Exhibit
10.5


 


SHIPYARD
ACQUISITION CORPORATION II

24 Shipyard Drive, Suite 102


Hingham,
MA 02043


 


Sponsor


 


	 	RE:	Securities
    Subscription Agreement


 


Ladies
and Gentlemen:


 


This
agreement (the “Agreement”) is entered into as of March 4, 2021, by and between Sponsor, a Delaware limited
liability company (the “Subscriber” or “you”), and Shipyard Acquisition Corporation II, a Delaware
corporation (the “Company,” “we” or “us”). Pursuant to the terms hereof, the
Company hereby accepts the offer the Subscriber has made to purchase 3,450,000 shares of common stock, $0.0001 par value per share (the
“Shares”), up to 450,000 of which are subject to forfeiture by you if the underwriters of the initial public offering
(“IPO”) of units (“Units”) of the Company, do not fully exercise their over-allotment option (the
“Over-allotment Option”). The Company and the Subscriber’s agreements regarding such Shares are as follows:


 


1.
Purchase of Securities.



 


1.1
Purchase of Shares. For the sum of $25,000 (the
“Purchase Price”), which the Company acknowledges receiving in cash, the Company hereby issues the Shares to the Subscriber,
and the Subscriber hereby purchases the Shares from the Company, subject to forfeiture, on the terms and subject to the conditions set
forth in this Agreement. Concurrently with the Subscriber’s execution of this Agreement,
the Company shall, record such issuance in the Subscriber’s name in the Company’s stock ledger. No stock certificate shall
be issued for the Shares.


 


2.
Representations, Warranties and Agreements.



 


2.1
Subscriber’s Representations, Warranties and
Agreements. To induce the Company to issue the Shares to the Subscriber, the Subscriber hereby represents and warrants to the Company
and agrees with the Company as follows:


 


2.1.1
No Government Recommendation or Approval. The
Subscriber understands that no federal or state agency has passed upon or made any recommendation or endorsement of the offering of the
Shares.


 


2.1.2
No Conflicts. The execution, delivery and performance
of this Agreement and the consummation by the Subscriber of the transactions contemplated hereby do not violate, conflict with or constitute
a default under (i) the formation and governing documents of the Subscriber, (ii) any agreement, indenture or instrument to which the
Subscriber is a party or (iii) any law, statute, rule or regulation to which the Subscriber is subject, or any agreement, order, judgment
or decree to which the Subscriber is subject.


 




    	 



     


    

 


2.1.3
Organization and Authority. The Subscriber is
a Delaware limited liability company, validly existing and in good standing under the laws of Delaware and possesses all requisite power
and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery by you, this Agreement
is a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’
rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).


 


2.1.4
Experience, Financial Capability and Suitability.
Subscriber is: (i) sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Shares
and (ii) able to bear the economic risk of its investment in the Shares for an indefinite period of time because the Shares have not
been registered under the Securities Act (as defined below) and therefore cannot be sold unless subsequently registered under the Securities
Act or an exemption from such registration is available. Subscriber is capable of evaluating the merits and risks of its investment in
the Company and has the capacity to protect its own interests. Subscriber must bear the economic risk of this investment until the Shares
are sold pursuant to: (i) an effective registration statement under the Securities Act or (ii) an exemption from registration available
with respect to such sale. Subscriber is able to bear the economic risks of an investment in the Shares and to afford a complete loss
of Subscriber’s investment in the Shares.


 


2.1.5
Access to Information; Independent Investigation.
Prior to the execution of this Agreement, the Subscriber has had the opportunity to ask questions of and receive answers from representatives
of the Company concerning an investment in the Company, as well as the finances, operations, business and prospects of the Company, and
the opportunity to obtain additional information to verify the accuracy of all information so obtained. In determining whether to make
this investment, Subscriber has relied solely on Subscriber’s own knowledge and understanding of the Company and its business based
upon Subscriber’s own due diligence investigation and the information furnished pursuant to this paragraph. Subscriber understands
that no person has been authorized to give any information or to make any representations which were not furnished pursuant to this Section
2 and Subscriber has not relied on any other representations or information in making its investment decision, whether written or oral,
relating to the Company, its operations and/or its prospects.


 


2.1.6
Regulation D Offering. Subscriber represents
that it is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933,
as amended (the “Securities Act”) and acknowledges the sale contemplated hereby is being made in reliance on a private
placement exemption to “accredited investors” within the meaning of Section 501(a) of Regulation D under the Securities Act
or similar exemptions under state law.


 


2.1.7
Investment Purposes. The Subscriber is purchasing
the Shares solely for investment purposes, for the Subscriber’s own account and not for the account or benefit of any other person,
and not with a view towards the distribution or dissemination thereof. The Subscriber did not decide to enter into this Agreement as
a result of any general solicitation or general advertising within the meaning of Rule 502 under the Securities Act.


 




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2.1.8
Restrictions on Transfer; Shell Company. Subscriber
understands the Shares are being offered in a transaction not involving a public offering within the meaning of the Securities Act. Subscriber
understands the Shares will be “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, and
Subscriber understands that the certificates or book-entries representing the Shares will contain a legend in respect of such restrictions.
If in the future the Subscriber decides to offer, resell, pledge or otherwise transfer the Shares, such Shares may be offered, resold,
pledged or otherwise transferred only pursuant to: (i) registration under the Securities Act, or (ii) an available exemption from registration.
Subscriber agrees that if any transfer of its Shares or any interest therein is proposed to be made, as a condition precedent to any
such transfer, Subscriber may be required to deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration
or an exemption, the Subscriber agrees not to resell the Shares. Subscriber further acknowledges that because the Company is a shell
company, Rule 144 may not be available to the Subscriber for the resale of the Shares until one year following consummation of the initial
business combination of the Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any
contractual transfer restrictions.


 


2.1.9
No Governmental Consents. No governmental, administrative
or other third party consents or approvals are required, necessary or appropriate on the part of Subscriber in connection with the transactions
contemplated by this Agreement.


 


2.2
Company’s Representations, Warranties and Agreements.
To induce the Subscriber to purchase the Shares, the Company hereby represents and warrants to the Subscriber and agrees with the Subscriber
as follows:


 


2.2.1
Organization and Corporate Power. The Company
is a Delaware corporation and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be
expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company possesses
all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement.


 


2.2.2
No Conflicts. The execution, delivery and performance
of this Agreement and the consummation by the Company of the transactions contemplated hereby do not violate, conflict with or constitute
a default under (i) the Certificate of Incorporation or By Laws of the Company, (ii) any agreement, indenture or instrument to which
the Company is a party or (iii) any law, statute, rule or regulation to which the Company is subject, or any agreement, order, judgment
or decree to which the Company is subject.


 


2.2.3
Title to Securities. Upon issuance in accordance
with, and payment pursuant to, the terms hereof, the Shares will be duly and validly issued, fully paid and non-assessable. Upon issuance
in accordance with, and payment pursuant to, the terms hereof, the Subscriber will have or receive good title to the Shares, free and
clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions hereunder and other agreements to which
the Shares may be subject which have been notified to the Subscriber in writing, (b) transfer restrictions under federal and state securities
laws, and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber.


 




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2.2.4
No Adverse Actions. There are no actions, suits,
investigations or proceedings pending, threatened against or affecting the Company which: (i) seek to restrain, enjoin, prevent the consummation
of or otherwise affect the transactions contemplated by this Agreement or (ii) question the validity or legality of any transactions
or seeks to recover damages or to obtain other relief in connection with any transactions.


 


3.
Forfeiture of Shares.


 


3.1
Partial or No Exercise of the Over-allotment Option.
In the event the Over-allotment Option granted to the underwriters of the IPO is not exercised in full, the Subscriber acknowledges and
agrees that it (or, if applicable, it and any transferees of Shares) shall forfeit any and all rights to such number of Shares (up to
an aggregate of 450,000 Shares and pro rata based upon the percentage of the Over-allotment Option exercised) such that immediately following
such forfeiture, the Subscriber (and all other initial stockholders prior to the IPO, if any) will own an aggregate number of Shares,
not including Shares issuable upon exercise of any warrants or any Common Stock purchased by Subscriber in the IPO or in the aftermarket
equal to 16% of the issued and outstanding Shares immediately following the IPO.


 


3.2
Termination of Rights as Stockholder. If any
of the Shares are forfeited in accordance with this Section 3, then after such time the Subscriber (or successor in interest), shall
no longer have any rights as a holder of such forfeited Shares, and the Company shall take such action as is appropriate to cancel such
forfeited Shares.


 


3.3
Recording Share Adjustments. In the event an
adjustment to the number of Shares, if any, is required pursuant to this Section 3, then such adjustment shall be made in book-entry
form in the stock ledger of the Company.


 


4.
Waiver of Liquidation Distributions; Redemption Rights. In connection with the Shares purchased pursuant to this Agreement, the
Subscriber hereby waives any and all right, title, interest or claim of any kind in or to any distributions by the Company from the trust
account which will be established for the benefit of the Company’s public stockholders and into which substantially all of the
proceeds of the IPO will be deposited (the “Trust Account”), in the event of a liquidation of the Company upon the
Company’s failure to timely complete an initial business combination. For purposes of clarity, in the event the Subscriber purchases
Shares in the IPO or in the aftermarket, any additional Shares so purchased shall be eligible to receive any liquidating distributions
by the Company. However, in no event will the Subscriber have the right to redeem any Shares into funds held in the Trust Account upon
the successful completion of an initial business combination.


 




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5.
Restrictions on Transfer.



 


5.1
Securities Law Restrictions. In addition to any
restrictions to be contained in that certain letter agreement (commonly known as an “Insider Letter”) to be dated
as of the closing of the IPO by and between Subscriber and the Company, Subscriber agrees not to sell, transfer, pledge, hypothecate
or otherwise dispose of all or any part of the Shares unless, prior thereto (a) a registration statement on the appropriate form under
the Securities Act and applicable state securities laws with respect to the Shares proposed to be transferred shall then be effective
or (b) the Company has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required
because such transaction is exempt from registration under the Securities Act and the rules promulgated by the Securities and Exchange
Commission thereunder and with all applicable state securities laws.


 


5.2
Lock-up. Subscriber acknowledges
that the Securities will be subject to lock-up provisions (the “Lock-up”) contained in the Insider Letter.


 


5.3
Restrictive Legends. Any certificates representing
the Shares shall have endorsed thereon legends substantially as follows, or if the Shares are held in book entry form, the Company’s
records shall be annotated to reflect the following legends with respect to the Shares:


 


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


 


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


 


5.4
Additional Shares or Substituted Securities.
In the event of the declaration of a share dividend, the declaration of an extraordinary dividend payable in a form other than Shares,
a spin-off, a share split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s
outstanding Shares without receipt of consideration, any new, substituted or additional securities or other property which are by reason
of such transaction distributed with respect to any Shares subject to this Section 5 or into which such Shares thereby become convertible
shall immediately be subject to this Section 5 and Section 3. Appropriate adjustments to reflect the distribution of such securities
or property shall be made to the number and/or class of Shares subject to this Section 5 and Section 3.


 


5.5
Registration Rights. Subscriber acknowledges
that the Shares are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become
freely tradable only after certain conditions are met or they are registered pursuant to a registration rights agreement to be entered
into with the Company prior to the closing of the IPO.


 


6.
Other Agreements.



 


6.1
Further Assurances. Subscriber agrees to execute
such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.


 




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6.2
Notices. All notices, statements or other documents
which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent by first class registered
or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile
to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party
and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address
as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on
the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or
electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by
mail.


 


6.3
Entire Agreement. This Agreement, together with
the Insider Letter and the Registration Rights Agreement, each substantially in the form to be filed as an exhibit to the Registration
Statement on Form S-1 associated with the Company’s IPO, embodies the entire agreement and understanding between the Subscriber
and the Company with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating
to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this
Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.


 


6.4
Modifications and Amendments. The terms and provisions
of this Agreement may be modified or amended only by written agreement executed by all parties hereto.


 


6.5
Waivers and Consents. The terms and provisions
of this Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled
to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent
with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective
only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.


 


6.6
Assignment. The rights and obligations under
this Agreement may not be assigned by either party hereto without the prior written consent of the other party.


 


6.7
Benefit. All statements, representations, warranties,
covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors
and permitted assigns of each party hereto. Nothing in this Agreement shall be construed to create any rights or obligations except among
the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement.


 


6.8
Governing Law. This Agreement and the rights
and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of New York applicable to contracts
wholly performed within the borders of such state, without giving effect to the conflict of law principles thereof.


 


6.9
Severability. In the event that any court of
competent jurisdiction shall determine that any provision, or any portion thereof, contained in this Agreement shall be unreasonable
or unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it reasonable and enforceable,
and as so limited shall remain in full force and effect. In the event that such court shall deem any such provision, or portion thereof,
wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full force and effect.


 




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6.10
No Waiver of Rights, Powers and Remedies. No
failure or delay by a party hereto in exercising any right, power or remedy under this 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 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 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.


 


6.11
Survival of Representations and Warranties. All
representations and warranties made by the parties hereto in this Agreement or in any other agreement, certificate or instrument provided
for or contemplated hereby, shall survive the execution and delivery hereof and any investigations made by or on behalf of the parties.


 


6.12
No Broker or Finder. Each of the parties hereto
represents and warrants to the other that no broker, finder or other financial consultant has acted on its behalf in connection with
this Agreement or the transactions contemplated hereby in such a way as to create any liability on the other. Each of the parties hereto
agrees to indemnify and save the other harmless from any claim or demand for commission or other compensation by any broker, finder,
financial consultant or similar agent claiming to have been employed by or on behalf of such party and to bear the cost of legal expenses
incurred in defending against any such claim.


 


6.13
Headings and Captions. The headings and captions
of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning
or construction of any of the terms or provisions hereof.


 


6.14
Counterparts. This Agreement may be executed
in one or more counterparts, all of which when taken together 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, it being understood that both parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery,
such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with
the same force and effect as if such signature page were an original thereof.


 




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6.15
Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement
will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring
any party hereto because of the authorship of any provision of this Agreement. The words “include,” “includes,”
and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter
genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice
versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,”
“hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless
expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent
significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that
there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity)
which such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first
representation, warranty, or covenant.


 


6.16
Mutual Drafting. This Agreement is the joint
product of the Subscriber and the Company and each provision hereof has been subject to the mutual consultation, negotiation and agreement
of such parties and shall not be construed for or against any party hereto.


 


7.
Voting and Tender of Shares. Subscriber agrees to vote the Shares in favor of an initial business combination that the Company
negotiates and submits for approval to the Company’s stockholders and shall not seek redemption with respect to such Shares. Additionally,
the Subscriber agrees not to tender any Shares in connection with a tender offer presented to the Company’s stockholders in connection
with an initial business combination negotiated by the Company.


 


8.
Indemnification. Each party shall indemnify the other against any loss, cost or damages (including reasonable attorney’s
fees and expenses) incurred as a result of such party’s breach of any representation, warranty, covenant or agreement in this Agreement.


 


[Signature
Page Follows]


 




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If
the foregoing accurately sets forth our understanding and agreement, please sign the enclosed copy of this Agreement and return it to
us.


 


 


	 	Very
    truly yours,
	 	 
	 	Shipyard
    Acquisition Corporation II
	 	 	 
	 	By:	 
	 	Name:	Ben
    Piggot
	 	Title:	Chief
    Executive Officer


 


	Accepted
    and agreed as of the date first written above.	 
	 	 
	Sponsor	 
	 	 	 
	By:	 	 
	Name:	David
    Boral	 
	Title:	Member	 


 


[Signature
Page to Securities Subscription Agreement]


 




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