving rise to such indemnification obligation. Notwithstanding the forgoing, Subscriber’s indemnification obligation shall not apply to amounts paid in settlement of any Losses or action if such settlement is effected without the prior written consent of Subscriber (which consent shall not be unreasonably withheld or delayed) nor shall Subscriber be liable for any Losses to the extent they arise out of or are based upon a violation which occurs in reliance upon and in conformity with written information furnished by the Company.
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(h) Any person or entity entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s or entity’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement), which settlement shall not include a statement or admission of fault and culpability on the part of such indemnified party, and which settlement shall include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
(i) The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person or entity of such indemnified party and shall survive the transfer of the Subscribed Shares pursuant to this Subscription Agreement.
(j) If the indemnification provided under this Section 5 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any Losses, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations; provided, however, that the liability of Subscriber shall be limited to the net proceeds received by such Subscriber from the sale of Subscribed Shares giving rise to such indemnification obligation. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by, in the case of an omission), or on behalf of such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses shall be deemed to include, subject to the limitations set forth in this Section 5, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 5(j) from any person or entity who was not guilty of such fraudulent misrepresentation. Notwithstanding anything to the contrary herein, in no event will any party be liable for punitive damages in connection with this Subscription Agreement or the transactions contemplated hereby.
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Section 6. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of (a) such date and time as the Business Combination Agreement is terminated in accordance with its terms and (b) the mutual written agreement of the parties hereto to terminate this Subscription Agreement; provided, that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Company shall notify Subscriber of the termination of the Business Combination Agreement promptly after the termination thereof. Upon the termination hereof in accordance with this Section 6, any monies paid by Subscriber to the Company in connection herewith shall promptly (and in any event within one Business Day) be returned in full to Subscriber by wire transfer of U.S. dollars in immediately available funds to the account specified by Subscriber, without any deduction for or on account of any tax withholding, charges or set-off, whether or not the Transactions shall have been consummated.
Section 7. Trust Account Waiver. Subscriber hereby acknowledges that, as described in the Company’s prospectus relating to its initial public offering (the “IPO”) dated January 15, 2025 available at www.sec.gov, the Company has established a trust account (the “Trust Account”) containing the proceeds of the IPO and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the Company, its public stockholders and certain other parties (including the underwriters of the IPO), and that, except as otherwise described in such prospectus, the Company may disburse monies from the Trust Account only to (x) its public stockholders in the event they elect to have their shares of Common Stock redeemed for cash in connection with the consummation of the Company’s initial business combination, an amendment to its Articles of Association to extend the deadline by which the Company must consummate its initial business combination, or the Company’s failure to consummate an initial business combination by such deadline, (y) pay certain taxes from time to time, or (z) the Company after or concurrently with the consummation of its initial business combination. For and in consideration of the Company entering into this Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Subscriber, on behalf of itself and its affiliates, hereby (a) agrees that it does not now and shall not at any time hereafter have any right, title, interest or claim of any kind in or to any assets held in the Trust Account, and shall not make any claim against the Trust Account, arising out or as a result of, in connection with or relating in any way to this Subscription Agreement, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Released Claims”), (b) irrevocably waives any Released Claims that it may have against the Trust Account now or in the future as a result of, or arising out of, this Subscription Agreement, and (c) will not seek recourse against the Trust Account as a result of, in connection with or relating in any way to this Subscription Agreement. Subscriber acknowledges and agrees that such irrevocable waiver is a material inducement to the Company to enter into this Subscription Agreement, and further intends and understands such waiver to be valid, binding, and enforceable against Subscriber in accordance with applicable law. To the extent Subscriber commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to the Company or its Representatives, which proceeding seeks, in whole or in part, monetary relief against the Company or its Representatives, Subscriber hereby acknowledges and agrees that its sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit Subscriber (or any person claiming on Subscriber’s behalf or in lieu of Subscriber) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. Nothing in this Section 7 shall be deemed to limit Subscriber’s right to distributions from the Trust Account in accordance with the Company’s Articles of Association in respect of any redemptions by Subscriber in respect of Common Stock acquired by any means other than pursuant to this Subscription Agreement, subject to the Forward Purchase Agreement. Notwithstanding anything in this Subscription Agreement to the contrary, the provisions of this Section 7 shall survive termination of this Subscription Agreement.
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Section 8. Miscellaneous.
(a) All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) when sent by electronic mail, with no mail undeliverable or other rejection notice, on the date of transmission to such recipient, if sent on a Business Day prior to 5:00 p.m. New York City time, or on the Business Day following the date of transmission, if sent on a day that is not a Business Day or after 5:00 p.m. New York City time on a Business Day, (iii) one Business Day after being sent to the recipient via overnight mail by reputable overnight courier service (charges prepaid), or (iv) four Business Days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and, in each case, addressed to the intended recipient at its address specified on the signature page hereof or to such electronic mail address or address as subsequently modified by written notice given in accordance with this Section 8(a). A courtesy electronic copy of any notice sent by methods (i), (iii), or (iv) above shall also be sent to the recipient via electronic mail if an electronic mail address is provided in the applicable signature page hereof or to an electronic mail address as subsequently modified by written notice given in accordance with this Section 8(a).
(b) Subscriber acknowledges that the Company and others, including after the Closing, Target, will rely on the acknowledgments, understandings, agreements, representations and warranties of Subscriber contained in this Subscription Agreement; provided, however, that the foregoing clause of this Section 8(b) shall not give the Company or Target any rights other than those expressly set forth herein. Prior to the Closing, Subscriber agrees to promptly notify the Company if it becomes aware that any of the acknowledgments, understandings, agreements, representations and warranties of Subscriber set forth herein are no longer accurate in all material respects. The Company acknowledges that Subscriber will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, the Company agrees to promptly notify Subscriber if they become aware that any of the acknowledgments, understandings, agreements, representations and warranties of the Company set forth herein are no longer accurate in all material respects.
(c) Each of the Company and Subscriber is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
(d) Each party hereto shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated herein.
(e) Neither this Subscription Agreement nor any rights that may accrue to Subscriber hereunder (other than the Subscribed Shares acquired hereunder and the rights set forth in Section 5) may be transferred or assigned by Subscriber. Neither this Subscription Agreement nor any rights that may accrue to the Company hereunder may be transferred or assigned by the Company without the prior written consent of Subscriber, other than in connection with the Transactions. Notwithstanding the foregoing, Subscriber may assign all or a portion of its rights and obligations under this Subscription Agreement to one or more of its affiliates (including other investment funds or accounts managed or advised by the investment manager who acts on behalf of Subscriber) upon written notice to the Company or, with the Company’s prior written consent, to another person; provided, that in the case of any such assignment, the assignee(s) shall become a Subscriber hereunder and have the rights and obligations and be deemed to make the representations and warranties of Subscriber provided for herein to the extent of such assignment and provided further that no such assignment shall relieve the assigning Subscriber of its obligations hereunder if any such assignee fails to perform such obligations, unless the Company has given their prior written consent to such relief.
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(f) All the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Closing.
(g) The Company may request from Subscriber such additional information as the Company may reasonably deem necessary to evaluate the eligibility of Subscriber to acquire the Subscribed Shares and to register the Subscribed Shares for resale, and Subscriber shall promptly provide such information as may be reasonably requested, to the extent readily available and to the extent consistent with its internal policies and procedures; provided, that the Company agrees to keep any such information provided by Subscriber confidential, except (A) as required by the federal securities laws, rules or regulations and (B) to the extent such disclosure is required by other laws, rules or regulations, at the request of the staff of the Commission or regulatory agency or under the regulations of the Stock Exchange. Subscriber acknowledges that the Company may file a form of this Subscription Agreement with the Commission as an exhibit to a current or periodic report of the Company, a proxy statement of the Company or a registration statement of the Company.
(h) This Subscription Agreement may not be amended, modified or waived except by an instrument in writing, signed by each of the parties hereto.
(i) This Subscription Agreement, together with the Forward Purchase Agreement, shall constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof.
(j) Except as otherwise provided herein, this Subscription Agreement is intended for the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. Except as set forth in Section 4, Section 5, Section 6, Section 8(b), Section 8(c), Section 8(e), Section 8(h) and this Section 8(j) with respect to the persons specifically referenced therein, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successors and assigns.
(k) The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached and that money or other legal remedies would not be an adequate remedy for such damage. It is accordingly agreed that the parties shall be entitled to equitable relief, including in the form of an injunction or injunctions to prevent breaches or threatened breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise. The parties hereto acknowledge and agree that the Company shall be entitled to specifically enforce Subscriber’s obligations to fund the Subscription and the provisions of the Subscription Agreement, in each case, on the terms and subject to the conditions set forth herein. The parties hereto further acknowledge and agree: (x) to waive any requirement for the security or posting of any bond in connection with any such equitable remedy; (y) not to assert that a remedy of specific enforcement pursuant to this Section 8(k) is unenforceable, invalid, contrary to applicable law or inequitable for any reason; and (z) to waive any defenses in any action for specific performance, including the defense that a remedy at law would be adequate.
(l) If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
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(m) No failure or delay by a party hereto in exercising any right, power or remedy under this Subscription Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party. No single or partial exercise of any right, power or remedy under this Subscription Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this Subscription Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.
(n) This Subscription Agreement may be executed and delivered in one or more counterparts (including by electronic mail, in .pdf or other electronic submission) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
(o) This Subscription Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the principles of conflicts of laws that would otherwise require the application of the law of any other state.
(p) EACH PARTY HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS SUBSCRIPTION AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SUBSCRIPTION AGREEMENT.
(q) The parties agree that all disputes, legal actions, suits and proceedings arising out of or relating to this Subscription Agreement must be brought exclusively in the federal and state courts located in the Borough of Manhattan in the City and State of New York (or, if the federal courts located in the Borough of Manhattan in the City and State of New York decline to accept jurisdiction over a particular matter, any state court located in the Borough of Manhattan in the City and State of New York) (collectively the “Designated Courts”). Each party hereby consents and submits to the exclusive jurisdiction of the Designated Courts. No legal action, suit or proceeding with respect to this Subscription Agreement may be brought in any other forum. Notwithstanding the foregoing, a final judgement in any such action may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereby irrevocably waives all claims of immunity from jurisdiction, and any objection which such party may now or hereafter have to the laying of venue of any suit, action or proceeding in any Designated Court, including any right to object on the basis that any dispute, action, suit or proceeding brought in the Designated Courts has been brought in an improper or inconvenient forum or venue. Each of the parties also agrees that delivery of any process, summons, notice or document to a party hereof in compliance with Section 8(a) of this Subscription Agreement shall be effective service of process for any action, suit or proceeding in a Designated Court with respect to any matters to which the parties have submitted to jurisdiction as set forth above.
(r) This Subscription Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Subscription Agreement, or the negotiation, execution or performance of this Subscription Agreement, may only be brought against the entities that are expressly named as parties hereto.
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(s) The Company shall, by 9:00 a.m., New York City time, on the first Business Day immediately following the date of this Subscription Agreement, file with the Commission a Current Report on Form 8-K (the “Disclosure Document”) disclosing all material terms of this Subscription Agreement and the transactions contemplated hereby and thereby, the Transactions and any other material, nonpublic information that the Company has provided to Subscriber at any time prior to the filing of the Disclosure Document and including as exhibits to the Disclosure Document, the form of this Subscription Agreement (without redaction). Upon the issuance of the Disclosure Document, to the Company’s knowledge, Subscriber shall not be in possession of any material, non-public information received from the Company or any of its affiliates, officers, directors, or employees or agents, unless otherwise agreed by Subscriber. Notwithstanding anything in this Subscription Agreement to the contrary, each of the Company (i) shall not publicly disclose the name of Subscriber or any of its affiliates or advisers, or include the name of Subscriber or any of its affiliates or advisers in any press release, without the prior written consent of Subscriber and (ii) shall not publicly disclose the name of Subscriber or any of its affiliates or advisers, or include the name of Subscriber or any of its affiliates or advisers in any filing with the Commission or any regulatory agency or trading market, without the prior written consent of Subscriber, except (A) as required by the federal securities laws, rules or regulations and (B) to the extent such disclosure is required by other laws, rules or regulations, at the request of the staff of the Commission or regulatory agency or under the regulations of the Stock Exchange, in which case of clause (A) or (B), the Company, as applicable, shall provide Subscriber with prior written notice (including by e-mail) of such permitted disclosure, and shall reasonably consult with Subscriber regarding such disclosure. Subscriber will promptly provide any information reasonably requested by the Company for any regulatory application or filing made or approval sought in connection with the Transactions (including filings with the Commission).
(t) If any change in the Common Stock shall occur between the date of this Subscription Agreement and the Closing by reason of any reclassification, recapitalization, stock split, reverse stock split, combination, exchange, or readjustment of shares, or any share dividend, the number of Subscribed Shares issued to Subscriber hereunder shall be appropriately adjusted to reflect such change.
(u) The obligations of Subscriber under this Subscription Agreement are several and not joint with the obligations of any other investor, and Subscriber shall not be responsible in any way for the performance of the obligations of any other investor. The decision of Subscriber to purchase Subscribed Shares pursuant to this Subscription Agreement has been made by Subscriber independently of any other investor and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company, Target or any of their respective affiliates or subsidiaries which may have been made or given by any other investor or by any agent or employee of any other investor, and neither Subscriber nor any of its agents or employees shall have any liability to any other investor (or any other person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein, and no action taken by Subscriber or other investor pursuant hereto, shall be deemed to constitute Subscriber and any other investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that Subscriber and other investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Subscription Agreement. Subscriber acknowledges that no other person has acted as agent for Subscriber in connection with making its investment hereunder and no other person will be acting as agent of Subscriber in connection with monitoring its investment in the Subscribed Shares or enforcing its rights under this Subscription Agreement. Subscriber shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Subscription Agreement, and it shall not be necessary for any other investor to be joined as an additional party in any proceeding for such purpose.
(v) The headings herein are for convenience only, do not constitute a part of this Subscription Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Subscription Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rules of strict construction will be applied against any party. Unless the context otherwise requires, (i) all references to Sections, Schedules or Exhibits are to Sections, Schedules or Exhibits contained in or attached to this Subscription Agreement, (ii) each accounting term not otherwise defined in this Subscription Agreement has the meaning assigned to it in accordance with GAAP, (iii) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter, (iv) the use of the word “including” in this Subscription Agreement shall be by way of example rather than limitation, and (v) the word “or” shall not be exclusive.
(w) As requested by Subscriber and its auditors, Company shall provide sufficient information for purposes of audit confirmations.
[Signature pages follow.]
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IN WITNESS WHEREOF, the Company has accepted this Subscription Agreement as of the date first set forth above.
| RIBBON ACQUISITION CORP. | |||
| By: | |||
| Name: | Angshuman (Bubai) Ghosh | ||
| Title: | Chairman and Chief Executive Officer | ||
| Address for Notices:
Ribbon Acquisition Corp. Central Park Tower LaTour Shinjuku Room 3001 6-15-1 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023 Japan | ||
| Attention: Angshuman (Bubai) Ghosh | ||
| Email: [email protected] | ||
| with a copy (which shall not constitute notice) to: | ||
| Celine & Partners PLLC | ||
1185 6th Avenue, Suite 304 New York, NY 10036 | ||
Attn: Cassi Olson, Esq. Email: [email protected] | ||
JOINDER OF PUBCO | ||
| DRC Medicine Inc., a Delaware corporation (the “PubCo”), hereby joins in and executes this Subscription Agreement solely to acknowledge and agree that, effective upon the closing of the Transactions, PubCo shall become, and shall be substituted for Ribbon Acquisition Corp. as, the “Company” under this Subscription Agreement, and shall assume and be bound by all of the rights, obligations and liabilities of the Company hereunder in accordance with its terms, including the obligation to issue Subscribed Shares in respect of any subscription (including any Replacement Subscription) occurring after the closing of the Transactions and the registration obligations set forth in Section 5. |
| DRC MEDICINE INC. | ||
| By: | ||
| Name: | Narumi Okazaki | |
| Title: | Director | |
IN WITNESS WHEREOF, Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date set forth below.
Name of Subscriber:
Meteora Select Trading Opportunities Master, LP
| By: | ||
| Name: | Vik Mittal | |
| Title: | Managing Member of each General Partner |
Name in which Subscribed Shares are to be registered (if different): |
Date: September 2, 2026 |
| Subscriber | Entity Type | Address/ Domicile | EIN |
| Meteora Select Trading Opportunities Master, LP |
Limited Partnership |
71 Fort St, PO Box 500, Grand Cayman KY1106 |
98-1650436 |
| Attention: Meteora Capital, LLC | |
| Telephone No.: 212-207-0091 | |
| Email for notices: [email protected] | |
Number of Shares of Common Stock subscribed for: Maximum Number of Shares less the Recycled Shares |
Price Per Share: Initial Price |
| Subscriber | Maximum Number of Shares | % |
| Meteora Select Trading Opportunities Master, LP | 4,100,000 | 100.0% |
| Total | 4,100,000 | 100.0% |
ANNEX A
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER
This Annex A should be completed and signed by Subscriber
and constitutes a part of the Subscription Agreement.
| 1. | QUALIFIED INSTITUTIONAL BUYER STATUS (Please check the box, if applicable) |
| ☒ | Subscriber is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) (a “QIB”) |
| ☐ | We are subscribing for the Subscribed Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB. |
**OR**
| 2. | ACCREDITED INVESTOR STATUS (Please check the box) |
| ☐ | Subscriber is an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) or an entity in which all of the equity holders are accredited investors within the meaning of Rule 501(a) under the Securities Act, and has marked and initialed the appropriate box below indicating the provision under which it qualifies as an “accredited investor.” |
**AND**
| 3. | AFFILIATE STATUS |
(Please check the applicable box) SUBSCRIBER:
| ☐ | is: |
| ☒ | is not: |
an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company or acting on behalf of an affiliate of the Company.
Rule 501(a), in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Subscriber has indicated, by marking and initialing the appropriate box(es) below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”
| ☐ | Any bank, registered broker or dealer, insurance company, registered investment company, business development company, small business investment company, private business development company, or rural business investment company; |
| ☒ | Any investment adviser registered pursuant to section 203 of the Investment Advisers Act or registered pursuant to the laws of a state; |
| ☐ | Any investment adviser relying on the exemption from registering with the Commission under section 203(l) or (m) of the Investment Advisers Act; |
| ☐ | Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; |
| ☐ | Any employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”; |
| ☐ | Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000; |
| ☐ | Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Section 230.506(b)(2)(ii) of Regulation D under the Securities Act; |
| ☐ | Any entity, other than an entity described in the categories of “accredited investors” above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000; |
| ☐ | Any “family office,” as defined under the Investment Advisers Act that satisfies all of the following conditions: (i) with assets under management in excess of $5,000,000, (ii) that is not formed for the specific purpose of acquiring the securities offered, and (iii) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment; |
| ☐ | Any “family client,” as defined under the Investment Advisers Act, of a family office meeting the requirements in the previous paragraph and whose prospective investment in the issuer is directed by such family office pursuant to the previous paragraph; or |
| ☐ | Any entity in which all of the equity owners are “accredited investors”. Specify which tests: |
| ☐ | Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer; |
| ☐ | Any natural person whose individual net worth, or joint net worth with that person’s spouse or spousal equivalent, exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence shall not be included as an asset; (b) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability; |
| ☐ | Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse or spousal equivalent in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; |
| ☐ | Any natural person holding in good standing one or more professional certifications or designations or credentials from an accredited educational institution that the Commission has designated as qualifying an individual for accredited investor status; or |
| ☐ | Any natural person who is a “knowledgeable employee,” as defined in the Investment Company Act, of the issuer of the securities being offered or sold where the issuer would be an investment company, as defined in section 3 of such act, but for the exclusion provided by either section 3(c)(1) or section 3(c)(7) of such act. |
This page should be completed by Subscriber and constitutes a part of the Subscription Agreement.
| SUBSCRIBER: | ||
| Meteora Select Trading Opportunities Master, LP | ||
| By: | ||
| Name: | Vik Mittal | |
| Title: | CIO/Managing Member of GP | |