Exhibit 3.3

 

 

FORM OF

 

AMENDED AND RESTATED

 

BY-LAWS

 

OF

 

X-ENERGY, INC.

 

Dated as of               , 2026

 

 

 

CONTENTS

 

Page

 

Article I. CORPORATE OFFICERS		1
Section 1.01	Registered Office	1
Section 1.02	Other Offices	1
Article II. Meetings of Stockholders		1
Section 2.01	Place of Meetings	1
Section 2.02	Annual Meetings	1
Section 2.03	Special Meetings	1
Section 2.04	Notice of Meetings	2
Section 2.05	Adjournments	2
Section 2.06	Quorum	3
Section 2.07	Organization	3
Section 2.08	Voting; Proxies	3
Section 2.09	Fixing Date for Determination of Stockholders of Record	4
Section 2.10	List of Stockholders Entitled to Vote	5
Section 2.11	Inspectors of Election	6
Section 2.12	Conduct of Meetings	6
Section 2.13	Advance Notice Procedures for Business Brought before a Meeting	7
Section 2.14	Advance Notice Procedures for Nominations of Directors	10
Section 2.15	Delivery to the Corporation	14
Article III. Board of Directors		14
Section 3.01	Powers	14
Section 3.02	Number; Tenure; Qualifications	14
Section 3.03	Election, Qualification and Term of Office of Directors	14
Section 3.04	Resignation and Vacancies	15
Section 3.05	Regular Meetings	15
Section 3.06	Special Meetings	15
Section 3.07	Place of Meetings; Telephonic Meetings	15
Section 3.08	Quorum; Vote Required for Action	16
Section 3.09	Organization	16
Section 3.10	Action by Unanimous Consent of Directors	16
Section 3.11	Compensation of Directors	16
Section 3.12	Chairperson	16
Article IV. Committees		17
Section 4.01	Committees	17
Section 4.02	Committee Minutes	17
Section 4.03	Committee Rules	17

 

 

Article V. Officers		17
Section 5.01	Officers	17
Section 5.02	Appointment of Officers	18
Section 5.03	Subordinate Officer	18
Section 5.04	Removal and Resignation of Officers	18
Section 5.05	Vacancies in Offices	18
Section 5.06	Representation of Shares of Other Entities	18
Section 5.07	Authority and Duties of Officers	18
Section 5.08	Compensation	18
Article VI. Records		19
Section 6.01	Records	19
Article VII. General Matters		19
Section 7.01	Execution of Corporate Contracts and Instruments	19
Section 7.02	Stock Certificates	19
Section 7.03	Special Designation of Certificates	20
Section 7.04	Lost Certificates	20
Section 7.05	Shares Without Certificates	20
Section 7.06	Construction; Definitions	20
Section 7.07	Dividends	21
Section 7.08	Fiscal Year	21
Section 7.09	Seal	21
Section 7.10	Transfer of Stock	21
Section 7.11	Stock Transfer Agreements	21
Section 7.12	Registered Stockholders	21
Section 7.13	Waiver of Notice	22
Article VIII. Notice		22
Section 8.01	Delivery of Notice; Notice by Electronic Transmission	22
Article IX. Indemnification		23
Section 9.01	Indemnification of Directors and Officers	23
Section 9.02	Indemnification of Others	23
Section 9.03	Prepayment of Expenses	23
Section 9.04	Determination; Claim	24
Section 9.05	Non-Exclusivity of Rights	24
Section 9.06	Insurance	24
Section 9.07	Other Indemnification	24
Section 9.08	Continuation of Indemnification	24
Section 9.09	Amendment or Repeal; Interpretation	25
Article X. Amendments		25
Article XI. Definitions		26

 

 

Article I.
CORPORATE OFFICES

 

Section 1.01            Registered Office. The address of the registered office of X-Energy, Inc., a Delaware corporation (the “Corporation”), in the State of Delaware, and the name of its registered agent at such address, shall be as set forth in the Corporation’s certificate of incorporation, as the same may be amended, restated or otherwise modified from time to time (the “Certificate of Incorporation”).

 

Section 1.02            Other Offices. The Corporation may have additional offices at any place or places, within or outside the State of Delaware, as the Corporation’s board of directors (the “Board of Directors”) may from time to time establish or as the business of the Corporation may require.

 

Article II.
Meetings of Stockholders

 

Section 2.01            Place of Meetings. Meetings of stockholders of the Corporation (the “Stockholders”), may be held at any place, within or without the State of Delaware, as may be designated by or in the manner determined by the Board of Directors. In the absence of such designation, meetings of Stockholders shall be held at the principal executive office of the Corporation. In its sole discretion, the Board of Directors may, determine that a meeting of Stockholders shall not be held at any place, but may instead be held solely by means of remote communication authorized by and in accordance with Section 211(a) of the General Corporation Law of the State of Delaware (the “DGCL”).

 

Section 2.02            Annual Meetings. The annual meeting of Stockholders shall be held for the election of members of the Board of Directors (the “Directors”) at such date and time as may be designated by or in the manner determined by resolution of the Board of Directors from time to time. Any other business as may be properly brought before the annual meeting of Stockholders may be transacted at the annual meeting of Stockholders. The Board of Directors may postpone, reschedule or cancel any annual meeting of Stockholders previously scheduled by the Board of Directors.

 

Section 2.03            Special Meetings. Special meetings of the Stockholders may be called only by such persons and only in such manner as set forth in the Certificate of Incorporation. Special meetings of Stockholders validly called in accordance with this Section 2.03 of these By-laws (as the same may be amended, restated or otherwise modified from time to time, these “By-laws”) may be held at such date and time as specified in the applicable notice of such meeting. No business may be transacted at any special meeting of Stockholders other than the business specified in the notice of such meeting. Except in the case of a special meeting of Stockholders called at the request of the Stockholders pursuant to the express terms of the Certificate of Incorporation, the Board of Directors may postpone, reschedule or cancel any previously scheduled special meeting of the Stockholders.

 

 

Section 2.04            Notice of Meetings. Whenever Stockholders are required or permitted to take any action at a meeting of Stockholders, a notice of the meeting shall be given. The notice shall state: (i) the place, if any, date and hour of the meeting; (ii) the means of remote communications, if any, by which Stockholders and proxy holders may be deemed to be present in person and vote at such meeting; (iii) the record date for determining the Stockholders entitled to vote at the meeting (if such date is different from the record date for Stockholders entitled to notice of the meeting); and (iv) in the case of a special meeting of the Stockholders, the purpose or purposes for which the meeting is called. Unless otherwise required by applicable law, the Certificate of Incorporation or these By-laws, the notice of any meeting of Stockholders shall be given not less than ten nor more than 60 days before the date of the meeting to each Stockholder entitled to vote at the meeting as of the record date for determining the Stockholders entitled to notice of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the Stockholder at such Stockholder’s address as it appears on the records of the Corporation. In addition, if Stockholders have consented to receive notices by a form of electronic transmission, then such notice shall be deemed to be given when directed to an electronic mail address, respectively, at which the Stockholder has consented to receive notice. If such notice is transmitted by a posting on an electronic network together with separate notice to the Stockholder of such specific posting, such notice shall be deemed to be given upon the later of (i) such posting, and (ii) the giving of such separate notice. If such notice is transmitted by any other form of electronic transmission, such notice shall be deemed to be given when directed to the Stockholder. Notice shall be deemed to have been given to all Stockholders of record who share an address if notice is given in accordance with the “householding” rules set forth in the rules of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 233 of the DGCL.

 

Section 2.05            Adjournments. Any meeting of Stockholders, annual or special, may be adjourned from time to time by the chairperson of the meeting (or by the Stockholders in accordance with Section 2.06) to reconvene at the same or some other place, if any, and the same or some other time. Notice need not be given to the Stockholders of any such adjourned meeting if the time and place, if any, of such meeting, and the means of remote communications, if any, by which Stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting of Stockholders, the Corporation may transact any business that might have been transacted at the original meeting of Stockholders. If the adjournment is for more than 30 days, a notice of the adjourned meeting of Stockholders shall be given to each Stockholder of record entitled to vote at the adjourned meeting of Stockholders. If after the adjournment a new record date for determination of Stockholders entitled to vote is fixed for the adjourned meeting of Stockholders. The Board of Directors shall fix a new record date for determining Stockholders entitled to notice of such adjourned meeting of Stockholders in accordance with Section 2.09(a) of these By-laws, and shall give notice of the adjourned meeting of Stockholders to each Stockholder of record entitled to vote at such adjourned meeting of Stockholders as of the record date fixed for notice of such adjourned meeting of Stockholders. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the Stockholder at such Stockholder’s address as it appears on the records of the Corporation.

 

 

Section 2.06            Quorum. At any meeting of the Stockholders, the holders of a majority of the voting power of the issued and outstanding shares of capital stock of the Corporation (“Stock”) entitled to vote at the meeting, present in person, or by remote communication, if applicable, or represented by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by applicable law, the rules of any stock exchange upon which the Corporation’s securities are listed, the Certificate of Incorporation or these By-laws. In the absence of a quorum, then either (i) the chairperson of the meeting or (ii) the Stockholders by the affirmative vote of a majority of the voting power of the outstanding shares of Stock entitled to vote thereon, present in person, or by remote communication, if applicable, or represented by proxy, shall have the power to recess or adjourn the meeting of Stockholders from time to time in the manner provided in Section 2.05 of these By-laws until a quorum is present or represented. At any such recessed or adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed. Where a separate vote by a class or classes or series of Stock is required by applicable law or the Certificate of Incorporation, the holders of a majority of voting power of the shares of such class or classes or series of Stock issued and outstanding and entitled to vote on such matter, present in person, or by remote communication, if applicable, or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on such matter. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.

 

Section 2.07            Organization. Meetings of Stockholders shall be presided over by the Chairperson or by such other officer of the Corporation or Director as designated by the Board of Directors or the Chairperson. In the absence of such person or designation, then the chairperson for the meeting shall be chosen by the affirmative vote of a majority of the voting power of the outstanding shares of Stock present or represented at the meeting and entitled to vote at the meeting (provided there is a quorum). The Secretary of the Corporation (“Secretary”) shall act as secretary of the meeting, but in such person’s absence, the chairperson of the meeting may appoint any person to act as secretary of the meeting.

 

Section 2.08            Voting; Proxies.

 

(a)           Each Stockholder entitled to vote at any meeting of Stockholders shall be entitled to the number of votes, if any, for each share of Stock held of record by such Stockholder that has voting power upon the matter in question as set forth in the Certificate of Incorporation or, if such voting power is not set forth in the Certificate of Incorporation, one vote per share. Voting at meetings of Stockholders need not be by written ballot. Unless otherwise provided in the Certificate of Incorporation, at all meetings of Stockholders for the election of Directors at which a quorum is present, a majority of the votes cast shall be sufficient to elect Directors. No holder of shares of Stock shall have the right to cumulate votes. All other elections and questions presented to the Stockholders at a meeting at which a quorum is present shall be decided by the affirmative vote of the holders of a majority of votes cast (excluding abstentions and broker non-votes) on such matter, unless a different or minimum vote is required by the Certificate of Incorporation, these By-laws, the rules or regulations of any stock exchange applicable to the Corporation, or applicable law or pursuant to any regulation applicable to the Corporation or its securities, in which case such different or minimum vote shall be the applicable vote on the matter.

 

 

(b)           Each Stockholder entitled to vote at a meeting of Stockholders or express consent to corporate action in writing without a meeting (if permitted by the Certificate of Incorporation) may authorize another person or persons to act for such Stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law, including Rule 14a-19 promulgated under the Exchange Act, filed in accordance with the procedure established for the meeting. No such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL. A Stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person (or by means of remote communication, if applicable) or by delivering to the Secretary a revocation of the proxy or a new proxy bearing a later date. A proxy may be in the form of an electronic transmission that sets forth or is submitted with information from which it can be determined that the transmission was authorized by the Stockholder.

 

Section 2.09            Fixing Date for Determination of Stockholders of Record.

 

(a)           In order that the Corporation may determine the Stockholders entitled to notice of any meeting of Stockholders or any adjournment of such meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors. Unless otherwise required by applicable law, any such record date shall not be more than 60 nor less than ten days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the Stockholders entitled to vote at such meeting. Notwithstanding the foregoing, at the time it fixes such record date, the Board of Directors may determine, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining Stockholders entitled to notice of and to vote at a meeting of Stockholders shall be at the close of business on the day immediately preceding the day on which notice is given, or, if notice is waived, at the close of business on the day immediately preceding the day on which the meeting is held. A determination of Stockholders of record entitled to notice of or to vote at a meeting of Stockholders shall apply to any adjournment of the meeting. The Board of Directors may, however, fix a new record date for determination of Stockholders entitled to vote at the adjourned meeting. In such event the Board of Directors shall also fix as the record date for Stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of Stockholders entitled to vote in accordance with the foregoing provisions of this Section 2.09(a) at the adjourned meeting.

 

(b)           In order that the Corporation may determine the Stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of Stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted. Any such record date shall not be more than 60 days prior to such action. If no such record date is fixed, the record date for determining Stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such record date.

 

 

(c)           Unless otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the Stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any such record date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date for determining Stockholders entitled to consent to corporate action in writing without a meeting is fixed by the Board of Directors, (i) when no prior action of the Board of Directors is required by applicable law or the Certificate of Incorporation, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law and (ii) if prior action by the Board of Directors is required by applicable law or the Certificate of Incorporation, the record date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

 

Section 2.10            List of Stockholders Entitled to Vote. At least ten days before every meeting of Stockholders, the Corporation shall prepare a complete list of the Stockholders entitled to vote at the meeting arranged in alphabetical order and showing the address of each Stockholder and the number of shares registered in the name of each Stockholder as of the record date (or such other date). In the event the record date for determining the Stockholders entitled to vote is less than ten days before the date of the meeting, the list referenced in the preceding sentence shall reflect the Stockholders entitled to vote as of the tenth day before the meeting date). The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any Stockholder, for any purpose germane to the meeting at least ten days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting or (ii) during ordinary business hours at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to Stockholders. Such list shall presumptively determine the identity of the Stockholders entitled to vote at the meeting and the number of shares held by each of them. Except as otherwise provided by law, the “stock ledger” shall be the only evidence as to the Stockholders entitled to examine the list of Stockholders required by this Section 2.10 or to vote in person or by proxy at any meeting of Stockholders. For purposes of these By-laws, the term “stock ledger” means one or more records administered by or on behalf of the Corporation in which the names of all of the Corporation’s Stockholders of record, the address and number of shares registered in the name of each such Stockholder and all issuances and transfers of Stock are recorded.

 

 

Section 2.11            Inspectors of Election. In advance of any meeting of Stockholders, the Corporation may, and shall if required by law, appoint one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment of such meeting and to make a written report of such meeting. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of Stockholders, the person presiding at the meeting may, and to the extent required by law, shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of such person’s ability. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated in any such report or certificate. The inspector or inspectors of election may appoint such persons to assist them in performing their duties as they determine. The inspector or inspectors so appointed or designated shall: (i) ascertain the number of shares of Stock outstanding and the voting power of each such share; (ii) determine the number of shares of Stock represented at the applicable meeting of the Stockholders and the validity of proxies and ballots; (iii) count and tabulate all votes and ballots; (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and (v) certify their determination of the number of shares of Stock represented at the meeting and such inspectors’ count of all votes and ballots. Any certification and report shall specify such other information as may be required by applicable law. In determining the validity and counting of proxies and ballots cast at any meeting of Stockholders, the inspectors may consider any information permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election. The inspectors may appoint or retain other persons to assist them in the performance of their duties.

 

Section 2.12            Conduct of Meetings. The date and time of the opening and the closing of the polls for each matter upon which the Stockholders will vote at a meeting of the Stockholders shall be announced at the meeting by the person presiding over the meeting designated in accordance with Section 2.07. After the polls close, no ballots, proxies or votes or any revocations or changes may be accepted. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of Stockholders as it deems appropriate. Except to the extent inconsistent with any rules and regulations adopted by the Board of Directors, the person presiding over any meeting of Stockholders shall have the right and authority to: (i) convene and (for any or no reason) to recess and/or adjourn the meeting; and (ii) prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding person of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to Stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement of the meeting; and (v) limitations on the time allotted to questions or comments by participants. In addition to making any other determinations that may be appropriate to the conduct of the meeting, the presiding person at any meeting of Stockholders, shall, if the facts warrant, determine that a matter or business was not properly brought before the meeting. In the event of any such determination, the presiding person shall announce their determination to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the applicable meeting of Stockholders, meetings of Stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

 

 

Section 2.13            Advance Notice Procedures for Business Brought before a Meeting. This Section 2.13 shall apply to any business that may be brought before an annual meeting of Stockholders other than nominations for election to the Board of Directors at such a meeting, which shall be governed by Section 2.14. Stockholders seeking to nominate persons for election to the Board of Directors must comply with Section 2.14. This Section 2.13 shall not be applicable to nominations for election to the Board of Directors except as expressly provided in Section 2.14.

 

(a)           At an annual meeting of the Stockholders, the only business that shall be conducted is such business that has been properly brought before the meeting. To be properly brought before an annual meeting of the Stockholders, business must be: (a) specified in a notice of meeting of the Stockholders (or any supplement or amendment thereto) given by or at the direction of the Board of Directors or a duly authorized committee of the Board; (b) if not specified in a notice of meeting of the Stockholders, otherwise brought before the meeting by the Board of Directors or the chairperson of the meeting; or (c) otherwise properly brought before the meeting by a Stockholder present in person, or by remote communication. To properly bring a matter for consideration at an annual meeting, a Stockholder must: (A) (i) be a Stockholder of record of the Corporation both at the time of giving the notice provided for in this Section 2.13 and at the time of the meeting; (ii) be entitled to vote at the meeting; and (iii) be in compliance with this Section 2.13 in all respects; or (B) have properly made such proposal in accordance with Rule 14a-8 under the Exchange Act, which proposal has been included in the proxy statement for such annual meeting of the Stockholders. The foregoing clause (c) shall be the exclusive means for a Stockholder to propose business to be brought before an annual meeting of the Stockholders. The only matters that may be brought before a special meeting of the Stockholders are the matters specified in the Corporation’s notice of meeting of the Stockholders given by or at the direction of the person calling the meeting pursuant to the Certificate of Incorporation and Section 2.03. For purposes of this Section 2.13 and Section 2.14, “present in person” shall mean that the Stockholder proposing that the business be brought before the annual meeting or special meeting of the Stockholders, as applicable. If the proposing Stockholder is not an individual, then a qualified representative of such proposing Stockholder may appear in person at such annual or special meeting of the Stockholders. For purposes of this Section 2.13, a “qualified representative” of such proposing Stockholder shall be, if such proposing Stockholder is (x) a general or limited partnership, any general partner or person who functions as a general partner of the general or limited partnership or who controls the general or limited partnership; (y) a corporation or a limited liability company, any officer or person who functions as an officer of the corporation or limited liability company or any officer, director, general partner or person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company; or (z) a trust, any trustee of such trust.

 

(b)           To properly bring a matter for consideration at an annual meeting of the Stockholders, a Stockholder must: (a) provide Timely Notice in writing and in proper form to the Secretary; and (b) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.13. To be timely, a Stockholder’s notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the one-year anniversary of the immediately preceding year’s annual meeting. With respect to the first annual meeting of Stockholders following the Effective Time (as defined in the Certificate of Incorporation), the date for timely notice shall be               . In the event that the date of the annual meeting of the Stockholders is more than 30 days before or more than 60 days after such anniversary date, to be timely, notice by a Stockholder must be delivered, or mailed and received, not later than the later of (A) the 90^th day prior to such annual meeting and (B) the 10^th day following the day on which public disclosure of the date of such annual meeting was first made (such notice within such time periods, “Timely Notice”). In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of Timely Notice as described above.

 

 

(c)           To be in proper form for purposes of this Section 2.13, a Stockholder’s notice to the Secretary shall set forth:

 

(i)            As to each Proposing Person: (A) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the Corporation’s books and records); and (B) the number of shares of each class or series of Stock of the Corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person. A Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of Stock of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures to be made pursuant to the foregoing clauses (A) and (B) are referred to as “Stockholder Information”);

 

(ii)           As to each Proposing Person, the full notional amount of any securities that, directly or indirectly, underlie any “derivative security” (as such term is defined in Rule 16a-1(c) under the Exchange Act) that constitutes a “call equivalent position” (as such term is defined in Rule 16a-1(b) under the Exchange Act) (“Synthetic Equity Position”) and that is, directly or indirectly, held or maintained by such Proposing Person with respect to any shares of any class or series of Stock of the Corporation. For the purposes of the definition of “Synthetic Equity Position,” the term “derivative security” shall also include any security or instrument that would not otherwise constitute a “derivative security” as a result of any feature that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination. For the avoidance of doubt, any Proposing Person satisfying the requirements of Rule 13d-1(b)(1) under the Exchange Act (other than a Proposing Person that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be deemed to hold or maintain the notional amount of any securities that underlie a Synthetic Equity Position held by such Proposing Person as a hedge with respect to a bona fide derivatives trade or position of such Proposing Person arising in the ordinary course of such Proposing Person’s business as a derivatives dealer The notice for each Proposing Person shall also set forth: (A) any rights to dividends on the shares of any class or series of Stock of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation; (B) any material pending or threatened legal proceeding in which such Proposing Person is a party or material participant involving the Corporation or any of its officers or Directors, or any affiliate of the Corporation; (C) any other material relationship between such Proposing Person, on the one hand, and the Corporation or any affiliate of the Corporation, on the other hand, (E) any direct or indirect material interest in any material contract or agreement of such Proposing Person with the Corporation or any affiliate of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement); and (D) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the applicable meeting of the Stockholders pursuant to Section 14(a) of the Exchange Act. The disclosures to be made pursuant to this Section 2.13(c)(ii) are referred to as “Disclosable Interests”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the Stockholder directed to prepare and submit the notice required by these By-laws on behalf of a beneficial owner; and

 

 

(iii)          As to each item of business that the Stockholder proposes to bring before the annual meeting of the Stockholders: (A) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of each Proposing Person; (B) the text of the proposal or business (including the text of any resolutions proposed for consideration and the text of any proposed amendment to these By-laws); (C) a reasonably detailed description of all agreements, arrangements and understandings (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other person or entity (including their names) in connection with the proposal of such business by such Stockholder; and (D) any other information relating to such item of business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act. The disclosures required by this Section 2.13(c)(iii) shall not include, however, any disclosures with respect to any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the Stockholder directed to prepare and submit the notice required by these By-laws on behalf of a beneficial owner.

 

(d)           The term “Proposing Person” shall mean (a) the Stockholder providing the notice of business proposed to be brought before an annual meeting of the Stockholders, (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting of the Stockholders is made, and (c) any participant (as defined in paragraphs (a)(ii)-(vi) of Instruction 3 to Item 4 of Schedule 14A) with such Stockholder in such solicitation.

 

 

(e)           A Proposing Person shall update and supplement its notice to the Corporation of its intent to propose business at an annual meeting of the Stockholders, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.13 shall be true and correct as of the record date for notice of the meeting and as of the date that is 10 business days prior to the meeting or any adjournment or postponement of the meeting. Any such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five business days after the record date for notice of the meeting. In the case of the update and supplement required to be made as of the record date), any update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than eight business days prior to the date for the meeting or, if practicable, any adjournment or postponement of the meeting. If delivery as set forth in the preceding sentence is not practicable, delivery shall be effected on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten business days prior to the meeting or any adjournment or postponement thereof).

 

(f)           Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at an annual meeting of the Stockholders that is not properly brought before the meeting in accordance with this Section 2.13. If the facts warrant, the presiding officer of the meeting shall determine that the business was not properly brought before the meeting in accordance with this Section 2.13. The presiding person shall announce any such determination to the meeting and any such business not properly brought before the meeting shall not be transacted.

 

(g)           In addition to the requirements of this Section 2.13 with respect to any business proposed to be brought before an annual meeting of the Stockholders, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business. Nothing in this Section 2.13 shall be deemed to affect the rights of Stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

 

(h)           “Public disclosure” means disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

 

Section 2.14            Advance Notice Procedures for Nominations of Directors.

 

(a)           Nominations of any person for election to the Board of Directors at an annual meeting or at a special meeting of the Stockholders may be made at such meeting only: (a) by or at the direction of the Board of Directors, including by any committee or persons authorized to do so by the Board of Directors or these By-laws; or (b) by a Stockholder present in person (as defined in Section 2.13) (1) who was a Stockholder of record of the Corporation both at the time of giving the notice provided for in this Section 2.14 and at the time of the meeting, (2) is entitled to vote at the meeting and (3) has complied with this Section 2.14 as to such notice and nomination. Nominations of any person for election to the Board can only occur if the election of Directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting of the Stockholders. This Section 2.14 shall be the exclusive means for a Stockholder to make any nomination of a person or persons for election to the Board of Directors at any annual meeting or special meeting of the Stockholders.

 

 

(b)

 

(i)            For a Stockholder to make any nomination of a person or persons for election to the Board of Directors at an annual meeting of the Stockholders, the Stockholder must (a) provide Timely Notice (as defined in Section 2.13(b)) in writing and in proper form to the Secretary at the principal executive offices of the Corporation; (b) provide the information, agreements and questionnaires with respect to such Stockholder and such Stockholder’s candidate for nomination as required by this Section 2.14; and (c) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.14.

 

(ii)           If the election of Directors is a matter specified in the notice of meeting given by or at the direction of the person calling a special meeting of the Stockholders, then for a Stockholder to make any nomination of a person or persons for election to the Board of Directors at a special meeting of the Stockholders, the Stockholder must: (a) provide timely notice in writing and in proper form to the Secretary at the principal executive offices of the Corporation; (b) provide the information, agreements and questionnaires with respect to such Stockholder and its candidate for nomination required by this Section 2.14; and (c) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.14. To be timely for purposes of this Section 2.14(b)(ii), a Stockholder’s notice for nominations to be made at a special meeting of the Stockholders must be delivered to, or mailed to and received by the Secretary not earlier than the 120^th day prior to such special meeting and not later than the 90^th day prior to such special meeting or, if later, the tenth day following the day on which public disclosure (as defined in Section 2.13(h)) of the date of such special meeting was first made.

 

(iii)          In no event shall any adjournment or postponement of an annual meeting or special meeting of the Stockholders, or the announcement of such adjournment or postponement, commence a new time period for the giving of a Stockholder’s notice as described above.

 

(iv)           In no event may a Nominating Person provide notice under this Section 2.14 or otherwise with respect to a greater number of Director candidates than are subject to election by Stockholders at the applicable meeting. If, subsequent to such notice, the Corporation shall increase the number of Directors subject to election at the meeting, any notice as to any additional nominees shall be due on the later of: (i) the conclusion of the time period for Timely Notice (with respect to an annual meeting of the Stockholders); (ii) the date set forth in Section 2.14(b)(ii) (with respect to a special meeting); or (iii) the tenth day following the date of public disclosure (as defined in Section 2.13(h)) of such increase.

 

(c)           To be in proper form for purposes of this Section 2.14, a Stockholder’s notice to the Secretary shall set forth:

 

(i)            As to each Nominating Person, the Stockholder Information (as defined in Section 2.13(c)(i)) except that the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 2.13(c)(i);

 

 

(ii)           As to each Nominating Person, any Disclosable Interests (as defined in Section 2.13(c)(ii), except that the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 2.13(c)(ii) and the disclosure with respect to the business to be brought before the meeting of the Stockholders in Section 2.13(c)(iii) shall be made with respect to nomination of each person for election as a Director at such meeting); and

 

(iii)           As to each candidate whom a Nominating Person proposes to nominate for election as a Director, (A) all information with respect to such candidate for nomination that would be required to be set forth in a Stockholder’s notice pursuant to this Section 2.14 if such candidate for nomination were a Nominating Person; (B) all information relating to such candidate for nomination that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of Directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such candidate’s written consent to being named in the Corporation’s proxy statement as a nominee and to serving as a Director if elected); (C) a description of any direct or indirect material interest in any material contract or agreement between or among any Nominating Person, on the one hand, and each candidate for nomination or any other participants in such solicitation, on the other hand, including all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such Nominating Person were the “registrant” for purposes of such rule and the candidate for nomination were a Director or executive officer of such registrant; and (D) a completed and signed questionnaire, representation and agreement as provided in Section 2.14(f).

 

(d)           The term “Nominating Person” means (a) the Stockholder providing the notice of the nomination proposed to be made at the meeting of the Stockholders; (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the nomination proposed to be made at the meeting is made; and (c) any other participant in such solicitation.

 

(e)           A Stockholder providing notice of any nomination proposed to be made at a meeting of the Stockholders shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.14 shall be true and correct as of the record date for notice of the meeting and as of the date that is ten business days prior to the meeting or any adjournment or postponement of the meeting. Any such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five business days after the record date for notice of the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight business days prior to the date for the meeting or, if practicable, any adjournment or postponement of the meeting. In the event such delivery is not practicable, delivery shall be effected on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten business days prior to the meeting or any adjournment or postponement thereof).

 

 

(f)           To be eligible to be a candidate for election as a Director at an annual or special meeting of the Stockholders, a candidate must be nominated in the manner prescribed in this Section 2.14. Whether nominated by the Board of Directors or by a Stockholder of record, any candidate must have previously delivered (in accordance with the time period prescribed for delivery in a notice to such candidate given by or on behalf of the Board of Directors), to the Secretary at the principal executive offices of the Corporation: (a) a completed written questionnaire (in the form provided by the Corporation) with respect to the background, qualifications, stock ownership and independence of such candidate for nomination; and (b) a written representation and agreement (in the form provided by the Corporation) that such candidate for nomination (A) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation or reimbursement for service as a Director that has not been disclosed in such written questionnaire and (B) if elected as a Director, will comply with all applicable corporate governance, conflict of interest, confidentiality, stock ownership and trading and other policies and guidelines of the Corporation applicable to all Directors and in effect during such person’s term in office as a Director (and, if requested by any candidate for nomination, the Secretary shall provide to such candidate for nomination all such policies and guidelines then in effect).

 

(g)           The Board of Directors may also require any proposed candidate for nomination as a Director to furnish such other information as may reasonably be requested by the Board of Directors in writing prior to the meeting of Stockholders at which such candidate’s nomination is to be acted upon in order for the Board of Directors to determine the eligibility of such candidate for nomination to be an independent Director in accordance with the Corporation’s Corporate Governance Guidelines.

 

(h)           In addition to the requirements of this Section 2.14 with respect to any nomination proposed to be made at a meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such nominations.

 

(i)            No candidate shall be eligible for nomination as a Director unless such candidate for nomination and the Nominating Person seeking to place such candidate’s name in nomination has complied with this Section 2.14. If the facts warrant, the presiding officer at the meeting shall determine that a nomination was not properly made in accordance with this Section 2.14. In the event of any such determination, the presiding person shall announce their determination to the meeting and the defective nomination shall be disregarded. Any ballots cast for the candidate in question (but in the case of any form of ballot listing other qualified nominees, only the ballots case for the nominee in question) shall be void and of no force or effect.

 

(j)            Notwithstanding anything to the contrary in these By-laws, no candidate for nomination shall be eligible to be seated as a Director unless nominated and elected in accordance with this Section 2.14.

 

(k)           Notwithstanding the foregoing provisions of this Section 2.14, unless otherwise required by law, if any Nominating Person provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act and subsequently fails to comply with the requirements of Rule 14a-19(a)(2) and Rule 14a-19(a)(3) promulgated under the Exchange Act, then the Corporation shall disregard any proxies or votes solicited for the Nominating Person’s nominee. Upon request by the Corporation, if any Nominating Person provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act, such Nominating Person shall deliver to the Corporation, no later than five business days prior to the applicable meeting, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act.

 

 

Section 2.15            Delivery to the Corporation. Whenever this Article II requires one or more persons (including a record or beneficial owner of Stock) to deliver a document or information to the Corporation or any officer, employee or agent of the Corporation, such document or information shall be in writing exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation, overnight courier service) or by certified or registered mail, return receipt requested. Without limiting the generality of the foregoing, the requirements set forth in the preceding sentence shall apply to any notice, request, questionnaire, revocation, representation or other document or agreement and the Corporation shall not be required to accept delivery of any document not in such written form or so delivered. For the avoidance of doubt, the Corporation expressly opts out of Section 116 of the DGCL with respect to the delivery of information and documents to the Corporation required by this Article II.

 

Article III.
Board of Directors

 

Section 3.01            Powers. Except as otherwise provided by the Certificate of Incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

 

Section 3.02            Number; Tenure; Qualifications. Subject to the Certificate of Incorporation and the rights of holders of any series of preferred Stock to elect Directors, the total number of Directors constituting the entire Board of Directors shall be fixed from time to time exclusively by resolution of the Board of Directors, each of whom shall be a natural person. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires. The Directors shall be classified in the manner provided in the Certificate of Incorporation. Each Director shall hold office until such time as provided in the Certificate of Incorporation. Directors need not be Stockholders to be qualified for election or service as a Director.

 

Section 3.03            Election, Qualification and Term of Office of Directors. Except as provided in these By-laws, and subject to the Certificate of Incorporation, each Director, including a Director elected to fill a vacancy or newly created directorship, shall hold office until the expiration of the term of the class, if any, for which elected and until such Director’s successor is elected and qualified or until such Director’s earlier death, resignation, disqualification or removal. Directors need not be Stockholders. The Certificate of Incorporation or these By-laws may prescribe qualifications for Directors.

 

 

Section 3.04            Resignation and Vacancies.

 

(a)           Any Director may resign at any time upon notice given in writing or by electronic transmission to the Corporation. The resignation shall take effect at the time specified in such writing or electronic transmission or upon the happening of an event specified in such notice or electronic transmission, and if no time or event is specified, at the time of its receipt. When one or more Directors so resigns and the resignation is effective at a future date or upon the happening of an event to occur on a future date, a majority of the Directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies. The appointment of the newly elected directors shall take effect upon the resignation or resignations of such resigning Directors and each Director so chosen shall hold office as provided in Section 3.03.

 

(b)           Unless otherwise provided in the Certificate of Incorporation or these By-laws, vacancies resulting from the death, resignation, disqualification or removal of any Director, and newly created directorships resulting from any increase in the authorized number of Directors shall be filled only by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director.

 

Section 3.05            Regular Meetings. Regular meetings of the Board of Directors may be held at such places, if any, within or without the State of Delaware. Such regular meetings shall be held at times designated by the Board of Directors and publicized among all Directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other means of electronic transmission. No further notice shall be required for regular meetings of the Board of Directors.

 

Section 3.06            Special Meetings. Special meetings of the Board of Directors may be called by the Chairperson, the Chief Executive Officer, the President, the Secretary or a majority of the Directors then in office. Any such special meetings shall be held at such time, date and place, if any, within or without the State of Delaware as they shall fix. Notice to Directors of the date, place and time of any special meeting of the Board of Directors shall be given to each Director by the Secretary or by the officer or one of the Directors calling the meeting. Such notice may be given in person, by United States first-class mail, or by e-mail, telephone, telecopier, facsimile or other means of electronic transmission. If the notice is delivered in person, by e-mail, telephone, telecopier, facsimile or other means of electronic transmission, it shall be delivered or sent at least 24 hours before the time of holding of the meeting. If the notice is sent by mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. The notice need not specify the place of the meeting if the meeting is to be held at the Corporation’s principal executive office nor the purpose of the meeting.

 

Section 3.07            Place of Meetings; Telephonic Meetings. The Board of Directors may hold meetings, both regular and special, either within or outside the State of Delaware. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, Directors may participate in any meetings of the Board of Directors or a committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting of the Board of Directors pursuant to this Section 3.07 shall constitute presence in person at such meeting.

 

 

Section 3.08            Quorum; Vote Required for Action. Unless otherwise provided by the Certificate of Incorporation, at all meetings of the Board of Directors a majority of the total number of Directors shall constitute a quorum for the transaction of business. Notwithstanding the foregoing and solely for the purposes of filling vacancies pursuant to Section 3.04, a meeting of the Board of Directors may be held if a majority of the Directors then in office participate in such meeting. The affirmative vote of a majority of the Directors present at any meeting of the Board of Directors at which a quorum is present shall be the act of the Board of Directors, except as may be otherwise specifically required by applicable law, the Certificate of Incorporation or these By-laws. If a quorum is not present at any meeting of the Board of Directors, then the Directors present at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

 

Section 3.09            Organization. Meetings of the Board of Directors shall be presided over by the Chairperson, or in such person’s absence by the person whom the Chairperson shall designate, or in the absence of the foregoing persons by a chairperson chosen at the meeting by the affirmative vote of a majority of the Directors present at the meeting. The Secretary shall act as secretary of the meeting, but in such person’s absence, the chairperson of the meeting may appoint any person to act as secretary of the meeting.

 

Section 3.10            Action by Unanimous Consent of Directors. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting of the Board of Directors if all members of the Board of Directors or such committee consent in writing or by electronic transmission. Thereafter, the writing or writings or electronic transmissions shall be filed with the minutes of proceedings of the Board of Directors or such committee in accordance with applicable law. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Such action by written consent or consent by electronic transmission shall have the same force and effect as a unanimous vote of the Board of Directors.

 

Section 3.11            Compensation of Directors. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, the Board of Directors shall have the authority to fix the compensation, including fees and reimbursements of expenses and equity compensation, of Directors for services to the Corporation in any capacity. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation from the Corporation for such service. Any Director may decline any or all such compensation payable to such Director in such person’s discretion.

 

Section 3.12            Chairperson. The Board of Directors may appoint from its members a chairperson (the “Chairperson”). The Board of Directors may, in its sole discretion, from time to time appoint one or more vice chairpersons (each, a “Vice Chairperson”), each of whom in such capacity shall report directly to the Chairperson.

 

 

Article IV.
Committees

 

Section 4.01            Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the Directors. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of any committee, the member or members present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum and may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. To the extent permitted by applicable law and to the extent provided in a resolution of the Board of Directors, any such committee may exercise all of the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation (if one is adopted) to be affixed to all papers that may require it. No such committee shall have the power or authority, however, to: (i) approve or adopt, or recommend to the Stockholders, any action or matter expressly required by the DGCL to be submitted to Stockholders for approval; or (ii) adopt, amend or repeal any bylaw of the Corporation. Except as otherwise provided in the Certificate of Incorporation, these By-laws, or the resolution of the Board of Directors designating the committee, a committee may create one (1) or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee. Except as otherwise provided in the Certificate of Incorporation, these By-laws, or the resolution of the Board of Directors designating the committee (or resolution of the committee designating the subcommittee, if applicable), a majority of the Directors then serving on a committee or subcommittee shall constitute a quorum for the transaction of business. The vote of a majority of the members of the committee or subcommittee present at a meeting at which a quorum is present shall be the act of the committee or subcommittee. Meetings of any committee of the Board of Directors may be held at any time or place, if any, within or without the State of Delaware whenever called by the Chairperson or a majority of the members of such committee.

 

Section 4.02            Committee Minutes. Each committee of the Board of Directors shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

 

Section 4.03            Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules, each such committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article III.

 

Article V.
Officers

 

Section 5.01            Officers. The officers of the Corporation shall include a Chief Executive Officer, a President and a Secretary. The Corporation may also have, at the discretion of the Board of Directors, a Chairperson, a Vice Chairperson, a Chief Financial Officer, a Treasurer, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Assistant Treasurers, one or more Assistant Secretaries, and any such other officers as may be appointed in accordance with the provisions of these By-laws. Each officer of the Corporation shall hold office for such term as may be prescribed by the Board of Directors and until such person’s successor is duly elected and qualified or until such person’s earlier death, resignation or removal. No officer need be a Stockholder or Director.

 

 

Section 5.02            Appointment of Officers. The Board of Directors shall appoint the officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 5.03.

 

Section 5.03            Subordinate Officer. The Board of Directors may appoint or empower the Chief Executive Officer of the Corporation or, in the absence of a Chief Executive Officer of the Corporation, an Executive Vice President of the Corporation, to appoint, such other officers and agents as the business of the Corporation may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these By-laws or as the Board of Directors may determine from time to time.

 

Section 5.04            Removal and Resignation of Officers. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the Board of Directors or, except in the case of an officer chosen by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. If a resignation is made effective at a later date and the Corporation accepts the future effective date, the Board of Directors may fill the pending vacancy before the effective date if the Board of Directors provides that the successor shall not take office until the effective date. Any resignation is without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.

 

Section 5.05            Vacancies in Offices. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors or as provided in Section 5.02.

 

Section 5.06            Representation of Shares of Other Entities. Unless otherwise directed by the Board of Directors, the Chairperson, the Chief Executive Officer, or an Executive Vice President of this Corporation, or any other person authorized by the Board of Directors, the Chief Executive Officer or the President, is authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares or voting securities of any other corporation or other person standing in the name of this Corporation. The authority granted by this Section 5.06 may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

 

Section 5.07            Authority and Duties of Officers. All officers of the Corporation shall respectively have such authority and perform such duties in the management of the business of the Corporation as may be provided in these By-laws or designated from time to time by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors.

 

Section 5.08            Compensation. The compensation of the officers of the Corporation for their services as such shall be fixed from time to time by or at the direction of the Board of Directors. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that such Officer is also a Director.

 

 

Article VI.
Records

 

Section 6.01            Records. A stock ledger consisting of one or more records in which the names of all of the Stockholders of record, the address and number of shares registered in the name of each such Stockholder, and all issuances and transfers of Stock are recorded in accordance with Section 224 of the DGCL shall be administered by or on behalf of the Corporation. Any records administered by or on behalf of the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device, or method, or one or more electronic networks or databases (including one or more distributed electronic networks or databases), provided that the records so kept can be converted into clearly legible paper form within a reasonable time and, with respect to the stock ledger, that the records so kept (i) can be used to prepare the list of Stockholders specified in Sections 219 and 220 of the DGCL; (ii) record the information specified in Sections 156, 159, 217(a) and 218 of the DGCL; and (iii) record transfers of Stock as governed by Article 8 of the Uniform Commercial Code as adopted in the State of Delaware.

 

Article VII.
General Matters

 

Section 7.01            Execution of Corporate Contracts and Instruments. Except as otherwise provided in these By-laws, the Board of Directors may authorize any officer or officers, or agent or agents to enter into any contract or execute any instrument in the name of and on behalf of the Corporation; such authority may be general or confined to specific instances.

 

Section 7.02            Stock Certificates.

 

(a)           The shares of Stock shall be represented by certificates, provided that the Board of Directors by resolution may provide that some or all of the shares of any class or series of Stock shall be uncertificated. Any such resolution shall not apply to shares represented by a certificate previously issued until such certificate is surrendered to the Corporation. Certificates for the shares of Stock shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of Stock represented by a certificate shall be entitled to have a certificate signed by, or in the name of the Corporation by, any two officers authorized to sign stock certificates representing the number of shares registered in certificate form. The Chairperson or Vice Chairperson, Chief Executive Officer, the President, an Executive Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary of the Corporation or any other person designated by the Board of Directors shall be specifically authorized to sign stock certificates. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if they were such officer, transfer agent or registrar at the date of issue.

 

 

(b)           The Corporation may issue the whole or any part of its shares of Stock as partly paid and subject to call for the remainder of the consideration to be paid for such shares. Upon the face or back of each stock certificate issued to represent any such partly paid shares, or upon the books and records of the Corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid and the amount paid shall be stated. Upon the declaration of any dividend on fully paid shares, the Corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid.

 

Section 7.03            Special Designation of Certificates. If the Corporation is authorized to issue more than one class of Stock or more than one series of any class, then the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of Stock or series of Stock and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or on the back of the certificate that the Corporation shall issue to represent such class or series of Stock (or, in the case of uncertificated shares, set forth in a notice provided pursuant to Section 151 of the DGCL). Except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements, there may be set forth on the face of back of the certificate that the Corporation shall issue to represent such class or series of Stock (or, in the case of any uncertificated shares, included in the aforementioned notice) a statement that the Corporation will furnish without charge to each Stockholder who so requests the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of Stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

 

Section 7.04            Lost Certificates. Except as provided in this Section 7.04, no new certificates for shares of Stock shall be issued to replace a previously issued certificate unless the latter is surrendered to the Corporation and cancelled at the same time. The Corporation may issue a new certificate of Stock or uncertificated shares in place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed. The Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

 

Section 7.05            Shares Without Certificates. The Corporation may adopt a system of issuance, recordation and transfer of its shares of Stock by electronic or other means not involving the issuance of certificates, provided the use of such system by the Corporation is permitted in accordance with applicable law.

 

Section 7.06            Construction; Definitions. Unless the context requires otherwise, the general provisions, rules of construction and definitions in the DGCL shall govern the construction of these By-laws. Without limiting this provision, the singular number includes the plural and the plural number includes the singular.

 

 

Section 7.07            Dividends. Subject to any restrictions contained in either (i) the DGCL or (ii) the Certificate of Incorporation, the Board of Directors may declare and pay dividends upon the shares of its Stock. Dividends may be paid in cash, in property or in shares of Stock. The Board of Directors may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the Corporation, and meeting contingencies.

 

Section 7.08            Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors and may be changed by the Board of Directors.

 

Section 7.09            Seal. The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board of Directors. The Corporation may use the corporate seal by causing it or a facsimile of such seal to be impressed or affixed or in any other manner reproduced.

 

Section 7.10            Transfer of Stock. Shares of Stock shall be transferable in the manner prescribed by law and in these By-laws, subject to any limitations set forth in the Certificate of Incorporation. Shares of Stock shall be transferred on the books of the Corporation only by the holder of record or by such holder’s attorney duly authorized in writing, upon surrender to the Corporation of the certificate or certificates representing such shares endorsed by the appropriate person or persons (or by delivery of duly executed instructions with respect to uncertificated shares). Any transfer of Shares shall be accompanied by such evidence of the authenticity of such endorsement or execution, transfer, authorization and other matters as the Corporation may reasonably require, along with all necessary stock transfer stamps. No transfer of Stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing the names of the persons from and to whom it was transferred. Notwithstanding anything to the contrary in these By-laws, at all times that the Corporation’s stock is listed on a stock exchange, the Shares of Stock of the Corporation shall comply with all direct registration system eligibility requirements established by such exchange, including any requirement that shares of the Corporation’s stock be eligible for issue in uncertificated or book-entry form. All issuances and transfers of Shares of Stock shall be entered on the books of the Corporation with all information necessary to comply with such direct registration system eligibility requirements, including the name and address of the person to whom the Shares of Stock are issued, the number of Shares of Stock issued and the date of issue. The Board of Directors shall have the power and authority to make such rules and regulations as it may deem necessary or proper concerning the issue, transfer and registration of Shares of Stock of the Corporation in both the certificated and uncertificated form.

 

Section 7.11            Stock Transfer Agreements. The Corporation shall have power to enter into and perform any agreement with any number of Stockholders of any one or more classes or series of Stock to restrict the transfer of shares of Stock of any one or more classes owned by such Stockholders in any manner not prohibited by the DGCL.

 

Section 7.12            Registered Stockholders. The Corporation shall: (i) be entitled to recognize the exclusive right of a person registered on its books as the owner of shares of Stock to receive dividends and to vote as such owner; and (ii) not be bound to recognize any equitable or other claim to or interest in such share or shares of Stock on the part of another person, whether or not it shall have express or other notice of such claim to or interest in such share or shares of Stock, except as otherwise provided by the laws of the State of Delaware.

 

 

Section 7.13            Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation or these By-laws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or these By-laws.

 

Article VIII.
Notice

 

Section 8.01            Delivery of Notice; Notice by Electronic Transmission.

 

(a)           Without limiting the manner by which notice otherwise may be given effectively to Stockholders, any notice to Stockholders given by the Corporation under any provisions of the DGCL, the Certificate of Incorporation, or these By-laws may be given in writing directed to the Stockholder’s mailing address (or by electronic transmission directed to the Stockholder’s electronic mail address, as applicable) as it appears on the records of the Corporation. All such notices shall be given: (1) if mailed, when the notice is deposited in the U.S. mail, postage prepaid; (2) if delivered by courier service, the earlier of when the notice is received or left at such Stockholder’s address; or (3) if given by electronic mail, when directed to such Stockholder’s electronic mail address unless the Stockholder has notified the Corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail. A notice by electronic mail must include a prominent legend that the communication is an important notice regarding the Corporation..

 

(b)           Without limiting the manner by which notice otherwise may be given effectively to Stockholders, any notice to Stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these By-laws shall be effective if given by a form of electronic transmission consented to by the Stockholder to whom the notice is given. Any such consent shall be revocable by the Stockholder by written notice or electronic transmission to the Corporation. Notwithstanding the provisions of this paragraph, the Corporation may give a notice by electronic mail in accordance with Section 8.01(a) without obtaining the consent required by this Section 8.01(b).

 

(c)           Any notice given pursuant to Section 8.01(b) shall be deemed given: (i) if by facsimile telecommunication, when directed to a number at which the Stockholder has consented to receive notice; (ii) if by a posting on an electronic network together with separate notice to the Stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (iii) if by any other form of electronic transmission, when directed to the Stockholder. Notwithstanding the foregoing, a notice may not be given by an electronic transmission from and after the time that (1) the Corporation is unable to deliver by such electronic transmission two (2) consecutive notices given by the Corporation and (2) such inability becomes known to the Secretary or an Assistant Secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice. The inadvertent failure to discover such inability shall not invalidate any meeting or other action. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

 

Article IX.
Indemnification

 

Section 9.01            Indemnification of Directors and Officers. To the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended, the Corporation shall indemnify and hold harmless, any Director or officer of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a Director or officer of the Corporation or, while serving as a Director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership (a “covered person”), joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees, judgments, fines ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such person in connection with any such Proceeding. Notwithstanding the preceding sentence, except as otherwise provided in Section 9.04, the Corporation shall be required to indemnify a person in connection with a Proceeding initiated by such person only if the Proceeding was authorized in the specific case by the Board of Directors.

 

Section 9.02            Indemnification of Others. To the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, the Corporation shall have the power to indemnify and hold harmless, any employee or agent of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any Proceeding by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such Proceeding.

 

Section 9.03            Prepayment of Expenses. To the fullest extent not prohibited by applicable law the Corporation shall pay the expenses (including attorneys’ fees) incurred by any covered person, and may pay the expenses incurred by any employee or agent of the Corporation, in defending any Proceeding in advance of its final disposition; provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Article IX or otherwise.

 

 

Section 9.04            Determination; Claim. If a claim for indemnification (following the final disposition of such Proceeding) under this Article IX is not paid in full within 60 days, or a claim for advancement of expenses under this Article IX is not paid in full within 30 days, after a written claim has been received by the Corporation the claimant may thereafter (but not before) file suit to recover the unpaid amount of such claim. If successful in whole or in part, the claimant shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law, including reasonable attorneys’ fees. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the Corporation) that the claimant has not met the standards of conduct that make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed. The burden of proof in such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because such claimant has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

 

Section 9.05            Non-Exclusivity of Rights. The rights conferred on any person by this Article IX shall not be exclusive of any other rights that such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these By-laws, agreement, vote of Stockholders or disinterested Directors or otherwise.

 

Section 9.06            Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee, fiduciary or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust enterprise or non-profit entity against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of the DGCL.

 

Section 9.07            Other Indemnification. The Corporation’s obligation, if any, to indemnify or advance expenses to any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or non-profit entity shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.

 

Section 9.08            Continuation of Indemnification. The rights to indemnification and to prepayment of expenses provided by, or granted pursuant to, this Article IX shall continue notwithstanding that the person has ceased to be a Director or officer of the Corporation and shall inure to the benefit of the estate, heirs, executors, administrators, legatees and distributes of such person.

 

 

Section 9.09            Amendment or Repeal; Interpretation.

 

(a)           The provisions of this Article IX shall constitute a contract between the Corporation, on the one hand, and, on the other hand, each individual who serves or has served as a Director or officer of the Corporation (whether before or after the adoption of these By-laws), in consideration of such person’s performance of such services. Pursuant to this Article IX, the Corporation intends to be legally bound to each such current or former Director or officer of the Corporation. With respect to current and former Directors and officers of the Corporation, the rights conferred under this Article IX are present contractual rights and such rights are fully vested, and shall be deemed to have vested fully, immediately upon adoption of theses By-laws. With respect to any Directors or officers of the Corporation who commence service following adoption of these By-laws, the rights conferred under this provision shall be present contractual rights and such rights shall fully vest, and be deemed to have vested fully, immediately upon such Director or officer commencing service as a Director or officer of the Corporation. Any repeal or modification of the foregoing provisions of this Article IX shall not adversely affect any right or protection (i) hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification or (ii) under any agreement providing for indemnification or advancement of expenses to an officer or Director of the Corporation in effect prior to the time of such repeal or modification.

 

(b)           Any reference to an officer of the Corporation in this Article IX shall be deemed to refer exclusively to the Chief Executive Officer, President, and Secretary, or other officer of the Corporation appointed by (x) the Board of Directors pursuant to Article V or (y) an officer to whom the Board of Directors has delegated the power to appoint officers pursuant to Article V, and any reference to an officer of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be deemed to refer exclusively to an officer appointed by the board of directors (or equivalent governing body) of such other entity pursuant to the certificate of incorporation and By-laws (or equivalent organizational documents) of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. The fact that any person who is or was an employee of the Corporation or an employee of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise has been given or has used the title of “Vice President” or any other title that could be construed to suggest or imply that such person is or may be an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall not result in such person being constituted as, or being deemed to be, an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

 

Article X.
Amendments

 

 The Board of Directors is expressly empowered to adopt, amend or repeal these By-laws. The Stockholders also shall have power to adopt, amend or repeal these By-laws. Notwithstanding the foregoing, such action by Stockholders shall require, in addition to any other vote required by the Certificate of Incorporation or applicable law, the affirmative vote of the holders of at least two-thirds of the voting power of all the then outstanding shares of voting Stock of the Corporation with the power to vote generally in an election of Directors, voting together as a single class.

 

 

Article XI.
Definitions

 

As used in these By-laws, unless the context otherwise requires, the following terms shall have the following meanings:

 

An “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, including the use of, or participation in, one or more electronic networks or databases (including one or more distributed electronic networks or databases), that creates a record that may be retained, retrieved and reviewed by a recipient of such record, and that may be directly reproduced in paper form by such a recipient through an automated process.

 

An “electronic mail” means an electronic transmission directed to a unique electronic mail address (which electronic mail shall be deemed to include any files attached to such electronic mail and any information hyperlinked to a website if such electronic mail includes the contact information of an officer or agent of the Corporation who is available to assist with accessing such files and information).

 

An “electronic mail address” means a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the “local part” of the address) and a reference to an internet domain (commonly referred to as the “domain part” of the address), whether or not displayed, to which electronic mail can be sent or delivered.

 

The term “person” means any individual, general partnership, limited partnership, limited liability company, corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of such entity.

 

*            *            *

 

 

Exhibit 10.5

 

 

January 15, 2019

 

Clay Sell

 

VIA Email

 

Dear Clay,

 

On behalf of the X Energy, LLC Board I am most pleased to offer you the position of Chief Executive Officer reporting to me.

 

The following terms and conditions apply:

 

	1.	You will be paid a salary of $13,461 .54 bi-weekly, which is equivalent to $350,000 annually, plus standard company benefits.
	2.	This is full-time, exempt position working in our Headquarters Office in Rockville, Maryland.
	3.	Your start date will be January 21, 2019 or as mutually agreed upon between us.
	4.	You will participate in a Results Based Incentive (RBI) plan equal to twenty percent (20%) of the current year earned salary based upon the company achieving mutually agreeable goals. The RBI will be paid within 90 days of the calendar year end 2019.
	5.	You will participate in a to-be-formed Value Rewards Plan where you and other X Energy executives will be eligible to earn ownership interest in X Energy.
	6.	You will accrue vacation at X Energy’s highest accrual level.
	7.	This offer is contingent upon your execution of X Energy’s standard employment documents covering non-disclosure, non-solicitation and non-competition.
	8.	This offer remains valid for five business days from the date of this letter.

 

Please indicate your acceptance of this offer by signing and returning the enclosed copy of this letter, along with the attached documents, to me.

 

We look forward to a mutually rewarding association. Should you have any questions, please feel free to contact me at [**].

 

Sincerely,

 

/s/ Kam Ghaffarian

Kam Ghaffarian

Executive Chairman of the Board

 

I accept the offer from X Energy as it is stated above.

 

/s/ Jeffrey Clay Sell		1/20/2019
{First Name} {Last Nmae}		{Date}

 

Jeffrey Clay Sell

 

 

www.x-energy.com

 

 

Exhibit 10.6

 

 

November 20, 2025

 

Daniel Gross

 

Via e-mail: [**]

 

Dear Daniel,

 

I am very pleased to extend to you an offer to join X-energy (the “Company”) as Executive Vice President and Chief Financial Officer. We are looking forward to the valuable contributions we know you will make to our Company, and this offer is subject only to approval by our Board of Directors, which is a standard step in our hiring of key senior executives. We look forward to welcoming you to the team. If you decide to join us, the terms and conditions of your employment will be:

 

Employer: X-energy, LLC

Start Date: December 1, 2025, or earlier if possible

Reporting to: Chief Executive Officer (J. Clay Sell)

Office/Work Location: X-energy HQ, Rockville, MD; full-time on-site (minimum of four days per week)

Base Salary: $550,000 per year; $21,153.85 bi-weekly, payable in accordance with the Company's standard payroll practices and subject to all applicable tax withholdings.

 

Annual Bonus: As a participant in the Company's Short Term Incentive Program ("STIP"), your annual target incentive will be 75% of your base salary, with actual payment based on Company and individual performance in accordance with the applicable STIP plan. Your eligibility under the STIP begins with the 2026 performance year. To receive any STIP bonus, you must be an active employee in good standing at the time bonuses are paid, typically occurring in the first quarter following the performance year.

 

Long term Incentive Plan: You will be eligible to participate in X-energy’s Long-Term Incentive Plan (“LTIP”). You will receive a grant of approximately 1,850,000 Profits Interest Units (“PIUs”), subject to final valuation and confirmation by Deloitte. The PIUs will vest ratably over four years (25% annually), subject to your continued service and all terms of the LTIP and applicable award agreements. Future LTIP grants, if any, will be made solely at the discretion of the Board.

 

PIUs are speculative and may have no monetary value at issue. The value you may realize, if any, will depend on numerous factors—including the Company’s future performance, market conditions, capital structure, dilution, and the total number of PIUs outstanding at the time of any qualifying liquidity event. The Company makes no representation or warranty regarding the timing, likelihood, or terms of any liquidity event, or the future value of any PIU.

 

Executive Perquisites and Relocation: You will receive a monthly stipend for twelve (12) months, through December 31, 2026, which will cover reasonable expenses related to executive housing, travel, and other expenses associated with commuting to the company’s Maryland headquarters. Other business travel and expenses will be subject to the company’s travel and expense policy.

 

You agree to relocate within a reasable distance of the headquarters no later than February 1, 2027. To support your relocation, you will be eligible for up to $175,000 in relocation benefits and will work with our designated relocation management provider. Upon relocation, you must provide your updated physical address and required tax forms. Please note that relocation benefits reimbursed to you are considered taxable income under IRS rules.

 

www.x-energy.com

 

 

 

If you voluntarily resign from X-energy within twenty-four (24) months after your relocation, you will be required to repay all relocation benefits previously paid by the Company.

 

Universal Leave/Paid Holidays: You will accrue 20 days/160 hours of Universal Leave annually for vacation, illness, or time away from work for personal activities. X-energy provides paid holidays in accordance with the company holiday calendar which must be used in each calendar year. The paid holidays are considered floating holidays which can be used on the assigned holiday or taken on another day of the employee’s choice. New hires are eligible to utilize any paid holidays that remain on the company schedule after their start date for that given calendar year.

 

Other Benefits: Medical, dental, life and disability insurance, and other benefits are as set forth in X-energy’s Benefits Guide, which will be provided via email. We would be happy to answer any questions that you may have regarding these benefits.

 

Employment Classification: Full-time exempt

 

Please note that your employment with X-energy is for no specified period and constitutes at will employment. This offer is contingent upon the successful completion of our pre-employment process which will include a background check and education verification. Additional verifications, such as a credit check, may be required for positions with specialized data access. Once you accept this offer, you will receive an email from the background check administrator, the company that we use to conduct this process. The email will contain a link to our background check vendor’s secure website where you will be guided through the process and can safely enter the necessary information. Please watch for this email and submit your information to the background check vendor as soon as possible.

 

You will be required to sign the Company’s standard Confidentiality and Intellectual Property Assignment Agreement. In addition, for a period of twelve (12) months following the end of your employment, you agree not to directly or indirectly solicit or induce any employee, consultant, or customer of the Company to terminate or alter their relationship with the Company, and for a period of six (6) months following the end of your employment, you agree not to engage, whether as an employee, consultant, officer, or otherwise, in any business that competes with the Company’s business as conducted during your employment within the geographic areas where the Company conducts business. You also agree not to make or cause to be made any disparaging statements, written or oral, about the Company, its affiliates, officers, directors, or employees. Any unvested equity, bonus, or other incentive compensation paid or awarded to you under this offer letter will be subject to forfeiture or repayment to the extent required by applicable law, Company policy, or (i) in the event of a breach of these obligations, (ii) voluntary resignation or (iii) termination for cause, within twelve (12) months from each payment date.

 

This offer letter shall be governed by and construed in accordance with the laws of the state of Maryland, without giving effect to any choice of law or conflict of law provisions.

 

Daniel, we are genuinely excited about the prospect of you joining us as our next Executive Vice President and Chief Financial Officer, and I look forward to working closely with you in what I am confident will be a long, successful, and rewarding partnership. To accept this offer, please sign and date below, and return to [**].

 

www.x-energy.com

 

 

 

If you have any questions, please do not hesitate to contact me.

 

Sincerely,

 

//J. Clay Sell//

 

J. Clay Sell

Chief Executive Officer

 

I accept X-energy’s offer of employment, and I acknowledge that my title will be Executive Vice President and Chief Financial Officer with all of the responsibilities and requirements attendant to such position.

 

Signature:	/s/ Daniel Gross
Name (print):	Daniel Gross
Date:	November 22, 2025

 

X Energy, LLC is committed to hiring and retaining a diverse workforce. We are proud to be an Equal Opportunity Employer and make decisions without regard to race, color, religion, creed, sex, sexual orientation, gender identity, marital status, national origin, age, veteran status, disability, or any other protected class. We welcome the employment of women, minorities, veterans, and individuals with disabilities in our workforce. If you are in need of special assistance, please contact our Human Resources Department. X Energy, LLC participates in E-Verify. Please visit the links below for more information about E-Verify and the protection of your Right to Work.

 

Right To Work Link 

If you have the right to work, don't let anyone take it away (e-verify.gov)

 

E-Verify Participation Link

E-Verify Participation Poster English and Spanish

 

 

www.x-energy.com

 

 

Exhibit 10.7

 

 

September 22, 2025

 

Dragan Popovic

[**]

 

Via e-mail: [**]

 

Dear Dragan,

 

I am very pleased to extend to you an offer to join X-energy as our next Executive Vice President and Global Chief Operating Officer. We are looking forward to the valuable contributions we know you will make to our Company, and this offer is subject only to approval by our Board of Directors, which is a standard step in our hiring of key senior executives. We do not anticipate any issues with this approval and look forward to welcoming you to the team. If you decide to join us, the terms of your employment will be:

 

Employer: X-energy Canada

 

Start Date: October 27, 2025, or earlier if possible

 

Reporting to: Chief Executive Officer (J. Clay Sell)

 

Office/Work Location: X-energy Canada, Toronto, Ontario; full-time. While you will be expected to travel to the United States or internationally for meetings, training, and consultations incidental to your role, all substantive work and productive employment will be performed in Canada.

 

Base Salary: $450,000 USD (or CAD equivalent) per year; $17,308 bi-weekly

 

Annual Bonus: As a participant in X-energy's Short Term Incentive Program ("STIP"), your annual target incentive will be 75% of your base salary, attainment of which will be based on Company and personal performance and paid as a bonus each calendar year. Your STIP award for 2025 will be a guaranteed amount of $134,375 (comprised of a pro-rated STIP target amount of $84,375, plus an additional $50,000 incentive bonus). To receive your STIP bonus, you must be an active employee in good standing at the time bonuses are issued.

 

Long-term Incentive Plan: You are eligible to participate in X-energy's Long-term Incentive Plan ("LTIP"). As such, you will receive a grant of 600,000 Profits Interest Units ("PIUs"), which will vest ratably over four years, 25% per year. Future grants may be awarded at the Company's discretion, based on Company results and your individual performance.

 

The actual value of your PIUs will depend on many factors, including, but not limited to, the Company's future performance, market conditions, capital structure, and the total number of PIUs outstanding at the time of a qualifying liquidity event (e.g., an initial public offering or a sale of the Company). The Board retains full discretion over any future grants and the treatment of PIUs at exit.

 

www.x-energy.com

 

 

 

The following is provided solely as a hypothetical illustration and should not be relied upon as a prediction or guarantee of any particular outcome. This example is based on numerous assumptions, all of which may change materially without notice. It is not intended to establish a fair market value for tax purposes, nor does it create any obligation on the part of the Company to achieve any particular valuation or to undertake any specific transaction.

 

Based on a recent value analysis conducted by our outside consultants, if the Company were to achieve a $10 billion exit value, the current estimated value of one PIU could be approximately $28.00. Under that purely hypothetical scenario, 600,000 PIUs could have a value of approximately $16,800,000. Actual results, including the value (if any) realized for your PIUs, may differ significantly from this example. All PIUs will remain subject to the terms, conditions, and restrictions set forth in the governing plan documents and award agreements, which shall control in all respects.

 

Travel, Visa Sponsorship, and Relocation Expectations. You are currently a citizen of Canada. Should it be necessary, you agree to cooperate fully with all efforts to obtain a work visa authorizing your employment in the United States. Unless and until such visa is issued, all substantive work and productive employment shall be performed in Canada. Notwithstanding the foregoing, in your capacity as Global Chief Operating Officer, you will be required to travel to the Company's headquarters in Maryland, other locations within the United States, and international sites as necessary for meetings, training, and consultations incidental to your role overseeing global operations.

 

If deemed necessary, the Company will cover your legal and filing expenses associated with obtaining and maintaining any required U.S. work authorization, and, if applicable, U.S. lawful permanent residency ("green card") or U.S. citizenship. You acknowledge that in this scenario, the expectation will be that you will take all reasonable steps, with company support, to obtain U.S. permanent residency and, if eligible and willing, U.S. citizenship within a mutually agreed timeframe. Upon issuance of the requisite work visa, you shall commence employment with X-energy LLC in the United States and shall relocate, as soon as reasonably practicable, to a residence within reasonable commuting distance of the Company's corporate headquarters in the MD/DC/VA metropolitan area.

 

The Company shall be financially responsible for the following:

 

	·	Reasonable travel (including commuting and lodging) expenses incurred from your current residence until relocation;
	·	If applicable, relocation expenses up to $135,000, which shall constitute taxable income, subject to applicable tax withholding and reporting requirements. You shall be required to update your physical address and tax forms upon relocation; and
	·	A reasonable number of house-hunting trips for you and your spouse.

 

If you resign within 24 months of relocation, you must repay all relocation expenses.

 

www.x-energy.com

 

 

 

Universal Leave/Paid Holidays: You will accrue 20 days/160 hours of Universal Leave annually for vacation, illness, or time away from work for personal activities. X-energy provides ten (10) paid holidays which must be used in each calendar year. The ten (10) paid holidays are considered floating holidays which can be used on the assigned holiday or taken on another day of the employee's choice. New hires are eligible to utilize any paid holidays that remain on the company schedule after their start date for that given calendar year.

 

Other Benefits: Medical, dental, life and disability insurance, and other benefits are as set forth in X-energy's Benefits Guide, which will be provided via email. We would be happy to answer any questions that you may have regarding these benefits.

 

Employment Classification: Full-time exempt

 

Please note that your employment with X-energy Canada is for no specified period and constitutes at will employment. This offer is contingent upon the successful completion of our pre-employment process which will include a background check and education verification. Additional verifications, such as a credit check, may be required for positions with specialized data access. Once you accept this offer, you will receive an email from ClearStar, the company that we use to conduct this process. The email will contain a link to ClearStar's secure website where you will be guided through the process and can safely enter the necessary information. Please watch for this email and submit your information to ClearStar as soon as possible.

 

Dragan, I am genuinely excited about the prospect of you joining us as our next Executive Vice President and Global Chief Operating Officer, and I look forward to working closely with you in what I am confident will be a long, successful, and rewarding partnership. To accept this offer, please sign and date below, and return

 

If you have any questions, please do not hesitate to contact me.

 

Sincerely,

 

//J. Clay Sell//

 

J. Clay Sell

Chief Executive Officer

 

www.x-energy.com

 

 

 

I accept X-energy's offer of employment, and I acknowledge that my title will be Executive Vice President and Global Chief Operating Officer with all of the responsibilities and requirements attendant to such position.

 

Signature:	/s/ Dragan Popovic
Name (print):	Dragan Popovic
Date:	Sept 22, 2025

 

X energy, LLC and it's affiliated companies, are committed to hiring and retaining a diverse workforce. We are proud to be an Equal Opportunity Employer and make decisions without regard to race, color, religion, creed, sex, sexual orientation, gender identity, marital status, national origin, age, veteran status, disability, or any other protected class. We welcome the employment of women, minorities, veterans, and individuals with disabilities in our workforce. If you are in need of special assistance, please contact our Human Resources Department.

 

X Energy, LLC and it's affiliated entities, participates in E-Verify. Please visit the links below for more information about E-Verify and the protection of your Right to Work.

 

Right To Work Link

If you have the right to work, don’t let anyone take it away (e-verify.gov)

 

E-Verify Participation Link

E-Verify Participation Poster English and Spanish

 

www.x-energy.com

 

 

 

Exhibit 10.10

 

 

X-ENERGY REACTOR COMPANY, LLC

 

EIGHTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT

 

Dated as of              , 2026

 

 

THE MEMBERSHIP INTERESTS REPRESENTED BY THIS EIGHTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH MEMBERSHIP INTERESTS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION FROM SUCH ACT AND LAWS, AND COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH IN THIS AGREEMENT.

 

 

 

TABLE OF CONTENTS

 

Page

 

Article I. DEFINITIONS		2
Article II. ORGANIZATIONAL MATTERS		19
Section 2.01	Formation of the Company	19
Section 2.02	Eighth Amended and Restated Limited Liability Company Agreement	19
Section 2.03	Name	19
Section 2.04	Purpose; Powers	20
Section 2.05	Principal Office; Registered Office	20
Section 2.06	Term	20
Section 2.07	No State-Law Partnership	20
Section 2.08	Liability	20
Article III. MEMBERS; UNITS; CAPITALIZATION		21
Section 3.01	Members	21
Section 3.02	Units	22
Section 3.03	Recapitalization; the Corporation’s Capital Contribution; the Corporation’s Purchase of Common Units and Common Warrants	23
Section 3.04	Authorization and Issuance of Additional Units and Warrants	23
Section 3.05	Repurchase or Redemption	25
Section 3.06	Certificates	26
Section 3.07	Negative Capital Accounts	26
Section 3.08	No Withdrawal	26
Section 3.09	Loans From Members	26
Section 3.10	Corporate Stock Option Plans and Equity Plans	26
Section 3.11	Dividend Reinvestment Plan, Cash Option Purchase Plan or Other Plan	27
Article IV. DISTRIBUTIONS		27
Section 4.01	Distributions	27
Article V. CAPITAL ACCOUNTS; ALLOCATIONS; TAX MATTERS		29
Section 5.01	Capital Accounts	29
Section 5.02	Allocations	30
Section 5.03	Special Allocations	31
Section 5.04	Tax Allocations	33
Section 5.05	Tax Withholding	34

 

 

Article VI. MANAGEMENT		36
Section 6.01	Authority of the Manager; Officer Delegation	36
Section 6.02	Actions of the Manager	37
Section 6.03	Resignation; No Removal	37
Section 6.04	Vacancies	37
Section 6.05	Transactions Between the Company and the Manager	37
Section 6.06	Reimbursement for Expenses	38
Section 6.07	Limitation of Liability of Manager	38
Section 6.08	Investment Company Act	39
Article VII. RIGHTS AND OBLIGATIONS OF MEMBERS AND THE MANAGER		39
Section 7.01	Limitation of Liability and Duties of Members	39
Section 7.02	Lack of Authority	40
Section 7.03	No Right of Partition	40
Section 7.04	Indemnification	41
Article VIII. BOOKS, RECORDS, ACCOUNTING AND REPORTS, AFFIRMATIVE COVENANTS		42
Section 8.01	Records and Accounting	42
Section 8.02	Fiscal Year	42
Section 8.03	Inspection Rights	42
Article IX. TAX MATTERS		42
Section 9.01	Preparation of Tax Returns	42
Section 9.02	Tax Elections	43
Section 9.03	Company Representative	43
Article X. RESTRICTIONS ON TRANSFER OF UNITS; CERTAIN TRANSACTIONS		44
Section 10.01	Transfers by Members	44
Section 10.02	Permitted Transfers	44
Section 10.03	Restricted Units Legend	44
Section 10.04	Transfer	45
Section 10.05	Assignee’s Rights	45
Section 10.06	Assignor’s Rights and Obligations	45
Section 10.07	Overriding Provisions	46
Section 10.08	Spousal Consent	47
Section 10.09	Certain Transactions with respect to the Corporation	47
Article XI. REDEMPTION AND DIRECT EXCHANGE RIGHTS		49
Section 11.01	Redemption Right of a Member	49
Section 11.02	Election and Contribution of the Corporation	53
Section 11.03	Direct Exchange Right of the Corporation	53

 

 

Section 11.04	Reservation of shares of Class A Common Stock; Listing; Certificate of the Corporation	54
Section 11.05	Effect of Exercise of Redemption or Direct Exchange	55
Section 11.06	Tax Treatment	55
Article XII. ADMISSION OF MEMBERS		56
Section 12.01	Substituted Members	56
Section 12.02	Additional Members	56
Article XIII. WITHDRAWAL AND RESIGNATION; TERMINATION OF RIGHTS		56
Section 13.01	Withdrawal and Resignation of Members	56
Article XIV. DISSOLUTION AND LIQUIDATION		57
Section 14.01	Dissolution	57
Section 14.02	Winding Up	57
Section 14.03	Deferment; Distribution in Kind	58
Section 14.04	Cancellation of Certificate	58
Section 14.05	Reasonable Time for Winding Up	58
Section 14.06	Return of Capital	58
Article XV. GENERAL PROVISIONS		59
Section 15.01	Power of Attorney	59
Section 15.02	Confidentiality	59
Section 15.03	Amendments	61
Section 15.04	Title to Company Assets	61
Section 15.05	Addresses and Notices	62
Section 15.06	Binding Effect; Intended Beneficiaries	62
Section 15.07	Creditors	63
Section 15.08	Waiver	63
Section 15.09	Counterparts	63
Section 15.10	Applicable Law; Jurisdiction	63
Section 15.11	Severability	64
Section 15.12	Further Action	64
Section 15.13	Execution and Delivery by Electronic Signature and Electronic Transmission	64
Section 15.14	Right of Offset	64
Section 15.15	Entire Agreement	64
Section 15.16	Remedies	65
Section 15.17	Descriptive Headings; Interpretation	65

 

 

Schedules

 

Schedule 1	–	Schedule of Pre-IPO Members
Schedule 2	–	Schedule of Members

 

Exhibits

 

Exhibit A	–	Form of Joinder Agreement
Exhibit B-1	–	Form of Agreement and Consent of Spouse
Exhibit B-2	–	Form of Spouse’s Confirmation of Separate Property
Exhibit C	–	Policy Regarding Certain Equity Issuances

 

 

X-ENERGY REACTOR COMPANY, LLC

 

EIGHTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT

 

This EIGHTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, together with all schedules, exhibits and annexes to this Agreement, this “Agreement”) of X-Energy Reactor Company, LLC, a Delaware limited liability company (the “Company”), dated as of             , 2026 (the “Effective Date”), is entered into by and among the Company, X-Energy Inc., a Delaware corporation (the “Corporation”), in its capacity as a Member and the sole managing member of the Company, each of the other Existing Members (as defined herein), and each other Person who is or at any time becomes a Member in accordance with the terms of this Agreement.

 

RECITALS

 

WHEREAS, unless the context otherwise requires, capitalized terms used in this Agreement have the meaning given to them in Article I;

 

WHEREAS, the Company was formed as a limited liability company pursuant to and in accordance with the Delaware Act by the filing of the Certificate of Formation of the Company (the “Certificate of Formation”) with the Secretary of State of the State of Delaware on December 14, 2018;

 

WHEREAS, prior to the Effective Date, the Company was governed by the Seventh Amended and Restated Limited Liability Company Agreement of the Company, effective as of November 21, 2025 ( the “Seventh A&R LLC Agreement”), which the parties listed on Schedule 1 to this Agreement executed in their capacity as members (collectively, the “Pre-IPO Members”);

 

WHEREAS, on                      , the Corporation intends to issue shares of its Class A Common Stock in an initial public offering of its Class A Common Stock (the “IPO”);

 

WHEREAS, in connection with the IPO, the Company, the Corporation and the Pre-IPO Members desire to recapitalize and convert the Original Units into Common Units (as defined below) (the “Recapitalization”) as provided herein;

 

WHEREAS, the Corporation will sell shares of its Class A Common Stock to public investors in the IPO and will use the net proceeds received from the IPO (the “IPO Net Proceeds”) to purchase newly issued Common Units from the Company pursuant to the IPO Common Unit Subscription Agreement(the “Unit Purchase”);

 

WHEREAS, the Corporation may issue additional shares of Class A Common Stock in connection with the IPO as a result of the exercise by the underwriters of their over-allotment option (the “Over-Allotment Option”) and, if the Over-Allotment Option is exercised in whole or in part, any additional net proceeds (the “Over-Allotment Option Net Proceeds”) shall be used by the Corporation to purchase newly issued Common Units from the Company and Common Units held by the Members;

 

 

WHEREAS, immediately following the consummation of the IPO and pursuant to the Unit Purchase, the Corporation will become the managing member of XERC and XERC and the Corporation will effectuate certain other transactions to combine the businesses of XERC and the Corporation;

 

WHEREAS, in connection with the foregoing matters, the Company and the Members (including the Pre-IPO Members) desire to amend and restate the Seventh A&R LLC Agreement in its entirety as of the Effective Date to reflect, among other things: (a) the Recapitalization, (b) the addition of the Corporation as a Member and its designation as sole managing member of the Company; and (c) the other rights and obligations of the Members, the Company, the Manager and the Corporation, in each case, as provided and agreed upon in the terms of this Agreement as of the Effective Date, at which time the Seventh A&R LLC Agreement shall be superseded entirely by this Agreement and shall be of no further force or effect.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Seventh A&R LLC Agreement is amended and restated in its entirety and the Company, the Corporation and the other Members, each intending to be legally bound, agree as follows:

 

Article I.
DEFINITIONS

 

The following definitions shall be applied to the terms used in this Agreement for all purposes, unless otherwise clearly indicated to the contrary.

 

“Additional Member” has the meaning set forth in Section 12.02.

 

“Adjusted Capital Account Deficit” with respect to the Capital Account of any Member as of the end of any Taxable Year means the amount by which the balance in such Capital Account is less than zero. For this purpose, such Member’s Capital Account balance shall be:

 

(a)

reduced for any items described in Treasury Regulations Sections 1.704- 1(b)(2)(ii)(d)(4), (5), and (6); and

 

(b)

increased for any amount such Member is obligated to contribute or is treated as being obligated to contribute to the Company pursuant to Treasury Regulations Sections 1.704-1(b)(2)(ii)(c) (relating to partner liabilities to a partnership) or 1.704-2(g)(1) and 1.704-2(i)(5) (relating to minimum gain).

 

“Admission Date” has the meaning set forth in Section 10.06.

 

“Affiliate” (and with correlative meaning “Affiliated”) with respect to a specified Person means each other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. The term “control” (including with correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of Voting Securities or by contract or other agreement or otherwise) of a Person. With respect to each Member other than the Corporation, each of the following shall be deemed an “Affiliate”: (a) a trust, family limited partnership or similar estate planning vehicle, under which the distribution of Units may be made only to beneficiaries who are such Member, such Member’s current or former spouse, siblings, parents, or spouse’s or former spouse’s parents or siblings or lineal descendants (whether natural or adopted) of the Member, such Member’s current or former spouse, siblings, parents or current or former spouse’s parents or siblings and any charitable foundation of such Member; (b) a charitable remainder trust, the income of which shall be paid to such Member during such Member’s life; and (c) such Member’s current or former spouse, siblings, parents, or current or former spouse’s parents or siblings or lineal descendants (whether natural or adopted) of the Member, such Member’s current or former spouse, siblings, parents or current or former spouse’s siblings or parents and any charitable foundation or other charitable donee of such Member.

 

 

“Agreement” has the meaning set forth in the Preamble.

 

“Allocation Period” means, as applicable, the period (a) beginning the day following the end of a prior Allocation Period, and (b) ending: (i) on the last day of each Fiscal Year; (ii) the day preceding any day in which an adjustment to the Book Value of the Company’s properties pursuant to clauses (b)(i), (b)(ii), (b)(iii) or (b)(v) of the definition of Book Value occurs; (iii) immediately after any day in which an adjustment to the Book Value of the Company’s properties pursuant to clause (b)(iv) of the definition of Book Value occurs; or (iv) on any other date determined by the Manager.

 

“Assignee” means a Person to whom a Unit has been transferred but who has not become a Member pursuant to Article XII.

 

“Assumed Tax Liability” with respect to any Member means an amount equal to the excess of (i) the product of (A) the Distribution Tax Rate multiplied by (B) the estimated or actual cumulative taxable income or gain of the Company, as determined for federal income tax purposes (for the avoidance of doubt, including taking into account the character of items when determining whether income and losses can be offset), allocated to such Member for the current and all prior Taxable Years (or portions of such Taxable Years), less prior losses of the Company allocated to such Member for such Taxable Years (or portions of such Taxable Years), to the extent such prior losses are available to reduce such income (for the avoidance of doubt, after taking into account any limitation under Code Section 172(a)(2)(B)) and have not previously been taken into account in the calculation of Assumed Tax Liability for any prior period, in each case, as reasonably determined in good faith by the Manager over (ii) the cumulative Tax Distributions made to such Member pursuant to Section 4.01(b)(i) or any similar provision of the Seventh A&R LLC Agreement. Notwithstanding the foregoing, in the case of each Member, such Assumed Tax Liability shall take into account any Code Section 704(c) allocations (including “reverse” 704(c) allocations) to the Member and any adjustments made pursuant to Code Section 734 and 743(b). A Member’s Assumed Tax Liability shall be estimated on a quarterly basis by the Manager, taking into account estimated taxable income or loss of the Company through the end of the relevant quarterly period.

 

 

“Automatic Conversion” means any conversion of Common Stock pursuant to Section 4.5(c) of the Certificate of Incorporation.

 

“Black-Out Period” means any “black-out” or similar period under the Corporation’s policies covering trading in the Corporation’s securities to which the applicable Redeeming Member is subject (or will be subject at such time as it owns Class A Common Stock), which period restricts the ability of such Redeeming Member to immediately resell shares of Class A Common Stock to be delivered to such Redeeming Member in connection with a Share Settlement.

 

“Block Transfer” means any Redemption by a Member and any related persons (within the meaning of Section 267(b) or 707(b)(1) of the Code) in one or more transactions during any thirty (30) calendar day period of Common Units representing in the aggregate more than two percent of the total interests in the Company’s capital or profits, which meets the requirements of a “block transfer” pursuant to Treasury Regulation Section 1.7704-1(e)(2).

 

“Book Value” with respect to any property of the Company means such property’s adjusted basis for U.S. federal income tax purposes, except as follows:

 

(a)            The initial Book Value of any property contributed by a Member to the Company shall be the Fair Market Value of such property as of the date of such contribution.

 

(b)            The Book Values of all properties shall be adjusted to equal their respective fair market values to reflect any Unrealized Gain or Unrealized Loss attributable to such Company assets as of the following times: (i) the acquisition of an interest (or additional interest) in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution to the Company or in exchange for the performance of services to or for the benefit of the Company; (ii) the distribution by the Company to a Member of more than a de minimis amount of property as consideration for an interest in the Company; (iii) the liquidation of the Company within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g); (iv) the acquisition of an interest in the Company by any new or existing Member upon the exercise of a noncompensatory option (including the exercise of a Common Warrant) in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(s); or (v) any other event to the extent determined by the Manager to be permitted and necessary to properly reflect Book Values in accordance with the standards set forth in Treasury Regulation Section 1.704-1(b)(2)(iv)(q); provided, however, that adjustments pursuant to clauses (b)(i), (b)(ii) and (b)(iv) above shall be made, however, only if the Manager determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company. If any noncompensatory options are outstanding upon the occurrence of an event described in clauses (b)(i) through (b)(v) above, the Company shall adjust the Book Values of its properties in accordance with Treasury Regulation Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2).

 

 

(c)            In determining such Unrealized Gain or Unrealized Loss, the aggregate fair market value of all Company property (including cash or cash equivalents) immediately prior to the issuance of additional Equity Securities of the Company that are treated as equity for U.S. federal income tax purposes shall be determined by the Manager using such reasonable method of valuation as it may adopt. For the avoidance of doubt, the preceding sentence shall apply in the case of a Revaluation Event resulting from the exercise of a noncompensatory option (including the exercise of a Common Warrant) or a Revaluation Event in accordance with principles similar to those set forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(s), immediately after the issuance of Equity Securities of the Company that are treated as equity for U.S. federal income tax purposes acquired pursuant to the exercise of such noncompensatory option. In making its determination of the fair market values of individual properties, the Manager may: (i) reasonably determine an aggregate value for the assets of the Company that takes into account the current trading price of the Class A Common Stock, the fair market value of all other Equity Securities at such time and the amount of Company liabilities; (ii) make any reasonable adjustments necessary to reflect the difference, if any, between the fair market value of any outstanding Common Warrant (upon an exercise) and the aggregate Capital Accounts attributable to the Common Warrant (upon an exercise) to the extent of any Unrealized Gain or Unrealized Loss that has not been reflected in the Members’ Capital Accounts previously, consistent with the methodology of Treasury Regulation Section 1.704-1(b)(2)(iv)(h)(2); and (iii) allocate such aggregate value among the individual properties of the Company (in such manner as the Manager reasonably determines appropriate). Absent a contrary determination by the Manager, the aggregate fair market value of all Company assets (including cash or cash equivalents) immediately prior to a Revaluation Event shall be the value that would result in the Per Unit Capital Amount of each Common Unit that is outstanding prior to such Revaluation Event being equal to the Event Issue Value.

 

(d)            The Book Value of property distributed to a Member shall be adjusted to equal the fair market value of such property as of the date of such distribution to reflect any Unrealized Gain or Unrealized Loss attributable to any Company asset.

 

(e)            The Book Value of all property shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such property pursuant to Code Section 734(b) (including any such adjustments pursuant to Treasury Regulation Section 1.734-2(b)(1)), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) and clause (e) of the definition of Net Profits or Net Losses or Section 5.03(f). Notwithstanding the foregoing, the Book Value of property shall not be adjusted pursuant to this clause (e) if the Manager reasonably determines an adjustment pursuant to clause (b) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (e).

 

(f)            If the Book Value of property has been determined or adjusted pursuant to clauses (a), (b) or (e) of this definition, such Book Value shall thereafter be adjusted by the Depreciation taken into account with respect to such property for purposes of computing Net Profits, Net Losses and other items allocated pursuant to Section 5.02 and Section 5.03.

 

 

“Business Day” means any day other than a Saturday, Sunday or day on which banks located in New York City, New York are authorized or required by Law to close.

 

“Capital Account” means the capital account maintained for a Member in accordance with Section 5.01.

 

“Capital Contribution” with respect to any Member means the amount of any cash, cash equivalents, promissory obligations or the Fair Market Value of other property that such Member (or such Member’s predecessor) contributes (or is deemed to contribute) to the Company pursuant to Article III.

 

“cash and cash equivalents” means the cash and cash equivalents, including checks, money orders, marketable securities, short-term instruments, negotiable instruments, funds in time and demand deposits or similar accounts on hand, in lock boxes, in financial institutions or elsewhere, together with all accrued but unpaid interest thereon, and all bank, brokerage or other similar accounts.

 

“Cash Settlement” means immediately available funds in U.S. dollars in an amount equal to the Redeemed Units Equivalent; provided, that such funds were received from a Qualified Offering.

 

“Certificate” means the Company’s Certificate of Formation as filed with the Secretary of State of the State of Delaware, as amended or amended and restated from time to time.

 

“Certificate of Formation” has the meaning set forth in the Recitals.

 

“Certificate of Incorporation” means the Corporation’s Certificate of Incorporation, dated as of the date hereof, as amended, restated, and restated, supplemented or otherwise modified from time to time.

 

“Change of Control” means the occurrence of any of the following events:

 

(1) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person and its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan, and excluding the Permitted Transferees) other than a Pre-IPO Member becomes the “beneficial owner” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of voting securities representing in the aggregate more than fifty percent (50%) of the voting power of all of the outstanding voting securities of the Corporation;

 

(2) the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated a sale or other disposition, directly or indirectly, by the Corporation of all or substantially all of the Corporation’s assets (including a sale of all or substantially all of the assets of the Company);

 

(3) there is consummated a merger or consolidation of the Corporation with any other corporation or entity, and, immediately after the consummation of such merger or consolidation, the voting securities of the Corporation outstanding immediately prior to such merger or consolidation do not continue to represent, or are not converted into, voting securities representing in the aggregate more than fifty percent (50%) of the voting power of all of the outstanding voting securities of the Person resulting from such merger or consolidation or, if the surviving company is a Subsidiary, the ultimate parent thereof; or

 

 

(4) the Corporation ceases to be the sole Manager of the Company. Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred (i) by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the Class A Common Stock, Class B Common Stock, preferred stock and/or any other class or classes of capital stock of the Corporation immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in and voting control over, and own substantially all of the shares of, an entity which owns all or substantially all of the assets of the Corporation immediately following such transaction or series of transactions or (ii) in connection with any Automatic Conversion.

 

“Change of Control Date” has the meaning set forth in Section 10.09(a).

 

“Change of Control Transaction” means any Change of Control that was approved by the Corporate Board prior to such Change of Control.

 

“Class A Common Stock” means the shares of Class A common stock, par value $0.0001 per share, of the Corporation.

 

“Class B Common Stock” means the shares of Class B common stock, par value $0.0001 per share, of the Corporation.

 

“Code” means the United States Internal Revenue Code of 1986, as amended. Unless the context requires otherwise, any reference in this Agreement to a specific section of the Code shall be deemed to include any corresponding provisions of future Law as in effect for the relevant taxable period.

 

“Common Share Price” means the share price equal to the VWAP of one share of Class A Common Stock as reported on the Stock Exchange (or the exchange on which the shares of Class A Common Stock are then listed) for a period of at least 20 days out of 30 consecutive Trading Days ending on the Trading Day immediately prior to the date of determination (as adjusted as appropriate to reflect any stock splits, reverse stock splits, stock dividends, extraordinary cash dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change or transaction with respect to the Class A Common Stock). Stock dividends shall include any dividend or distribution of securities convertible into Class A Common Stock.

 

“Common Stock” means the shares of Class A Common Stock and Class B Common Stock.

 

“Common Unit” means a Unit designated as a “Common Unit” and having the rights and obligations specified with respect to the Common Units in this Agreement.

 

 

“Common Unit Percentage Interest” as among Common Units and with respect to a Member at a particular time means such Member’s percentage interest in the Common Units determined by dividing the number of such Member’s Common Units by the total number of Common Units of all Members of such class at such time. The Common Unit Percentage Interest of each Member shall be calculated to the fourth decimal place.

 

“Common Unit Redemption Price” with respect to any Redemption or Direct Exchange means the net amount (net of underwriting or similar discounts but for clarity not other transaction expenses), on a per share basis, received as a result of a substantially contemporaneous Qualified Offering of Class A Common Stock by the Corporation.

 

“Common Warrants” means warrants to purchase Common Units of the Company.

 

“Company” has the meaning set forth in the Preamble.

 

“Company Minimum Gain” means “partnership minimum gain” determined pursuant to Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

 

“Company Representative” has the meaning assigned to the term “partnership representative” in Section 6223 of the Code and any Treasury Regulations or other administrative or judicial pronouncements promulgated thereunder.

 

“Competitor” means any Person who is engaged, or after the date of this Agreement engages, in the business of nuclear reactor and fuel design engineering.

 

“Conversion” has the meaning set forth in Section 3.01(a).

 

“Corporate Board” means the board of directors of the Corporation.

 

“Corporation” has the meaning set forth in the Recitals, together with its successors and assigns.

 

“Corporation Offer” means a tender offer, share exchange offer, issuer bid, take-over bid, recapitalization, or similar transaction with respect to Class A Common Stock.

 

“Corresponding Rights” means any rights issued with respect to a share of Class A Common Stock or Class B Common Stock pursuant to a “poison pill” or similar stockholder rights plan approved by the Corporate Board.

 

“Credit Agreements” means any promissory note, mortgage, loan agreement, indenture or similar instrument or agreement to which the Company or any of its Subsidiaries is or becomes a borrower, as such instruments or agreements may be amended, restated, supplemented or otherwise modified from time to time and including any one or more refinancing or replacements of such instruments or agreements, in whole or in part, with any other debt facility or debt obligation, for as long as the payee or creditor to whom the Company or any of its Subsidiaries owes such obligation is not an Affiliate of the Company.

 

 

“Delaware Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as it may be amended from time to time, and any successor to the Delaware Limited Liability Company Act, 6 Del. C. § 18-101.

 

“Depreciation” for each applicable Allocation Period means an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such Allocation Period, except that (a) with respect to any such property the Book Value of which differs from its adjusted basis for U.S. federal income tax purposes and which difference is being eliminated by use of the “remedial method” pursuant to Treasury Regulations Section 1.704-3(d), Depreciation for such Allocation Period shall be the amount of book basis recovered for such Allocation Period under the rules prescribed by Treasury Regulations Section 1.704-3(d)(2), and (b) with respect to any other such property the Book Value of which differs from its adjusted basis for U.S. federal income tax purposes at the beginning of such Allocation Period, Depreciation shall be an amount which bears the same ratio to such beginning Book Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Period bears to such beginning adjusted basis. Notwithstanding the foregoing, if the adjusted basis for U.S. federal income tax purposes of an asset at the beginning of such Allocation Period is zero, Depreciation with respect to such asset shall be determined with reference to such beginning Book Value using any reasonable method selected by the Manager.

 

“DGCL” means the General Corporation Law of the State of Delaware, as it may be amended from time to time.

 

“Direct Exchange” has the meaning set forth in Section 11.03(a).

 

“Discount” has the meaning set forth in Section 6.06.

 

“Disinterested Majority” means a majority of the directors of the Corporate Board who are disinterested, as determined by the Corporate Board in accordance with the DGCL, with respect to the matter being considered by the Corporate Board. To the extent, however, a matter being considered by the Corporate Board is required to be considered by disinterested directors under the rules of the Stock Exchange or, if the Class A Common Stock is not listed or admitted to trading on the Stock Exchange, the principal national securities exchange on which the Class A Common Stock is listed or admitted to trading, the Securities Act or the Exchange Act, such rules with respect to the definition of disinterested director shall apply solely with respect to such matter.

 

“Distributable Cash” as of any relevant date on which a determination is being made by the Manager regarding a potential distribution pursuant to Section 4.01(a) means the amount of cash that could be distributed by the Company for such purposes in accordance with any applicable Credit Agreements (and without otherwise violating any applicable provisions of any applicable Credit Agreements) and applicable Law.

 

“Distribution” (and with correlative meaning, “Distribute”) means each distribution made by the Company to a Member with respect to such Member’s Units, whether in cash, property or securities of the Company and whether by liquidating distribution or otherwise.

 

 

“Distribution Tax Rate” with respect to any Member for any taxable period means a rate equal to the highest effective marginal combined federal, state and local income tax rate for such Taxable Year applicable to a corporate or individual taxpayer (whichever is higher) resident in Los Angeles, California, for such Fiscal Year, taking into account the character of the relevant tax items (e.g., ordinary or capital) and the deductibility of state and local income taxes for federal income tax purposes (but only to the extent such taxes are deductible under the Code), as reasonably determined by the Manager.

 

“Distribution Date” means                ,              ,               and               of each year, commencing on              ; provided, that if any such date is not a Business Day then the “Distribution Date” shall be the next Business Day immediately following such date.

 

“Effective Date” has the meaning set forth in the Preamble.

 

“Election Notice” has the meaning set forth in Section 11.01(b).

 

“Equity Plan” means any option, stock, unit, stock unit, appreciation right, phantom equity or other incentive equity or equity-based compensation plan or program, in each case, now or hereafter adopted by the Company or the Corporation, including the Corporation’s 2026 Incentive Award Plan.

 

“Equity Securities” with respect to any Person means: (a) units or other equity interests in such Person or any Subsidiary of such Person (including, with respect to the Company and its Subsidiaries, other classes or groups of the Company and its Subsidiaries having such relative rights, powers and duties as may from time to time be established by the Manager pursuant to the provisions of this Agreement, including rights, powers or duties senior to existing classes and groups of Units and other equity interests in the Company or any Subsidiary of the Company); (b) obligations, evidences of indebtedness or other securities or interests convertible or exchangeable into any equity interests in such Person or any Subsidiary of such Person; and (c) warrants, options or other rights to purchase or otherwise acquire any equity interests in such Person or any Subsidiary of such Person.

 

“Estate Planning Vehicle” means, with respect to any Member (or former Member) that is a natural person, (a) a trust which is at all times controlled by such Member (or former Member) under which a distribution of such Member’s (or former Member's) Units may be made only to beneficiaries who are such Member (or former Member), his or her spouse, his or her parents or his or her lineal descendants, (b) a charitable remainder trust which is at all times controlled by such Member (or former Member), the income from which will be paid to such Member (or former Member) during his or her life, (c) a corporation, the sole assets of which are Equity Securities in the Company, and at all times the majority and controlling shareholder of which is only such Member (or former Member) and the remaining shareholders of which are either such Member (or former Member) or his or her spouse, his or her parents or his or her lineal descendants and (d) a partnership or limited liability company, the sole assets of which are Equity Securities in the Company, and at all times the general partner or managing or majority member of which is only such Member (or former Member), and the remaining partners or members of which are either such Member (or former Member) or his or her spouse, his or her parents or his or her lineal descendants.

 

 

“Event Issue Value” with respect to any Common Unit as of any date of determination means, in the case of: (a) a Revaluation Event that includes the issuance of Common Units to the Corporation with respect to a public offering by the Corporation, the price paid by the Corporation for such Common Units (in accordance with this Agreement); or (b) any other Revaluation Event, the Closing Sale Price of the Class A Common Stock on the date of such Revaluation Event or, if the Manager determines that a value for the Common Unit other than such Closing Sale Price more accurately reflects the Event Issue Value, the value determined by the Manager.

 

“Event of Withdrawal” means the bankruptcy or dissolution of a Member or the occurrence of any other event that terminates the continued membership of a Member in the Company. “Event of Withdrawal” shall not include an event that (a) terminates the existence of a Member for U.S. federal income tax purposes (including, without limitation: (i) a change in entity classification of a Member under Treasury Regulations Section 301.7701-3; (ii) a sale of assets by, or liquidation of, a Member pursuant to an election under Sections 336 or 338 of the Code; or (iii) merger, severance, or allocation within a trust or among sub-trusts of a trust that is a Member) but that (b) does not terminate the existence of such Member under applicable state Law (or, in the case of a trust that is a Member, does not terminate the trusteeship of the fiduciaries under such trust with respect to all the Units of such trust that is a Member).

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and any applicable rules and regulations promulgated under the statute, and any successor to such statute, rules or regulations.

 

“Exchange Election Notice” has the meaning set forth in Section 11.03(b).

 

“Excise Tax Reimbursement” has the meaning set forth in Section 4.01(b)(iv).

 

“Fair Market Value” of a specific asset of the Company means the amount that the Company would receive in an all-cash sale of such asset in an arms-length transaction with a willing unaffiliated third party, with neither party having any compulsion to buy or sell, consummated on the day immediately preceding the date on which the event occurred which necessitated the determination of the Fair Market Value (and after giving effect to any transfer taxes payable in connection with such sale), as such amount is determined by the Manager (or, if pursuant to Section 14.02, the Liquidator) in its good faith judgment using all factors, information and data it deems to be pertinent.

 

“Fiscal Period” means any interim accounting period within a Taxable Year established by the Manager and which is permitted or required by Section 706 of the Code.

 

“Fiscal Year” means the Company’s annual accounting period established pursuant to Section 8.02.

 

“Seventh A&R LLC Agreement” has the meaning set forth in the Recitals.

 

“Governmental Entity” means: (a) the United States of America; (b) any other sovereign nation; (c) any state, province, county, municipal, district, territory or other political subdivision of (a) or (b) of this definition, including any county, municipal or other local subdivision of the foregoing; or (d) any agency, arbitrator or arbitral body (public or private), authority, board, body, bureau, commission, court, department, entity, instrumentality, organization (including any public international organization such as the United Nations) or tribunal exercising executive, legislative, judicial, quasi-judicial, regulatory or administrative functions of or pertaining to government on behalf of (a), (b) or (c) of this definition.

 

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time.

 

“Indemnified Person” has the meaning set forth in Section 7.04(a).

 

“Investment Company Act” means the U.S. Investment Company Act of 1940, as amended from time to time.

 

“IPO” means the initial underwritten public offering of the shares of the Corporation’s Class A Common Stock.

 

“IPO Common Unit Subscription” has the meaning set forth in Section 3.03(b).

 

“IPO Common Unit Subscription Agreement” means that certain Subscription Agreement, dated as of the Effective Date, by and between the Corporation and the Company, relating to the subscription by the Corporation for Common Units.

 

“IPO Net Proceeds” has the meaning set forth in the Recitals.

 

“IRS” means the U.S. Internal Revenue Service.

 

“Joinder” means a joinder to this Agreement, in form and substance substantially similar to Exhibit A to this Agreement.

 

“Law” means all laws, statutes, acts, constitutions, treaties, principles of common law, codes, ordinances, rules and regulations of any Governmental Entity.

 

“Liquidating Event” has the meaning set forth in Section 14.01.

 

“Liquidator” has the meaning set forth in Section 14.02.

 

“LLC Employee” means an employee of, or other service provider (including, without limitation, any management member whether or not treated as an employee for the purposes of U.S. federal income tax) to, the Company or any of its Subsidiaries, in each case acting in such capacity.

 

“Manager” has the meaning set forth in Section 6.01(a).

 

“Mandatory Redemption Right” has the meaning set forth in Section 11.07.

 

“Member” as of any date of determination means (a) each of the members named on the Schedule of Members and (b) any Person admitted to the Company as a Substituted Member or Additional Member in accordance with Article XII, but in each case only so long as such Person is shown on the Company’s books and records as the owner of one or more Units, each in its capacity as a member of the Company.

 

 

“Member Nonrecourse Debt” means liabilities of the Company treated as “partner nonrecourse debt” under Section 1.704-2(b)(4) of the Treasury Regulations.

 

“Member Nonrecourse Debt Minimum Gain” has the meaning of “partner nonrecourse debt minimum gain” set forth in Treasury Regulation Section 1.704-2(i)(2).

 

“Member Nonrecourse Deductions” in any year means the Company deductions that are characterized as “partner nonrecourse deductions” under Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Treasury Regulations.

 

“Minimum Redemption Number” with respect to a Redemption by any Member means the lesser of (i)               Common Units and (ii) all of the Common Units held by the Redeeming Member.

 

“Minority Member Redemption Date” has the meaning set forth in Section 11.01(i).

 

“Minority Member Redemption Notice” has the meaning set forth in Section 11.01(i).

 

“Net Profit” and “Net Loss” for each applicable Allocation Period means an amount equal to the Company’s taxable income or loss for such Allocation Period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, deduction or credit required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments (without duplication):

 

(a)            any income of the Company that is exempt from U.S. federal income tax and not otherwise taken into account in computing Net Profit or Net Loss pursuant to this definition of “Net Profit” and “Net Loss” shall be added to such taxable income or loss;

 

(b)            any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Profit and Net Loss pursuant to this definition of “Net Profit” and “Net Loss,” shall be subtracted from such taxable income or loss;

 

(c)            gain or loss resulting from any disposition of any asset of the Company with respect to which gain or loss is recognized for U.S. federal income tax purposes shall be computed by reference to the Book Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Book Value;

 

(d)            in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Period, computed in accordance with the definition of Depreciation;

 

 

(e)            to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or Section 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Net Profit or Net Loss;

 

(f)            if the Book Value of any asset of the Company is adjusted in accordance with clause (b) or (d) of the definition of Book Value, the amount of such adjustment shall be taken into account, in the applicable Allocation Period, as gain or loss from the disposition of such property for purposes of computing Net Profit or Net Loss; and

 

(g)            notwithstanding any other provision of this definition, any items that are specially allocated pursuant to Section 5.03 shall not be taken into account in computing Net Profit and Net Loss.

 

The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Section 5.03 shall be determined by applying rules analogous to those set forth in subparagraphs (a) through (f) above.

 

“Non-Foreign Person Certificate” has the meaning set forth in Section 11.06(a).

 

“Officer” has the meaning set forth in Section 6.01(b).

 

“Original Units” means the Class A Common Units, Class B Common Units, Series A Preferred Units, Series A-1 Preferred Units, Series B Preferred Units, Series C Preferred Units, Series C-1 Preferred Units and Series D Preferred Units (each as defined in the Seventh A&R LLC Agreement) of the Company.

 

“Other Agreements” has the meaning set forth in Section 10.04.

 

“Over-Allotment Option” has the meaning set forth in the Recitals.

 

“Over-Allotment Option Net Proceeds” has the meaning set forth in the Recitals.

 

“Partnership Tax Audit Rules” means Sections 6221 through 6241 of the Code, as amended, together with any final or temporary Treasury Regulations and other official guidance interpreting Sections 6221 through 6241 of the Code, as amended (and any analogous provision of state or local tax law).

 

“Per Unit Capital Amount” as of any date of determination means the Capital Account, stated on a per Unit basis, underlying any class of Units held by a Member.

 

“Percentage Interest” as among an individual class of Units and with respect to a Member at a particular time means such Member’s percentage interest in the Company determined by dividing the number of such Member’s Units of such class by the total number of Units of all Members of such class at such time. The Percentage Interest of each Member shall be calculated to the fourth decimal place.

 

 

“Permitted Pledge” means any pledge, hypothecation or grant of security over Units by a Member or any Affiliate thereof with respect to all or any portion of its Units (or any beneficial interest therein) to or in favor of any bank or financial institution as collateral for (i) any loan, advance, extension of credit or (ii) any derivative transaction referencing the Class A Common Stock (including, without limitation, any transaction which transfers some or all of the economic risk of ownership of Class A Common Stock, including any forward contract, equity swap, put or call, put or call equivalent position, collar, sale of exchangeable security or any similar transaction), in the case of each of clause (i) and (ii), other than a total return swap or other transaction or instrument which is deemed to transfer some or all of the beneficial ownership of any Units for U.S. federal income tax purposes.

 

“Permitted Transfer” has the meaning set forth in Section 10.02.

 

“Permitted Transferee” has the meaning set forth in Section 10.02.

 

“Person” means an individual or any corporation, partnership, limited liability company, trust, unincorporated organization, association, joint venture or any other organization or entity, whether or not a legal entity.

 

“Pre-IPO Members” has the meaning set forth in the Recitals.

 

“Prime Rate” on any date means a variable rate per annum equal to the most recent “Prime Rate” posted on the “Money Rates” page of The Wall Street Journal (or, if more than one rate is published as the Prime Rate, then the highest of such rates).

 

“pro rata,” “pro rata portion,” “according to their interests,” “ratably,” “proportionately,” “proportional,” “in proportion to,” “based on the number of Units held,” “based upon the percentage of Units held,” “based upon the number of Units outstanding,” and other terms with similar meanings, when used in the context of a number of Units of the Company relative to other Units, means as amongst an individual class of Units, pro rata based upon the number of such Units within such class of Units.

 

“Pubco Offer” has the meaning set forth in Section 10.09(b).

 

“Qualified Offering” means a follow-on or qualified public or private offering of shares of Class A Common Stock by the Corporation following the date of this Agreement.

 

“Quarterly Redemption Date” for each calendar quarter in a Restricted Fiscal Year following the consummation of the IPO, means: (a) the later to occur of either (i) the completion of the second Trading Day after the date on which the Corporation makes a public news release of its quarterly earnings for the prior calendar quarter and (ii) the first day of each calendar quarter on which directors and executive officers of the Corporation are permitted to trade under the applicable policies of the Corporation related to trading by directors and executive officers; or (b) such other date as the Corporation shall determine in its sole discretion is in the best interest of the Members (other than the Corporation). The Corporation will deliver notice of the Quarterly Redemption Date to each Member (other than the Corporation) at least 75 days prior to each Quarterly Redemption Date.

 

 

“Quarterly Tax Distribution” has the meaning set forth in Section 4.01(b)(i).

 

“Recapitalization” has the meaning set forth in the Recitals.

 

“Recapitalization Instrument” means the written consent of the Pre-IPO Members set forth in Schedule 4.

 

“Redeemed Units” has the meaning set forth in Section 11.01(a).

 

“Redeemed Units Equivalent” means the product of (a) the applicable number of Redeemed Units multiplied by (b) the Common Unit Redemption Price.

 

“Redeeming Member” has the meaning set forth in Section 11.01(a).

 

“Redemption” has the meaning set forth in Section 11.01(a).

 

“Redemption Date” has the meaning set forth in Section 11.01(a).

 

“Redemption Notice” has the meaning set forth in Section 11.01(a).

 

“Redemption Right” has the meaning set forth in Section 11.01(a).

 

“Registration Rights Agreement” means the Amended and Restated Registration Rights Agreement, dated as of the date of this Agreement, by and among the Corporation, certain of the Members as of the date of this Agreement and certain other Persons party to such Amended and Restated Registration Rights Agreement (together with any joinder to such agreement from time to time by any successor or assign to any party to such agreement).

 

“Restricted Fiscal Year” means any Fiscal Year during which the Manager determines the Company does not satisfy the private placement safe harbor of Treasury Regulations Section 1.7704-1(h).

 

“Retraction Notice” has the meaning set forth in Section 11.01(c).

 

“Revaluation Event” means an event that results in an adjustment of the Book Value of each Company property pursuant to clauses (b) and (e) of the definition of Book Value.

 

“Schedule of Members” has the meaning set forth in Section 3.01(b).

 

“SEC” means the U.S. Securities and Exchange Commission, including any successor governmental body or agency.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended, and applicable rules and regulations under such statute, and any successor to such statute, rules or regulations. Any reference in this Agreement to a specific section, rule or regulation of the Securities Act shall be deemed to include any corresponding provisions of future Law.

 

 

“Share Settlement” means a number of shares of Class A Common Stock (together with any Corresponding Rights) equal to the number of Redeemed Units.

 

“Specified Members” has the meaning set forth in Section 9.03.

 

“Stock Exchange” means the New York Stock Exchange.

 

“Subsidiary” with respect to any Person means any corporation, limited liability company, partnership, association or business entity of which: (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of such corporation is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination of such Person or one or more of the other Subsidiaries of such Person; (b) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of the voting interests of such partnership is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination of such Person or one or more of the other Subsidiaries of such Person; (c) in any case, such Person controls the management of such corporation, limited liability company, partnership, association or business entity; or (d) such business entity is a variable interest entity of that Person. References to a “Subsidiary” of the Company shall be given effect only at such times that the Company has one or more Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of the Company. “Subsidiaries” of the Company shall include all of the Company’s direct and indirect, greater than 50% owned joint ventures.

 

“Substituted Member” means a Person that is admitted as a Member to the Company pursuant to Section 12.01.

 

“Tax Distributions” has the meaning set forth in Section 4.01(b)(i).

 

“Tax Receivable Agreement” means the Tax Receivable Agreement, dated as of the date of this Agreement, by and among the Corporation and the Company, on the one hand, and the TRA Parties (as such term is defined in the Tax Receivable Agreement) party to the Tax Receivable Agreement, on the other hand (together with any joinder to such agreement from time to time by any successor or assign to any party to such agreement).

 

“Taxable Year” means the Company’s accounting period for U.S. federal income tax purposes determined pursuant to Section 9.02.

 

“Trading Day” means any day on which shares of Class A Common Stock are actually traded on the principal securities exchange or securities market on which shares of Class A Common Stock are then traded.

 

“Trading Market” means the Stock Exchange, or if the Class A Common Stock is ever listed or traded on any other national exchange or principal quotation system, such market or exchange that is at the applicable time the principal trading platform, market or exchange for the Class A Common Stock.

 

 

“Transfer” (and, with correlative meaning, “Transferring”) means any sale, transfer, assignment, redemption, pledge, encumbrance or other disposition of (whether directly or indirectly, whether with or without consideration and whether voluntarily or involuntarily or by operation of Law) (a) any interest (legal or beneficial) in any Equity Securities of the Company or (b) any equity or other interest (legal or beneficial) in any Member if substantially all of the assets of such Member consist solely of Units.

 

“Treasury Regulations” means the final, temporary and (to the extent they can be relied upon) proposed regulations under the Code, as promulgated from time to time (including corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.

 

“Underwriting Agreement” means the Underwriting Agreement, dated as of the date hereof, by and among the Corporation, J.P. Morgan Securities LLC, Jefferies LLC and Morgan Stanley & Co. LLC, as representatives of the several underwriters named therein.

 

“Unit” means a limited liability company interest in the Company representing the fractional interest of a Member in Net Profits and Net Losses (or items of income, gain, loss, deduction or credit) and Distributions of the Company, and otherwise having the rights and obligations specified with respect to “Units” in this Agreement, including, but not limited to Common Units. Notwithstanding the foregoing, any class or group of Units issued, including the Common Units, shall have the relative rights, powers and duties set forth in this Agreement applicable to such class or group of Units.

 

“Unrealized Gain” attributable to any item of Company property means, as of any date of determination, the excess, if any, of (a) the Fair Market Value of such property as of such date (as determined under clause (c) of the definition of Book Value) over (b) the Book Value of such property as of such date (prior to any adjustment to be made pursuant to clause (b) of the definition Book Value as of such date).

 

“Unrealized Loss” attributable to any item of Company property means, as of any date of determination, the excess, if any, of (a) the Book Value of such property as of such date (prior to any adjustment to be made pursuant to clause (b) of the definition of Book Value as of such date) over (b) the Fair Market Value of such property as of such date (as determined under clause (c) of the definition of Book Value).

 

“Unvested Corporate Shares” means shares of Class A Common Stock issuable pursuant to awards granted under an Equity Plan that are not Vested Corporate Shares.

 

“Vested Corporate Shares” means the shares of Class A Common Stock issued pursuant to awards granted under an Equity Plan that are vested pursuant to the terms thereof or any award or similar agreement relating thereto.

 

 

“Voting Securities” of any Person means the capital stock or other Equity Securities of such Person normally entitled to vote in the election of directors or comparable governing body of such Person.

 

“VWAP” for any security as of any day or multi-day period means the dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average). If the foregoing does not apply, “VWAP” shall mean the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg. If no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, “VWAP” shall mean the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by OTC Markets Group Inc. If the VWAP cannot be calculated for such security on such date(s) on any of the foregoing bases, the VWAP of such security on such day or multi-day period (as applicable) shall be the fair market value per share on such day or multi-day period (as applicable) as reasonably determined by the Corporation.

 

“Warrant Agreements” means warrant agreements between the Corporation and the Company, dated as of the date of this Agreement, pursuant to which, among other things, the Company will issue Common Warrants to the Corporation.

 

Article II.
ORGANIZATIONAL MATTERS

 

Section 2.01     Formation of the Company. The Company was formed on December 14, 2018 pursuant to the provisions of the Delaware Act.

 

Section 2.02     Eighth Amended and Restated Limited Liability Company Agreement. The Members execute this Agreement for the purpose of amending, restating and superseding the Seventh A&R LLC Agreement in its entirety and otherwise establishing the affairs of the Company and the conduct of its business in accordance with the provisions of the Delaware Act. During the term of the Company set forth in Section 2.06, the Members agree that the rights and obligations of the Members with respect to the Company will be determined in accordance with the terms and conditions of this Agreement and the Delaware Act. No provision of this Agreement shall be in violation of the Delaware Act. To the extent any provision of this Agreement is in violation of the Delaware Act, such provision shall be void and of no effect to the extent of such violation without affecting the validity of the other provisions of this Agreement. Neither any Member nor the Manager nor any other Person shall have appraisal rights with respect to any Units.

 

Section 2.03     Name. The name of the Company is “X-Energy Reactor Company, LLC.” The Manager in its sole discretion may change the name of the Company at any time and from time to time. Notification of any such change shall be given to all of the Members. The Company’s business may be conducted under its name and/or any other name or names deemed advisable by the Manager.

 

 

Section 2.04     Purpose; Powers. The primary business and purpose of the Company shall be to engage in such lawful acts or activities as are permitted under the Delaware Act and determined from time to time by the Manager in accordance with the terms and conditions of this Agreement. The Company shall have the power and authority to take (directly or indirectly through its Subsidiaries) all actions and engage in all activities necessary, appropriate, desirable, advisable, ancillary or incidental to accomplish the foregoing purpose.

 

Section 2.05     Principal Office; Registered Office. The principal office of the Company shall be located at such place or places as the Manager may from time to time designate, each of which may be within or outside the State of Delaware. The address of the registered office of the Company in the State of Delaware shall be c/o Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware, 19808. The registered agent for service of process on the Company in the State of Delaware at such registered office shall be Corporation Service Company. The Manager may from time to time change the Company’s registered agent and registered office in the State of Delaware.

 

Section 2.06     Term. The term of the Company commenced upon the filing of the Certificate of Formation of the Company with the office of the Secretary of State of the State of Delaware in accordance with the Delaware Act and shall continue in perpetuity unless dissolved i n accordance with the provisions of Article XIV.

 

Section 2.07     No State-Law Partnership. The Members intend that the Company not be a partnership (including a limited partnership) or joint venture, and that no Member be a partner or joint venturer of any other Member by virtue of this Agreement, for any purposes other than as set forth in the last sentence of this Section 2.07. Neither this Agreement nor any other document entered into by the Company or any Member relating to the subject matter of this Agreement shall be construed to suggest otherwise. The Members intend that the Company shall be treated as a partnership for U.S. federal and, if applicable, state or local income tax purposes, and that each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment.

 

Section 2.08     Liability. Except as otherwise provided by the Delaware Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company. No Member shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member.

 

 

Article III.
MEMBERS; UNITS; CAPITALIZATION

 

Section 3.01     Members.

 

(a)            In connection with the IPO, the Corporation was admitted as a Member and will acquire Common Units pursuant to the IPO Common Unit Subscription Agreement.

 

(b)            The Company shall maintain a schedule setting forth: (i) the name and address of each Member; (ii) the aggregate number of outstanding Units and the number and class of Units held by each Member; (iii) the Capital Account of each Member on the Effective Date; (iv) the aggregate amount of cash Capital Contributions that have been made by the Members with respect to their Units; and (v) the Fair Market Value of any property other than cash contributed by the Members with respect to their Units (including, if applicable, a description and the amount of any liability assumed by the Company or to which contributed property is subject) (such schedule, as updated and amended from time to time in accordance with the terms of this Agreement, the “Schedule of Members”). The applicable Schedule of Members in effect as of the Effective Date and after giving effect to the Recapitalization, the IPO Common Unit Subscription Agreement and any Common Units to be purchased by the Corporation from the Members with the IPO Net Proceeds is set forth as Schedule 2 to this Agreement. The Schedule of Members may be updated by the Manager in the Company’s books and records from time to time. As updated, the Schedule of Members shall be the definitive record of ownership of each Unit of the Company and all relevant information with respect to each Member. The Company shall be entitled to recognize the exclusive right of a Person registered on its records as the owner of Units for all purposes. The Company shall not be bound to recognize any equitable or other claim to or interest in Units on the part of any other Person, whether or not it shall have express or other notice of such claim or interest, except as otherwise provided by the Delaware Act. Following the date of this Agreement, no Person shall be admitted as a Member and no additional Units shall be issued except as expressly provided in this Agreement.

 

 

 

(c)           No Member shall be required or, except as approved by the Manager pursuant to Section 6.01 and in accordance with the other provisions of this Agreement, permitted to: (i) loan any money or property to the Company; (ii) borrow any money or property from the Company; or (iii) make any additional Capital Contributions.

 

Section 3.02      Units.

 

(a)            Interests in the Company shall be represented by Units, or such other securities of the Company, in each case as the Manager may establish in its discretion in accordance with the terms and subject to the restrictions of this Agreement. At the Effective Date, the Units will be comprised of a single class of Common Units.

 

(b)            Subject to compliance with Section 3.04(a), the Manager may cause the Company to: (i) issue additional Common Units; and (ii) create one or more classes or series of Units solely to the extent such new class or series of Units are substantially economically equivalent to a class of common or other stock of the Corporation or class or series of preferred stock of the Corporation, respectively. The Company may reissue any Common Units that have been repurchased or acquired by the Company. Any such issuance, and the admission of any Person as a Member in connection with such issuance, shall not be valid unless otherwise made in accordance with the provisions of this Agreement.

 

(c)            Subject to Section 15.03(b) and Section 15.03(c), the Manager may amend this Agreement, without the consent of any Member or any other Person, in connection with the creation and issuance of such classes or series of Units, pursuant to Section 3.02(b), Section 3.04(a) or Section 3.10.

 

 

Section 3.03      Recapitalization; the Corporation’s Capital Contribution; the Corporation’s Purchase of Common Units and Common Warrants.

 

(a)            Immediately prior to the Effective Date, in order to effect the Recapitalization, the number of Original Units that were issued and outstanding and held by the Pre-IPO Members prior to the Effective Date as set forth opposite the respective Pre-IPO Member’s name in Schedule 1 were converted pursuant to the Recapitalization Instrument into the number of Common Units set forth opposite the name of the respective Pre-IPO Member on the Schedule of Members attached to this Agreement as Schedule 2. Such Common Units are issued and outstanding as of the Effective Date, and the holders of such Common Units are Members under this Agreement.

 

Section 3.04      Authorization and Issuance of Additional Units and Warrants.

 

(a)            Except as otherwise determined by the Manager, the Company, the Manager and the Corporation shall undertake all actions, including an issuance, reclassification, distribution, division or recapitalization, with respect to the Common Units, the Class A Common Stock or the Class B Common Stock, as applicable, to maintain at all times: (i) a one-to-one ratio between the number of Common Units owned by the Corporation, directly or indirectly, and the number of outstanding shares of Class A Common Stock; (ii) a one-to-one ratio between the number of Common Units owned by each Member (other than the Corporation and its Subsidiaries), directly or indirectly, and the number of outstanding shares of Class B Common Stock owned by such Member, which number of Common Units owned by each Member (other than the Corporation and its Subsidiaries) shall equal the number of outstanding shares of Class B Common Stock, as applicable and (iii) a one-to-one ratio between any other outstanding Equity Securities (including any Corresponding Rights) of the Corporation and the corresponding class of Equity Securities (including any Corresponding Rights) of the Company, which are held by the Corporation (collectively, the “One-to-One Ratios”). With respect to each of clauses (i) - (iii) of the preceding sentence, for purposes of maintaining the One-to-One Ratios, the Corporation shall disregard: (A) treasury stock; or (B) preferred stock or other debt securities or Equity Securities (including any Corresponding Rights) issued by the Corporation that are convertible into or exercisable or exchangeable for Common Stock (except to the extent the net proceeds from such other securities, including any exercise or purchase price payable upon conversion, exercise or exchange of such other securities, has been contributed by the Corporation to the equity capital of the Company). In each of the foregoing cases of clause (B), the issuance of Common Stock in connection with the conversion, exercise or exchange of such preferred stock or other debt or Equity Securities, as applicable, shall not be disregarded. Except as otherwise determined by the Manager, if the Corporation issues, transfers or delivers from treasury stock or repurchases or redeems shares of Class A Common Stock in a transaction not contemplated in this Agreement, the Manager, the Corporation and the Company shall take all actions such that, after giving effect to all such issuances, transfers, deliveries, repurchases or redemptions, the number of outstanding Common Units owned, directly or indirectly, by the Corporation will equal on a one-for-one basis the aggregate number of outstanding shares of Class A Common Stock.

 

 

(b)            Except as otherwise determined by the Manager, if the Corporation issues, transfers or delivers from treasury stock or repurchases or redeems any shares of the Corporation’s preferred stock in a transaction not contemplated in this Agreement, the Manager, the Company and the Corporation shall take all actions such that, after giving effect to all such issuances, transfers, deliveries, repurchases or redemptions, the Corporation, directly or indirectly, holds (in the case of any issuance, transfer or delivery) or ceases to hold (in the case of any repurchase or redemption) Equity Securities in the Company that (in the good faith determination by the Manager) are in the aggregate substantially economically equivalent to the outstanding preferred stock of the Corporation so issued, transferred, delivered, repurchased or redeemed. Except as otherwise determined by the Manager, if the Corporation issues, transfers or delivers from treasury stock or repurchases or redeems Class B Common Stock in a transaction not contemplated in this Agreement, the Manager, the Corporation and the Company shall take all actions such that, after giving effect to all such issuances, transfers, deliveries, repurchases or redemptions, the number of outstanding Common Units owned, directly or indirectly, by the Members (other than the Corporation and its Subsidiaries), directly or indirectly, will equal on a one-for-one basis the aggregate number of outstanding shares of Class B Common.

 

(c)            Except as otherwise determined by the Manager, the Corporation and the Company shall not undertake any subdivision or combination of the Common Units, Class A Common Stock, or Class B Common Stock, that is not accompanied by an identical subdivision or combination of Class A Common Stock, Class B Common Stock or Common Units, as applicable, to maintain at all times the One-to-One Ratios. The prohibition set forth in the preceding sentence shall not apply if such subdivision or combination is necessary to maintain at all times a one-to-one ratio between either the number of Common Units owned, directly or indirectly, by the Corporation and the aggregate number of outstanding shares of Class A Common Stock and Class B Common Stock, the number of Common Units owned by Members (other than the Corporation and its Subsidiaries) and the aggregate number of outstanding shares of Class B Common Stock, owned by the Corporation, directly or indirectly, in each case as contemplated by the first sentence of this Section 3.04(c). For purposes of this Section 3.02(b), the term “subdivision” shall include any subdivision effectuated by any Unit split, stock split, Unit distribution, stock distribution, reclassification, division, recapitalization or similar event and the term “combination” shall include combinations effectuated by reverse Unit split, reverse stock split, reclassification, division, recapitalization or similar event.

 

(d)            Except in connection with a redemption of Common Units described in Article XI, if at any time the Corporation issues a share of Class A Common Stock or other Equity Security: (i) the Company shall issue to the Corporation such number of Common Units or corresponding Equity Securities as is necessary to maintain the One-to-One Ratios; and (ii) in exchange for such issuance, the net proceeds or contributed proceeds received by the Corporation with respect to the corresponding issuance of Class A Common Stock or Equity Securities shall be concurrently contributed by the Corporation to the Company except to the extent such net proceeds are used by the Corporation to acquire Common Units from a Member (other than the Corporation). If at any time the Corporation issues or redeems Class A Common Stock or Equity Securities, the Company, the Corporation and the Manager shall cooperate to issue, redeem, convert and/or cancel the Common Units or corresponding Equity Securities of the Company as necessary to maintain the One-to-One Ratios.

 

(e)            Notwithstanding anything to the contrary in this Agreement, except to the extent described in Section 3.04(a) through (d), from time to time at its sole discretion: (i) the Corporation may make loans to the Company and its Subsidiaries; and (ii) the Corporation may contribute property (including cash and/or the loans described in the foregoing clause (i)) to the Company. Upon each contribution described in the foregoing clause (ii), and after giving proper effect to all related transactions, the Company shall (x) issue to the Corporation such number of Common Units or Equity Securities of the Company as necessary to maintain the One-to-One Ratios, if any, or the economic parity between one share of Class A Common Stock, on the one hand, and one Common Unit, on the other hand, and (y) cancel such number of Common Units or Equity Securities of the Company held by Members other than the Corporation on a pro rata basis (based on the number of Common Units held by each such Member) as necessary to maintain the One-to-One Ratios or the economic parity between one share of Class A Common Stock, on the one hand, and one Common Unit, on the other hand.

 

 

(f)            The Company shall only be permitted to issue additional Common Units, and/or establish other classes or series of Units or other Equity Securities in the Company to the Persons and on the terms and conditions provided for in Section 3.02, this Section 3.04, Section 3.10 and Section 3.11. Subject to the foregoing, the Manager may cause the Company to issue additional Common Units authorized under this Agreement and/or establish other classes or series of Units or other Equity Securities in the Company at such times and upon such terms as the Manager shall determine. The Manager shall amend this Agreement as necessary in connection with the issuance of additional Common Units, to establish other classes or series of Units or other Equity Securities in the Company, or admission of additional Members under this Section 3.04. In each of the foregoing cases, such amendment shall not require any consent or acknowledgement of any other Member.

 

Section 3.05      Repurchase or Redemption.

 

(a)            Except as otherwise reasonably determined by the Manager, if at any time any shares of Class A Common Stock are repurchased or redeemed (whether by exercise of a put or call, automatically or by means of another arrangement) by the Corporation for cash, then the Manager shall cause the Company, immediately prior to such repurchase or redemption of Class A Common Stock, to redeem a corresponding number of Common Units held (directly or indirectly) by the Corporation. The aggregate redemption price for any such redemption shall be equal to the aggregate purchase or redemption price of the shares of Class A Common Stock being repurchased or redeemed by the Corporation (plus any expenses related thereto). The other terms for any such redemption shall be the same as applicable to the shares of Class A Common Stock being repurchased or redeemed by the Corporation. With respect to any other Equity Securities of the Corporation that are repurchased or redeemed (whether by exercise of a put or call, automatically or by means of another arrangement) by the Corporation for cash, then, immediately prior to such repurchase or redemption of such Equity Securities, the Manager shall cause the Company to redeem an equal number of the corresponding class or series of Equity Securities of the Company with the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Corporation held (directly or indirectly) by the Corporation, in accordance with the One-to-One Ratios. The aggregate redemption price for any such redemption shall be equal to the aggregate purchase or redemption price of the applicable Equity Securities of the Corporation being repurchased or redeemed by the Corporation (plus any expenses related thereto), if any, and upon such other terms as are the same for the applicable Equity Securities of the Corporation being repurchased or redeemed by the Corporation. If the Corporation uses funds received from distributions from the Company or the net proceeds from an issuance of Class A Common Stock to fund such repurchase or redemption, then the Company shall cancel a corresponding number of Common Units held (directly or indirectly) by the Corporation for no consideration (but only to the extent that such Common Units were issued upon the issuance of Class A Common Stock from which the redemption proceeds were obtained).

 

 

(b)            The Company may not redeem or repurchase: (i) any Common Units from the Corporation unless substantially simultaneously the Corporation redeems or repurchases an equal number of shares of Class A Common Stock for the same price per security from holders of such Class A Common Stock; or (ii) any other Equity Securities of the Company from the Corporation unless substantially simultaneously the Corporation redeems or repurchases for the same price per security an equal number of Equity Securities of Corporation of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Corporation.

 

(c)            Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make any repurchase or redemption if such repurchase or redemption would violate any applicable Law.

 

Section 3.06      Certificates. The Units shall be uncertificated unless otherwise determined by the Manager.

 

Section 3.07      Negative Capital Accounts. No Member shall be required to pay to any other Member or the Company any deficit or negative balance that may exist from time to time in such Member’s Capital Account (including upon and after dissolution of the Company).

 

Section 3.08      No Withdrawal. No Person shall be entitled to withdraw any part of such Person’s Capital Contribution or Capital Account or to receive any Distribution from the Company except as expressly provided in this Agreement.

 

Section 3.09      Loans From Members. Loans by Members to the Company shall not be considered Capital Contributions. Subject to the provisions of Section 3.01(c), the amount of any such advances shall be a debt of the Company to such Member and shall be payable or collectible in accordance with the terms and conditions upon which such advances are made.

 

Section 3.10      Corporate Stock Option Plans and Equity Plans. Nothing in this Agreement shall be construed or applied to preclude or restrain the Corporation from adopting, modifying or terminating an Equity Plan or from issuing shares of Class A Common Stock pursuant to any such plans. The Corporation may implement such Equity Plans and any actions taken under such Equity Plans (such as the grant or exercise of options to acquire shares of Class A Common Stock), whether taken with respect to or by an employee or other service provider of the Corporation, the Company or their respective Subsidiaries. Such implementation shall be in a manner determined by the Corporation in accordance with the initial implementation guidelines attached to this Agreement as Exhibit C, which may be amended by the Corporation from time to time. In its sole discretion, the Corporation may amend this Agreement (including Exhibit C) as necessary or advisable in connection with the adoption, implementation, modification or termination of an Equity Plan. In the event of such an amendment by the Corporation, the Company will provide notice of such amendment to the Members. The Company is expressly authorized to issue Units (i) in accordance with the terms of any such Equity Plan, or (ii) in an amount equal to the number of shares of Class A Common Stock issued pursuant to any such Equity Plan, without any further act, approval or vote of any Member or any other Persons.

 

 

Section 3.11      Dividend Reinvestment Plan, Cash Option Purchase Plan or Other Plan. Except as may otherwise be provided in this Article III, all amounts received or deemed received by the Corporation in respect of any dividend reinvestment plan, cash option purchase plan, or other subscription plan or agreement, either (a) shall be utilized by the Corporation to effect open market purchases of shares of Class A Common Stock, or (b) if the Corporation elects instead to issue new shares of Class A Common Stock with respect to such amounts, shall be contributed by the Corporation to the Company in exchange for additional Common Units. Upon such contribution, the Company will issue to the Corporation a number of Common Units equal to the number of new shares of Class A Common Stock so issued.

 

Article IV.
DISTRIBUTIONS

 

Section 4.01      Distributions.

 

(a)            Distributable Cash; Other Distributions.

 

(i)            After making or providing for any Distributions pursuant to Section 4.01(b), to the extent permitted by applicable Law and under this Agreement, Distributions to Members may be declared by the Manager out of Distributable Cash or other funds or property legally available for Distributions in such amounts, at such time and on such terms (including the payment dates of such Distributions) as the Manager in its sole discretion shall determine using such record date as the Manager may designate. All Distributions made under this Section 4.01(a)(i) shall be made to the Members holding Common Units, on a pro rata basis as follows: with respect to Members holding Common Units as of the close of business on such record date, on a pro rata basis in accordance with each Member’s Common Unit Percentage Interest (other than any Distributions made pursuant to Section 4.01(a)(ii)) as of the close of business on such record date. Notwithstanding the foregoing, the Manager shall have the obligation to make distributions as set forth in Section 4.01(b) and Section 14.02.

 

(ii)            In its sole discretion, the Manager, may authorize that cash be paid to the Corporation (which payment shall be made without pro rata distributions to the other Common Units) in exchange for the redemption, repurchase or other acquisition of Equity Securities in the Company that are held by the Corporation to the extent that such cash payment is used to redeem, repurchase or otherwise acquire an equal number of corresponding Equity Securities of the Corporation in accordance with Section 3.05.

 

(iii)            Notwithstanding any other provision herein to the contrary, no Distributions shall be made to any Member to the extent such Distribution would render the Company insolvent or violate the Delaware Act or any applicable Law. For purposes of the foregoing sentence, “insolvency” means the inability of the Company to meet its payment obligations when due.

 

 

(b)            Tax Distributions and Reimbursements.

 

(i)            With respect to each Taxable Year, and to the extent permitted by applicable Law, the Company shall make cash distributions (“Tax Distributions”) to each Member in an amount equal to (1) in accordance with, and to the extent of, such Member’s Assumed Tax Liability; provided, however, to the extent a Member would otherwise be entitled to receive less than its Common Unit Percentage Interest of the aggregate Tax Distributions to be paid pursuant to this Section 4.01(b)(i)(A) on any given date, then the Tax Distributions to such Member shall be increased, as necessary, to ensure that all such Tax Distributions made pursuant to this Section 4.01(b)(i)(A) are made pro rata in accordance with the Members’ respective Common Unit Percentage Interests; or (2) if the amount the Corporation would receive under clause (1) is, in the sole discretion of the Manager, reasonably expected to be less than the amount that will enable the Corporation to meet both its tax obligations and its obligations pursuant to the Tax Receivable Agreement, then: (I) the Corporation shall receive an amount that will enable the Corporation to meet both its tax obligations and its obligations pursuant to the Tax Receivable Agreement for the relevant taxable year or quarter, as applicable; and (II) the Members (other than the Corporation) shall receive an amount necessary to ensure that the Tax Distributions made pursuant to this Section 4.01(b)(i)(A), when taking into account the amount to be distributed to the Corporation under clause (2)(I), are made pro rata in accordance with the Members’ respective Common Unit Percentage Interests.

 

(ii)            Tax Distributions pursuant to Section 4.01(b)(i) shall be estimated by the Company on a quarterly basis and, to the extent feasible, shall be distributed to the Members (together with a statement showing the calculation of such Tax Distribution and an estimate of the Company’s net taxable income allocable to each Member for such period) on a quarterly basis on April 15^th, June 15^th, September 15^th and December 15^th (or such other dates for which corporations or individuals are required to make quarterly estimated tax payments for U.S. federal income tax purposes, whichever is earlier) (each, a “Quarterly Tax Distribution”). The foregoing shall not restrict the Company from making a Tax Distribution on any other date as the Company determines is necessary to enable the Members to timely make estimated income tax payments. Quarterly Tax Distributions shall take into account the estimated taxable income or loss of the Company for the Taxable Year through the end of the relevant quarterly period. A final accounting for Tax Distributions shall be made for each Taxable Year after the allocation of the Company’s actual net taxable income or loss has been determined and any shortfall in the amount of Tax Distributions a Member received for such Taxable Year based on such final accounting shall promptly be distributed to such Member. Any excess Tax Distributions a Member receives with respect to any Taxable Year shall reduce future Tax Distributions otherwise required to be made to such Member with respect to any subsequent Taxable Year, but shall not reduce Tax Distributions made to a Member to provide such Member with its Common Unit Percentage Interest of Tax Distributions made pursuant to Section 4.01(b)(i). Notwithstanding anything to the contrary in this Agreement, in its reasonable discretion, the Manager shall make equitable adjustments (downward (but not below zero) or upward) to the Members’ Tax Distributions. Any such equitable adjustments shall be made pro rata in proportion to the Members’ respective number of Common Units to take into account increases or decreases in the number of Common Units held by each Member during the relevant period.

 

 

(iii)            In the event of any audit by, or similar event with, a Governmental Entity that affects the calculation of any Member’s Assumed Tax Liability for any Taxable Year (other than an audit conducted pursuant to the Partnership Tax Audit Rules for which no election is made pursuant to Section 6226 of the Partnership Tax Audit Rules and the Treasury Regulations promulgated under the Partnership Tax Audit Rules), or in the event the Company files an amended tax return or administrative adjustment request, each Member’s Assumed Tax Liability with respect to such year shall be recalculated by giving effect to such event, taking into account interest, penalties or additions to tax. Any shortfall in the amount of Tax Distributions the Members and former Members received for the relevant Taxable Years based on such recalculated Assumed Tax Liability promptly shall be distributed to such Members and the successors of such former Members, except to the extent Distributions were made to such Members and former Members pursuant to Section 4.01(a)(i)and this Section 4.01(b) in the relevant Taxable Years sufficient to cover such shortfall.

 

(iv)            Consistent with the provision in Section 6.06, if the Corporation is subject to any excise tax pursuant to Section 4501 of the Code and any Treasury Regulations promulgated thereunder in connection with the Redemption, the Company shall, to the extent permitted by applicable Law, reimburse the Corporation (“Excise Tax Reimbursement”) in an amount equal to such excise tax obligation at such time as, in it its sole discretion, the Manager reasonably determines is necessary to enable the Corporation to timely make such excise tax payments as required by applicable law. For the avoidance of doubt, the amount of any Excise Tax Reimbursement the Corporation receives shall not reduce any other entitlement of the Corporation to distributions pursuant to this Agreement.

 

Article V.
CAPITAL ACCOUNTS; ALLOCATIONS; TAX MATTERS

 

Section 5.01      Capital Accounts.

 

(a)            The Company shall maintain a separate Capital Account for each Member according to the rules of Treasury Regulations Section 1.704-1(b)(2)(iv) and, to the extent consistent with such provisions, the following provisions:

 

(i)            To each Member’s Capital Account there shall be credited: (A) such Member’s Capital Contributions; (B) such Member’s distributive share of Net Profit and any item in the nature of income or gain that is allocated pursuant to Section 5.02 and Section 5.03; and (C) the amount of any Company liabilities assumed by such Member or that are secured by any asset distributed to such Member.

 

 

(ii)            To each Member’s Capital Account there shall be debited: (A) the amount of money and the Book Value of any asset distributed to such Member pursuant to any provision of this Agreement; (B) such Member’s distributive share of Net Loss and any items in the nature of deductions or losses that are allocated to such Member pursuant to Section 5.02 and Section 5.03; and (C) the amount of any liabilities of such Member assumed by the Company or that are secured by any asset contributed by such Member to the Company.

 

(iii)            In determining the amount of any liability for purposes of Section 5.01(a)(i) and Section 5.01(a)(ii), there shall be taken into account Section 752(c) of the Code and any other applicable provisions of the Code and the Treasury Regulations.

 

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event that the Manager shall reasonably determine that it is necessary to modify the manner in which the Capital Accounts or any debits or credits to such Capital Accounts are maintained (including debits or credits relating to liabilities that are secured by contributed or distributed property or that are assumed by the Company or the Members) to comply with the Code and Treasury Regulations or to ensure that the allocations provided for in this Section 5.01 have substantial economic effect and/or are in accordance with the Members’ interests in the Company, the Manager may (acting reasonably and in good faith) make such modification so long as such modification will not have any effect on the amounts distributed to any Person pursuant to Article XIV upon the dissolution of the Company. The Manager also may: (x) make any adjustments that are necessary or appropriate to maintain equality between Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g); and (y) make any appropriate modifications if unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulations Section 1.704-1(b).

 

(b)

 

(c)            The Company shall revalue the Capital Accounts in connection with a Revaluation Event and in accordance with the definition of Book Value. In the event of a Transfer of Units made in accordance with this Agreement, the Capital Account of the transferor that is attributable to the transferred Units shall carry over to the transferee Member in accordance with the provisions of Treasury Regulation Section 1.704-1(b)(2)(iv)(l).

 

(d)

 

Section 5.02      Allocations. After giving effect to the allocations in Section 5.03, Net Profit and Net Loss (and, to the extent the Manager determines necessary, individual items of income, gain, loss, deduction or credit) of the Company for each applicable Allocation Period shall be allocated among the Members during such Allocation Period. Such allocation shall be in a manner such that the Capital Account of each Member, immediately after making such allocation, is, as nearly as possible, equal to (i) the distributions that would be made to such Member pursuant to Section 14.02(c) if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Book Value, all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Book Value of the assets securing such liability) and the net assets of the Company were distributed, in accordance with Section 14.02(c), to the Members immediately after making such allocation, minus (ii) such Member’s share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets. Notwithstanding the foregoing, the Manager (acting reasonably and in good faith) may make allocations it deems necessary to give economic effect to the provisions in Article V, Article XIV and the other relevant provisions of this Agreement and to properly reflect each Member’s “interest in the partnership” within the meaning of Treasury Regulations Section 1.704-1(b)(3).

 

 

Section 5.03      Special Allocations.

 

(a)            Member Nonrecourse Deductions attributable to Member Nonrecourse Debt shall be allocated to the Members bearing the economic risk of loss for such Member Nonrecourse Debt as determined under Treasury Regulation Section 1.704-2(b)(4). If more than one Member bears the economic risk of loss for such Member Nonrecourse Debt, the Member Nonrecourse Deductions attributable to such Member Nonrecourse Debt shall be allocated among the Members according to the ratio in which they bear the economic risk of loss. This Section 5.03(a) is intended to comply with the provisions of Treasury Regulation Section 1.704-2(i) and shall be interpreted consistently with such Treasury Regulation Section 1.704-2(i).

 

(b)            Nonrecourse deductions (as determined according to Treasury Regulations Section 1.704-2(b)(1)) for any Taxable Year shall be allocated pro rata among the Members in accordance with their Common Unit Percentage Interests. If there is a net decrease in the Company Minimum Gain during any Taxable Year, each Member shall be allocated individual items of income and gain for such Taxable Year (and, if necessary, for subsequent Taxable Years) in the amounts and of such character as determined according to Treasury Regulations Section 1.704-2(f). This Section 5.03(b) is intended to be a minimum gain chargeback provision that complies with the requirements of Treasury Regulations Section 1.704-2(f) and shall be interpreted in a manner consistent with Treasury Regulations Section 1.704-2(f).

 

(c)            If any Member unexpectedly receives an adjustment, allocation or Distribution described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit as of the end of any Taxable Year, after all other allocations pursuant to Section 5.02 and this Section 5.03, have been tentatively made as if this Section 5.03(c) were not in this Agreement, items of income and gain for such Taxable Year shall be allocated to such Member in proportion to, and to the extent of, such Adjusted Capital Account Deficit. This Section 5.03(c) is intended to be a qualified income offset provision as described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner consistent with Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

 

(d)            If the allocation of Net Losses (or individual items of loss or deduction) to a Member as provided in Section 5.02 would create or increase an Adjusted Capital Account Deficit, there shall be allocated to such Member only that amount of Net Loss (or individual items of loss or deduction) as will not create or increase an Adjusted Capital Account Deficit. The Net Losses (or individual items of loss or deduction) that would, absent the application of the preceding sentence, otherwise be allocated to such Member shall be allocated to the other Members in accordance with their relative Common Unit Percentage Interests, subject to this Section 5.03(d).

 

 

(e)            In the event that any Member has an Adjusted Capital Account Deficit at the end of any applicable Allocation Period, such Member shall be allocated items of Company gross income, and gain in the amount of such deficit as quickly as possible. Any allocation pursuant to this Section 5.03(e) shall be made, however, only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in Section 5.02 and this Section 5.03 have been tentatively made as if Section 5.03(c) and this Section 5.03(e) were not in this Agreement.

 

(f)            To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of such asset) or loss (if the adjustment decreases the basis of such asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Profit and Net Loss. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of such Member’s interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis). Such gain or loss shall be specially allocated to such Members in accordance with their interests in the Company in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

 

(g)            The allocations set forth in Section 5.03(a) through and including Section 5.03(e) (the “Regulatory Allocations”) are intended to comply with certain requirements of Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations. The Regulatory Allocations may not be consistent with the manner in which the Members intend to allocate Net Profit and Net Loss of the Company or make Distributions. Accordingly, notwithstanding the other provisions of this Article V, but subject to the Regulatory Allocations, income, gain, deduction and loss with respect to the Company shall be reallocated among the Members so as to eliminate the effect of the Regulatory Allocations. As a result of such reallocation, the respective Capital Accounts of the Members shall be in the amounts (or as close to such amounts as possible) they would have been if Net Profit and Net Loss (and such other items of income, gain, deduction and loss) had been allocated without reference to the Regulatory Allocations. In general, the Members anticipate that this will be accomplished by specially allocating other Net Profit and Net Loss (and such other items of income, gain, deduction and loss) among the Members so that the net amount of the Regulatory Allocations and such special allocations to each such Member is zero. If in any Allocation Period there is a decrease in partnership minimum gain, or in partner nonrecourse debt minimum gain, and application of the minimum gain chargeback requirements set forth in Section 5.03(a) or Section 5.03(b) would cause a distortion in the economic arrangement among the Members, then if it does not expect that the Company will have sufficient other income to correct such distortion, the Manager may request the IRS to waive either or both of such minimum gain chargeback requirements pursuant to Treasury Regulations Section 1.704-2(f)(4). If such request is granted, this Agreement shall be applied in such instance as if it did not contain such minimum gain chargeback requirement.

 

 

Section 5.04      Tax Allocations.

 

(a)            The income, gains, losses, deductions and credits of the Company will be allocated, for federal, state and local income tax purposes, among the Members in accordance with the allocation of such income, gains, losses, deductions and credits among the Members for computing their Capital Accounts. If any such allocation is not permitted by the Code or other applicable Law, the Company’s subsequent income, gains, losses, deductions and credits will be allocated among the Members so as to reflect as nearly as possible the allocation set forth in this Section 5.04 in computing their Capital Accounts.

 

(b)            In accordance with Section 704(c) of the Code and the Treasury Regulations thereunder, income, gain, loss, and deduction with respect to any asset contributed to the capital of the Company and with respect to reverse Code Section 704(c) allocations described in Treasury Regulations Section 1.704-3(a)(6) shall, solely for applicable tax purposes, be allocated among the Members. Such allocation shall take account of any variation between the adjusted basis of such asset to the Company for U.S. federal income tax purposes and its initial Book Value or its Book Value determined pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (computed in accordance with the definition of Book Value). In the case of any variation that exists as a result of the IPO, the foregoing allocation shall be made using the “traditional method with curative allocations limited to back end gain on sale.” In the case of any other variation, the allocation shall be made using the “traditional method with curative allocations limited to back end gain on sale,” unless another method is chosen by the Manager. In the event that multiple such variations exist, Section 704(c) shall be applied in reverse chronological order. Allocations pursuant to this Section 5.04(b), Section 704(c) of the Code (and the principles thereof), and Treasury Regulations Section 1.704-1(b)(4)(i) are solely for purposes of U.S. federal (and applicable state and local) income tax purposes. Accordingly, any such allocations shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Profit or Net Loss. Allocations of tax credits, tax credit recapture, and any items related to such tax credits and tax credit recapture shall be allocated to the Members as determined by the Manager taking into account the principles of Treasury Regulations Section 1.704-1(b)(4)(ii).

 

(c)            For purposes of determining a Member’s share of the Company’s “excess nonrecourse liabilities” within the meaning of Treasury Regulations Section 1.752-3(a)(3), each Member’s interest in income and gain shall be determined pursuant to any proper method, as reasonably determined by the Manager. In making such determination in any year, the Manager shall use its reasonable best efforts to allocate a sufficient amount of the excess nonrecourse liabilities to those Members who would have at the end of the applicable Taxable Year, but for such allocation, taxable income due to the deemed distribution of money to such Member pursuant to Section 752(b) of the Code that is in excess of such Member’s adjusted tax basis in its Units. In exercising its reasonable best efforts to determine the appropriate allocation, the Manager shall use in all instances any proper method permitted under applicable Law, including without limitation the “additional method” described in Treasury Regulations Section 1.752-3(a)(3). With respect to any of the Company’s “excess nonrecourse liabilities” that arise after the Effective Date, the Manager shall not be required to allocate “excess nonrecourse liabilities” in the manner described in the preceding proviso to the extent that the Manager determines in its sole discretion made in good faith that such allocation would reasonably be expected to have a material adverse impact on the Corporation. For purposes of the preceding sentence, any such allocation that results in the Corporation having a lower tax basis in its interests in the Company but that does not otherwise cause the Corporation to have taxable income in the applicable Taxable Year in excess of the taxable income it otherwise would have been expected to have in such Taxable Year utilizing a different permissible allocation of “excess nonrecourse liabilities” shall not be considered a material adverse impact, including instances where this result arises from an actual or deemed distribution made to the Corporation in such Taxable Year.

 

 

(d)            If necessary, the Company will make corrective allocations as set forth in Treasury Regulation Section 1.704-1(b)(4)(x).

 

(e)            In the event any Common Units issued pursuant to Section 3.10 are subsequently forfeited, the Company may make forfeiture allocations with respect to such Common Units in the Taxable Year of such forfeiture in accordance with the principles of proposed Treasury Regulations Section 1.704-1(b)(4)(xii)(c), taking into account any amendments to Treasury Regulations Section 1.704-1(b)(4)(xii)(c) and any temporary or final Treasury Regulations issued pursuant to Section 1.704-1(b)(4)(xii)(c).

 

(f)            Allocations pursuant to this Section 5.04 are solely for purposes of federal, state and local income taxes. Accordingly, any such allocations shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Profits, Net Losses, Distributions (other than Tax Distributions) or other items of the Company pursuant to any provision of this Agreement.

 

Section 5.05      Tax Withholding.

 

(a)            If requested by the Manager, each Member shall, if able to do so, deliver to the Manager: (i) an affidavit in form satisfactory to the Company, such as an IRS Form W-9 or applicable IRS Form W-8, that the applicable Member (or its beneficial owners, as the case may be) is not subject to withholding under the provisions of any U.S. federal, state, local, foreign or other applicable Law; (ii) any certificate that the Company may reasonably request with respect to any such Laws; or (iii) any other form or instrument reasonably requested by the Company relating to any Member’s status under such Law. In the event that a Member fails or is unable to deliver to the Company an affidavit described in clause (i) of this Section 5.05(a), the Company may withhold amounts from such Member in accordance with Section 5.05(b).

 

(b)            After receipt of a written request of any Member or former Member, the Company shall provide such information to such Member and take such other action as may be reasonably necessary to assist such Member in making any necessary filings, applications or elections to obtain any available exemption from, or any available refund of, any withholding imposed by any taxing authority with respect to amounts distributable or items of income allocable to such Member under this Agreement to the extent not adverse to the Company or any Member. In addition and at the request of any Member, the Company shall make or cause to be made (or cause the Company to make) any such filings, applications or elections. Any Member making such a request shall cooperate with the Company, with respect to any such filing, application or election to the extent reasonably required by the Company. The requesting Member shall also be responsible for and pay any filing fees, taxes or other out-of-pocket expenses reasonably incurred in connection with any information, filing, application or elections described in this Section 5.05(b) or, if there is more than one requesting Member, by such requesting Members in accordance with their relative Common Unit Percentage Interests.

 

 

(c)            Withholding Advances. To the extent the Corporation or the Company is required by Law to withhold or to make tax payments (including payments for interest, penalties or additions to tax) on behalf of or with respect to any Member (“Withholding Advances”), the Corporation or the Company, as the case may be, may withhold such amounts and make such tax payments as so required. For the avoidance of doubt, Withholding Advances shall include the delivery of consideration in connection with a Redemption or Direct Exchange, backup withholding, Section 1445 of the Code, Section 1446 of the Code or any “imputed underpayment” within the meaning of the Code or, in each case, similar provisions of state, local or other tax Law.

 

(d)            Repayment of Withholding Advances. All Withholding Advances made on behalf of a Member who is an officer or director of the Corporation must be repaid as soon the Company withholds or makes tax payments on behalf of such Member. All Withholding Advances made on behalf of any other Member, plus interest thereon at a rate equal to the Prime Rate as of the date of such Withholding Advances plus       % per annum, shall: (i) be paid on demand by the Member (or former Member) on whose behalf such Withholding Advances were made (it being understood that no such payment shall increase such Member’s Capital Account); or (ii) with the consent of the Manager be repaid by reducing the amount of the current or next succeeding distribution or distributions that would otherwise have been made to such Member or, if such distributions are not sufficient for that purpose, by so reducing the proceeds of liquidation otherwise payable to such Member. Interest on any Withholding Advances shall begin to accrue on the day that is 15 days after the payment of such Withholding Advances by the Company to the extent of the amount of Withholding Advances that have not yet been repaid by such Member at such time. Whenever repayment of a Withholding Advance by a Member is made as described in clause (ii) of this Section 5.05(c), for all other purposes of this Agreement such Member shall be treated as having received all distributions (whether before or upon any Liquidating Event) unreduced by the amount of such Withholding Advance and interest thereon.

 

(e)            Withholding Advances — Reimbursement of Liabilities. Each Member agrees to reimburse the Company for any liability with respect to Withholding Advances (including interest on any Withholding Advances) required or made on behalf of or with respect to such Member (including penalties imposed with respect to any Withholding Advances).

 

 

Article VI.
MANAGEMENT

 

Section 6.01      Authority of the Manager; Officer Delegation.

 

(a)            Except for situations in which the approval of any Member(s) is specifically required by this Agreement and except as otherwise provided in this Agreement: (i) all management powers over the business and affairs of the Company shall be exclusively vested in the Corporation, as the sole managing member of the Company (the Corporation, in such capacity, the “Manager”); (ii) the Manager shall conduct, direct and exercise full control over all activities of the Company; and (iii) the Manager shall have power to bind or take any action on behalf of the Company, or to exercise in its discretion any rights and power granted to the Company under this Agreement, or any other agreement, instrument or other document to which the Company is a party. Without limiting the generality of the foregoing, the Manager’s discretion shall include the right to take certain actions, give or withhold certain consents or approvals, or make certain determinations, opinions, judgment, or other decisions consistent with the grant of authority set forth in this Section 6.01(a). The Manager shall be the “manager” of the Company for the purposes of the Delaware Act. Except as otherwise expressly provided for in this Section 6.01(a) and subject to the other provisions of this Agreement, the Members consent to the exercise by the Manager of all such powers and rights conferred on the Members by the Delaware Act with respect to the management and control of the Company. Any vacancies in the position of the Manager shall be filled in accordance with Section 6.04.

 

(b)            Without limiting the authority of the Manager to act on behalf of the Company, the day-to-day business and operations of the Company shall be overseen and implemented by officers of the Company (each, an “Officer” and collectively, the “Officers”), subject to the limitations imposed by the Manager. An Officer may, but need not, be a Member. Each Officer shall be appointed by the Manager and shall hold office until such Officer’s successor shall be duly designated and shall qualify or until such Officer’s death or until such Officer shall resign or shall have been removed in the manner provided in this Section 6.01. Any one Person may hold more than one office. Subject to the other provisions of this Agreement, the salaries or other compensation, if any, of the Officers of the Company shall be fixed from time to time by the Manager. The authority and responsibility of the Officers shall be limited to such duties as the Manager may, from time to time, delegate to them. Unless the Manager decides otherwise, if the title is one commonly used for officers of a business corporation formed under the General Corporation Law of the State of Delaware, the assignment of such title shall constitute the delegation to such Person of the authorities and duties that are normally associated with that office. All Officers shall be, and shall be deemed to be, officers and employees of the Company. An Officer may also perform one or more roles as an officer of the Manager. Any Officer may be removed at any time, with or without cause, by the Manager.

 

(c)            Subject to the other provisions of this Agreement, the Manager shall have the power and authority to effectuate the sale, lease, transfer, exchange or other disposition of any, all or substantially all of the assets of the Company or the merger, consolidation, conversion, division, reorganization or other combination of the Company with or into another entity, without the prior consent of any Member or any other Person being required. Such sale, lease, transfer, exchange or other disposition of any, all or substantially all of the assets of the Company shall include the exercise or grant of any conversion, option, privilege or subscription right or any other right available in connection with any assets at any time held by the Company.

 

 

Section 6.02      Actions of the Manager. The Manager may act through any Officer or through any other Person or Persons to whom authority and duties have been delegated pursuant to Section 6.01(b).

 

Section 6.03      Resignation; No Removal. The Manager may resign at any time by giving written notice to the Members. Any such resignation shall be subject to the appointment of a new Manager in accordance with Section 6.04. Unless otherwise specified in the notice, the resignation shall take effect upon receipt of such notice by the Members (subject to the appointment of a new Manager in accordance with Section 6.04), and the acceptance of the resignation shall not be necessary to make it effective. The Members have no right under this Agreement to remove or replace the Manager. Notwithstanding anything to the contrary in this Section 6.03, no replacement or termination of the Corporation as the Manager shall be effective unless proper provision is made, in compliance with this Agreement, so that the obligations of the Corporation, its successor or assign (if applicable) and any new Manager and the rights of all Members under this Agreement and applicable Law remain in full force and effect. No appointment of a Person other than the Corporation (or its successor or assign, as applicable) as the Manager shall be effective unless: (a) the new Manager executes a Joinder to this Agreement and agrees to be bound by the terms and conditions in this Agreement; and (b) the Corporation (or its successor or assign, as applicable) and the new Manager (as applicable) provide all other Members with contractual rights, directly enforceable by such other Members against the Corporation (or its successor, as applicable) and the new Manager (as applicable), to cause (i) the Corporation to comply with all of the Corporation’s obligations under this Agreement (in its capacity as a Member) and (ii) the new Manager to comply with all of the Manager’s obligations under this Agreement.

 

Section 6.04      Vacancies. Vacancies in the position of Manager occurring for any reason shall be filled by the Corporation. If the Corporation has ceased to exist without any successor or assign, then any such Manager vacancy shall be filled by the holders of a majority in interest of the voting capital stock of the Corporation immediately prior to such cessation. The Members (other than the Corporation) have no right under this Agreement to fill any vacancy in the position of Manager.

 

Section 6.05      Transactions Between the Company and the Manager. The Manager may cause the Company to contract and deal with the Manager, or any Affiliate of the Manager. With the exception of contracts and dealings between the Company and its Subsidiaries, any contracts between the Manager or any Affiliate of the Manager and the Company shall be: (i) on terms comparable to and competitive with those available to the Company from others dealing at arm’s length; (ii) approved by the Members (other than the Manager) holding a majority of the Percentage Interests of the Members (other than the Manager); or (iii) approved by the Disinterested Majority. Any contracts between the Manager or any Affiliate of the Manager and the Company approved pursuant to clause (i), (ii) or (iii) in the preceding sentence must also be otherwise permitted by the Credit Agreements. The limitations set forth in the foregoing sentence shall in no way, however, limit the Manager’s rights under Section 3.02, Section 3.04, Section 3.05 or Section 3.10. The Members approve each of the contracts or agreements between or among the Manager or its Affiliates (other than the Company and its Subsidiaries), on the one hand, and the Company or its Affiliates (other than the Manager and any of the Company’s Subsidiaries), on the other hand, entered into on or prior to the date of this Agreement in accordance with the Seventh A&R LLC Agreement or that the board of managers of the Company or the Corporate Board has approved in connection with the IPO, including the Recapitalization, as of the date of this Agreement, including the Tax Receivable Agreement.

 

 

Section 6.06      Reimbursement for Expenses. Except as provided in this Section 6.06, the Manager shall not be compensated for its services as the Manager of the Company. The Members acknowledge and agree that the Manager’s Class A Common Stock is publicly traded and, therefore, the Manager has access to the public capital markets and that such status and the services performed by the Manager will inure to the benefit of the Company and all Members. Accordingly, the Manager shall be reimbursed by the Company for any reasonable out-of-pocket expenses incurred on behalf of the Company. Such reasonable out-of-pocket expenses incurred on behalf of the Company shall apply to, among others, all fees, expenses and costs associated with being a public company (including public reporting obligations, proxy statements, stockholder meetings, Trading Market fees (or fees associated with the principal national securities exchange on which the Class A Common Stock is then listed or admitted to trading), transfer agent fees, legal fees, SEC and FINRA filing fees, offering expenses and excise taxes (including any excise taxes imposed pursuant to Section 4501 of the Code) incurred in connection with the redemption of any shares of Equity Securities of the Manager) and maintaining its corporate existence. In the event that shares of Class A Common Stock are sold to underwriters in any subsequent public offering at a price per share that is lower than the price per share for which such shares of Class A Common Stock are sold to the public in such subsequent public offering, after taking into account underwriters’ discounts or commissions and brokers’ fees or commissions (such difference, the “Discount”): (i) the Manager shall be deemed to have contributed to the Company in exchange for newly issued Common Units the full amount for which such shares of Class A Common Stock were sold to the public; and (ii) the Company shall be deemed to have paid the Discount as an expense. To the extent practicable, expenses incurred by the Manager on behalf of or for the benefit of the Company shall be billed directly to and paid by the Company. To the extent any reimbursements to the Manager or any of its Affiliates by the Company pursuant to this Section 6.06 constitute gross income to such Person (as opposed to the repayment of advances made by such Person on behalf of the Company), such amounts shall be treated as “guaranteed payments” within the meaning of Section 707(c) of the Code (unless otherwise required by the Code and Treasury Regulations) and shall not be treated as distributions for purposes of computing the Members’ Capital Accounts. Notwithstanding the foregoing, the Company shall not bear any obligations with respect to income tax of the Manager or any payments made pursuant to the Tax Receivable Agreement other than in a manner that is expressly contemplated under this Agreement.

 

Section 6.07      Limitation of Liability of Manager.

 

(a)            Except as otherwise provided in this Agreement or in an agreement entered into by such Person and the Company, neither the Manager nor any of the Manager’s Affiliates or the Manager’s officers, directors or employees (collectively “Manager’s Representatives”) shall be liable to the Company, to any Member that is not the Manager or to any other Person bound by this Agreement for any act or omission performed or omitted by the Manager in its capacity as the sole managing member of the Company pursuant to authority granted to the Manager by this Agreement. Except as otherwise provided in this Agreement, however, the foregoing limitation of liability shall not apply to the extent the act or omission was attributable to the Manager’s or the Manager’s Representative’s gross negligence, bad faith, fraud intentional misconduct or knowing violation of Law or for any present or future material breaches of any representations, warranties or covenants by the Manager or any Manager’s Representative contained in this Agreement or in the Other Agreements with the Company. The Manager may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it under this Agreement either directly or by or through its agents. and the Manager shall not be responsible for any misconduct or negligence on the part of any such agent (so long as such agent was selected in good faith and with reasonable care). The Manager shall be entitled to rely upon the advice of legal counsel, independent public accountants and other experts, including financial advisors. Any act of or failure to act by the Manager in good faith reliance on the advice of any of the foregoing shall in no event subject the Manager to liability to the Company or any Member that is not the Manager.

 

 

(b)            Notwithstanding any other provision of this Agreement or in any agreement contemplated in this Agreement or applicable provisions of Law or equity or otherwise, to the fullest extent permitted by applicable Law, whenever this Agreement or any other agreement contemplated in this Agreement provides that the Manager shall act in a manner that is, or provide terms that are, “fair and reasonable” to the Company or any Member that is not the Manager, the Manager shall determine such appropriate action or provide such terms considering, in each case, the relative interests of each party to such agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable United States generally accepted accounting practices or principles.

 

(c)            In connection with the performance of its duties as the Manager of the Company, except as otherwise set forth in this Agreement, the Manager acknowledges that, solely in its capacity as the Manager, it will owe fiduciary duties to the Members. Such fiduciary duties shall be the same fiduciary duties as such Manager would owe to the stockholders of a Delaware corporation if it were a member of the board of directors of such a corporation and the Members were stockholders of such corporation. Officers of the Company shall also owe Members and the Company the same fiduciary duties they would owe as if they were officers of a Delaware corporation.

 

Section 6.08      Investment Company Act. The Manager shall use its best efforts to ensure that the Company shall not be subject to registration as an investment company pursuant to the Investment Company Act.

 

Article VII.
RIGHTS AND OBLIGATIONS OF MEMBERS AND THE MANAGER

 

Section 7.01          Limitation of Liability and Duties of Members.

 

(a)            Except as provided in this Agreement or in the Delaware Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company. No Member or Manager shall be obligated personally for any debts, obligations, contracts or liabilities of the Company solely by reason of being a Member or the Manager (except to the extent and under the circumstances set forth in any non-waivable provision of the Delaware Act). Notwithstanding anything contained in this Agreement to the contrary and to the fullest extent permitted by applicable Law, the failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business and affairs under this Agreement or the Delaware Act shall not be grounds for imposing personal liability on the Members for liabilities of the Company.

 

 

(b)            In accordance with the Delaware Act and the Laws of the State of Delaware, a Member may, under certain circumstances, be required to return amounts previously distributed to such Member. It is the intent of the Members that no Distribution to any Member pursuant to Article IV or Article XIV shall be deemed a return of money or other property paid or distributed in violation of the Delaware Act. The payment of any such money or Distribution of any such property to a Member shall be deemed to be a compromise within the meaning of Section 18-502(b) of the Delaware Act. To the fullest extent permitted by Law, any Member receiving any such money or property shall not be required to return any such money or property to the Company or any other Person, unless such distribution was made by the Company to its Members in clerical error. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated to make any such payment, such obligation shall be the obligation of such Member and not of any other Member.

 

(c)            To the fullest extent permitted by applicable Law, including Section 18-1101(c) of the Delaware Act, and notwithstanding any other provision of this Agreement (but subject to Section 6.07 with respect to the Manager) or in any Agreement contemplated in this Agreement or applicable provisions of Law or equity or otherwise, to the extent that any Member (other than the Manager in its capacity as such) (or any Member’s Affiliate or any manager, managing member, general partner, director, officer, employee, agent, fiduciary or trustee of any Member or of any Affiliate of a Member (other than the Company)) has duties (including fiduciary duties) to the Company, the Manager, another Member, any Person who acquires an interest in a Unit or any other Person bound by this Agreement, all such duties (including fiduciary duties) are eliminated, to the fullest extent permitted by law, and replaced with the duties or standards expressly set forth in this Agreement. The limitations set forth in the preceding sentence shall not, however, eliminate the implied contractual covenant of good faith and fair dealing. The elimination of duties (including fiduciary duties) to the Company, the Manager, each of the Members, each other Person who acquires an interest in a Unit and each other Person bound by this Agreement and replacement of such duties with the duties or standards expressly set forth in this Agreement are approved by the Company, the Manager, each of the Members, each other Person who acquires an interest in a Unit and each other Person bound by this Agreement.

 

Section 7.02      Lack of Authority. No Member, other than the Manager or a duly appointed Officer, in each case in its capacity as such, has the authority or power to act for or on behalf of the Company, to do any act that would be binding on the Company or to make any expenditure on behalf of the Company. The Members consent to the exercise by the Manager of the powers conferred on it by Law and this Agreement.

 

Section 7.03      No Right of Partition. No Member, other than the Manager, shall have the right to seek or obtain partition by court decree or operation of Law of any property of the Company, or the right to own or use particular or individual assets of the Company.

 

 

Section 7.04          Indemnification.

 

(a)            The Company agrees to indemnify and hold harmless any Person (each an “Indemnified Person”) to the fullest extent permitted under applicable Law, as the same now exists or may hereafter be amended, substituted or replaced. To the fullest extent permitted by applicable Law, no such amendment, substitution or replacement shall affect the existing rights of any Indemnified Person except to the extent that such amendment, substitution or replacement permits the Company to provide broader indemnification rights than the Company is currently providing immediately prior to such amendment, substitution or replacement. The Indemnification provided under this Section 7.04 shall indemnify and hold harmless each Indemnified Person against all expenses, liabilities and losses (including attorneys’ fees, judgments, fines, excise taxes or penalties) reasonably incurred or suffered by such Person (or one or more of such Person’s Affiliates) by reason of the fact that such Person: (i) is or was a Member or an Affiliate of any Member (other than as a result of an ownership interest in the Corporation); (ii) is or was serving as the Manager or a director, officer or employee of the Manager, the Company Representative, or a director, manager, Officer or employee of the Company; or (iii) is or was serving at the request of the Company as a manager, officer, director, principal, member, employee, advisor, attorney, accountant or other agent or representative of another Person. Notwithstanding the foregoing, no Indemnified Person shall be indemnified for any expenses, liabilities and losses suffered that are attributable to such Indemnified Person’s or its Affiliates’ gross negligence, bad faith, intentional fraud misconduct or knowing violation of Law or for any present or future breaches of any representations, warranties or covenants by such Indemnified Person or its Affiliates contained in this Agreement or in Other Agreements with the Company. Reasonable expenses, including out-of-pocket attorneys’ fees, incurred by any such Indemnified Person in defending a proceeding shall be paid by the Company in advance of the final disposition of such proceeding, including any appeal from such proceeding, upon receipt of an undertaking by or on behalf of such Indemnified Person to repay such amount if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified by the Company.

 

(b)            The right to indemnification and the advancement of expenses conferred in this Section 7.04 shall not be exclusive of any other right which any Person may have or hereafter acquire under any statute, agreement, bylaw, action by the Manager or otherwise.

 

(c)            The Company shall maintain directors’ and officers’ liability insurance, or substantially equivalent insurance, at its expense, to protect any Indemnified Person against any expense, liability or loss described in Section 7.04(a) whether or not the Company would have the power to indemnify such Indemnified Person against such expense, liability or loss under the provisions of this Section 7.04. The Company shall use its commercially reasonable efforts to purchase and maintain property, casualty and liability insurance in types and at levels customary for companies of similar size engaged in similar lines of business, as determined in good faith by the Manager. The Company shall use its commercially reasonable efforts to purchase directors’ and officers’ liability insurance (including employment practices coverage) with a carrier and in an amount determined necessary or desirable, as determined in good faith by the Manager.

 

(d)            The indemnification and advancement of expenses provided for in this Section 7.04 shall be provided out of and to the extent of Company assets only. Unless such Member otherwise agrees in writing or is found in a non-appealable decision by a Governmental Entity of competent jurisdiction to have personal liability on account of such expenses, no Member shall have personal liability or shall be required to make additional Capital Contributions to help satisfy indemnity obligations of the Company. The Company (i) shall be the primary indemnitor of first resort for such Indemnified Person pursuant to this Section 7.04 and (ii) shall be fully responsible for the advancement of all expenses and the payment of all damages or liabilities with respect to such Indemnified Person which are addressed by this Section 7.04.

 

 

(e)            If this Section 7.04 or any portion of this Agreement shall be invalidated on any ground by any Governmental Entity of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnified Person pursuant to this Section 7.04 to the fullest extent permitted by any applicable portion of this Section 7.04 that shall not have been invalidated and to the fullest extent permitted by applicable Law.

 

Article VIII.
BOOKS, RECORDS, ACCOUNTING AND REPORTS, AFFIRMATIVE COVENANTS

 

Section 8.01          Records and Accounting. The Company shall keep, or cause to be kept, appropriate books and records with respect to the Company’s business, including all books and records necessary to provide any information, lists and copies of documents required pursuant to applicable Laws. All matters concerning (a) the determination of the relative amount of allocations and Distributions among the Members pursuant to Article IV and Article V and (b) accounting procedures and determinations, and other determinations not specifically and expressly provided for by the terms of this Agreement, shall be determined by the Manager. Any such determination by the Manager shall be final and conclusive as to all of the Members absent manifest clerical error or common law fraud.

 

Section 8.02          Fiscal Year. The Fiscal Year of the Company shall end on December 31 of each year or such other date as may be established by the Manager.

 

Section 8.03          Inspection Rights. The Company shall permit each Member and each of its designated representatives to examine the books and records of the Company or any of its Subsidiaries. Such examination shall occur at the principal office of the Company or such other location as the Manager shall reasonably approve during normal business hours and upon reasonable notice for any purpose reasonably related to such Member’s Units. Any such inspection by a Member shall be a the Member’s sole cost and expense, The inspection rights provided in this Section 8.03 shall not interfere, however, with the Manager’s right to keep confidential from the Members certain information in accordance with Section 18-305 of the Delaware Act.

 

Article IX.
TAX MATTERS

 

Section 9.01          Preparation of Tax Returns. The Manager shall arrange for the preparation and timely filing of all tax returns required to be filed by the Company. The Manager shall use reasonable efforts (taking into account applicable extensions of time to file tax returns) to furnish, within 215 days of the close of each Taxable Year, or as soon as reasonably possible, to each Member a completed IRS Schedule K-1 (and any comparable state and local income tax form) and such other information as is reasonably requested by such Member relating to the Company that is necessary for such Member to comply with its tax reporting obligations. Subject to the terms and conditions of this Agreement, in its capacity as Company Representative, the Manager shall have the authority to prepare the tax returns of the Company using such permissible methods and elections as it determines in its reasonable discretion, including the use of any permissible method under Section 706 of the Code for purposes of determining the varying Units of its Members.

 

 

Section 9.02          Tax Elections. The Taxable Year shall be the Fiscal Year set forth in Section 8.02, unless otherwise required by Section 706 of the Code. The Manager shall cause the Company and each of its Subsidiaries that is treated as a partnership for U.S. federal income tax purposes to have in effect an election pursuant to Section 754 of the Code (or any similar provisions of applicable state, local or foreign tax Law) for the Taxable Year that includes the Effective Date and each subsequent Taxable Year in which an Exchange (as defined in the Tax Receivable Agreement) occurs. The preceding sentence shall not apply, however, to any Company Subsidiary to the extent it is directly or indirectly held by or through any Company Subsidiary that is treated as a corporation for U.S. federal, and applicable state and local, income tax purposes. The Manager shall take commercially reasonable efforts to cause each Person in which the Company owns a direct or indirect equity interest that is so treated as a partnership to have in effect such an election for the Taxable Year that includes the Effective Date and each subsequent Taxable Year in which an Exchange (as defined in the Tax Receivable Agreement) occurs. The foregoing shall not apply to any such Person that is directly or indirectly held by or through an entity treated as a corporation for U.S. federal, and applicable state and local, income tax purposes. Each Member will upon request supply any information reasonably necessary to give proper effect to any such elections.

 

Section 9.03          Company Representative.

 

(a)            The Manager is specially authorized and appointed to act as the Company Representative and in any similar capacity under state or local Law. The Manager may also appoint and replace the Company Representative. The Company Representative shall designate a “designated individual” in accordance with Treasury Regulations Section 301.6223-1(b)(3)(i). The Company and the Members (including any Member designated as the Company Representative prior to the date of this Agreement) shall reasonably cooperate with each other and shall use reasonable best efforts to cause the Manager (or any Person subsequently designated) to become the Company Representative with respect to any taxable period of the Company with respect to which the statute of limitations has not yet expired. To implement the foregoing, the Company and the Members shall cause any tax matters partner, partnership representative or designated individual designated prior to the Effective Date to resign, be revoked or replaced, as applicable, including (as applicable) by filing certifications pursuant to Treasury Regulations Section 301.6231(a)(7)-1(d).

 

(b)            At the Company’s expense, the Company Representative may retain such outside counsel, accountants and other professional consultants as the Company Representative reasonably deems necessary in the course of fulfilling its obligations. Subject to the other terms of this Agreement, the Company Representative is authorized to take such actions and execute and file all statements and forms on behalf of the Company that are approved by the Manager and are permitted or required by the applicable provisions of the Partnership Tax Audit Rules. The Company Representative will have sole discretion to determine whether the Company (either in its own behalf or on behalf of the Members) will contest or continue to contest any tax deficiencies assessed or proposed to be assessed by any taxing authority. Each Member agrees to reasonably cooperate with the Company Representative and to do or refrain from doing any or all things reasonably requested by the Company Representative (including paying all resulting taxes, additions to tax, penalties and interest in a timely fashion) in connection with any examination of the Company’s affairs by any taxing authorities, including resulting administrative and judicial proceedings. Any deficiency for taxes imposed on any Member (including penalties, additions to tax or interest imposed with respect to such taxes) will be paid by such Member. If such deficiency is required to be paid (and actually paid) by the Company, such deficiency will be recoverable from such Member as provided in Section 5.05. The Company Representative shall be entitled to cause the Company to elect the application of Section 6226 of the Code with respect to any imputed underpayment or make any other decision or election, or take any action pursuant to Sections 6221 through 6235 and 6241 of the Code. The Company Representative shall keep the Members reasonably informed of any material audit or administrative or judicial proceedings and any decisions or elections described in the previous sentence that are material in nature. The Company shall reimburse the Company Representative for all reasonable, documented out-of-pocket expenses incurred by the Company Representative, including reasonable fees of any professional attorneys, in carrying out its duties as the Company Representative. In the event that the Manager determines that the foregoing provisions are no longer applicable to the Company, either due to a change of controlling law or the enactment of applicable Treasury Regulations, the Manager is authorized to take any reasonable actions as may be required concerning tax matters of the Company not otherwise addressed in this Section 9.03. The provisions of this Section 9.03 shall survive the termination of any Member’s interest in the Company, the termination of this Agreement and the termination of the Company. The provisions of this Section 9.03 shall remain binding on each Member for the period of time necessary to resolve with any applicable taxing authority any tax matters relating to the Company.

 

 

Article X.
RESTRICTIONS ON TRANSFER OF UNITS; CERTAIN TRANSACTIONS

 

Section 10.01          Transfers by Members. No holder of Units shall Transfer any interest in any Units, except Transfers: (a) pursuant to and in accordance with Section 10.02 and Section 10.09; (b) approved in advance and in writing by the Manager, in the case of Transfers by any Member other than the Manager; or (c) in the case of Transfers by the Manager, to any Person who succeeds to the Manager in accordance with Section 6.04. Notwithstanding the foregoing, “Transfer” shall not include any indirect Transfer of Units held by the Manager by virtue of any Transfer of Equity Securities in the Corporation. Notwithstanding any other provision of this Agreement to the contrary, no Member shall Transfer all or any part of its Units or any right or economic interest pertaining to such Units if such Transfer, nor shall the Company issue any Units if such issuance, in the reasonable discretion of the Manager, (x) would cause the Company to (1) be classified as a “publicly traded partnership” as that term is defined in Section 7704 of the Code and Treasury Regulations promulgated thereunder or (2) fail to qualify for the safe harbor contained in Treasury Regulations Section 1.7704-1(h) or (y) would result in the Company having more than 100 partners, within the meaning of Treasury Regulations Section 1.7704-1(h)(1) (determined pursuant to the rules of Treasury Regulations Section 1.7704-1(h)(3)) in any Fiscal Year that is not a Restricted Fiscal Year.

 

Section 10.02          Permitted Transfers. The restrictions contained in Section 10.01 shall not apply to any of the following (each, a “Permitted Transfer” and each transferee, a “Permitted Transferee”): (i) a Transfer pursuant to a Redemption or Direct Exchange in accordance with Article XI; (ii) a Transfer by a Member to the Corporation or any of its Subsidiaries; (iii) a Permitted Pledge; or (iv) to an Affiliate of such Member. In addition, the Manager shall not unreasonably withhold, condition or delay its consent to any other Transfer by a Member so long as such Transfer would not, in the reasonable discretion of the Manager, have the consequence described in clauses (x) or (y) of the last sentence of Section 10.01. The restrictions contained in this Agreement will continue to apply to Units after any Permitted Transfer of such Units. In addition, in the case of any transfers pursuant to clause (iii) of this Section 10.02: (i), the Permitted Transferees of the Units so Transferred shall at the time of the Permitted Transfer agree in writing to be bound by the provisions of this Agreement; and (ii) prior to such Transfer the transferor will deliver a written notice to the Company and the Members, which notice will disclose in reasonable detail the identity of the proposed Permitted Transferee. If a Permitted Transfer pursuant to clause (iii) of this Section 10.02 would result in a Change of Control, such Member must provide the Manager with written notice of any such proposed Permitted Transfer at least 60 calendar days prior to the consummation of such Permitted Transfer. In the case of a Permitted Transfer of any Common Units by any Member holding Class B Common Stock to a Permitted Transferee in accordance with this Section 10.02, such Member shall also transfer a number of shares of Class B Common Stock equal to the number of Common Units that were transferred by such Member in the transaction to such Permitted Transferee. All Permitted Transfers are subject to the additional limitations set forth in Section 10.07(b).

 

Section 10.03          Restricted Units Legend. The Units have not been registered under the Securities Act. Consequently, in addition to the other restrictions on Transfer contained in this Agreement, such Units cannot be sold unless subsequently registered under the Securities Act or if an exemption from such registration is then available with respect to such sale. The book-entry statements representing the Units shall bear, and to the extent Units have been certificated in accordance with Section 3.06, each certificate evidencing Units and each certificate issued in exchange for or upon the Transfer of any Units shall be stamped or otherwise imprinted with, a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION UNDER THE ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE EIGHTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF X-ENERGY REACTOR COMPANY, LLC, AS IT MAY BE AMENDED, RESTATED, AMENDED AND RESTATED, OR OTHERWISE MODIFIED FROM TIME TO TIME, AND X-ENERGY REACTOR COMPANY, LLC RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO ANY TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY X-ENERGY REACTOR COMPANY, LLC TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.”

 

 

The legend set forth above shall be removed from the book-entry statements or certificates (if any) evidencing any Units that cease to be Units in accordance with the definition of Units.

 

Section 10.04          Transfer. Prior to Transferring any Units, the Transferring holder of Units shall cause the prospective Permitted Transferee to be bound by this Agreement and any other agreements executed by the holders of Units and relating to such Units in the aggregate to which the Transferring holder was a party (collectively, the “Other Agreements”). Any prospective Permitted Transferee shall execute and deliver to the Company counterparts of this Agreement and any applicable Other Agreements.

 

Section 10.05          Assignee’s Rights.

 

(a)            The Transfer of a Unit in accordance with this Agreement shall be effective as of the date of such Transfer (assuming compliance with all of the conditions to such Transfer set forth in this Article X), and such Transfer shall be shown on the books and records of the Company. Net Profits, Net Losses and other items of the Company shall be allocated between the transferor and the transferee according to Code Section 706, using any permissible method as determined in the reasonable discretion of the Manager. Distributions made before the effective date of such Transfer shall be paid to the transferor, and Distributions made on or after such date shall be paid to the Assignee.

 

(b)            Unless and until an Assignee becomes a Member pursuant to Article XII, the Assignee shall not be entitled to any of the rights granted to a Member under this Agreement or under applicable Law, other than the rights granted specifically to Assignees pursuant to this Agreement. Without relieving the Transferring holder from any such limitations or obligations as more fully described in Section 10.06, such Assignee shall be bound by any limitations and obligations of a Member contained in this Agreement by which a Member would be bound on account of the Assignee’s Units (including the obligation to make Capital Contributions on account of such Units).

 

Section 10.06          Assignor’s Rights and Obligations. Any Member who shall Transfer any Unit in a manner in accordance with this Agreement shall cease to be a Member with respect to such Units and shall no longer have any rights or privileges, or, except as set forth in this Section 10.06, duties, liabilities or obligations, of a Member with respect to such Units or other interest. The Members acknowledge and agree, however, that the applicable provisions of Section 6.07 and Section 7.04 shall continue to inure to such Person’s benefit. Unless and until the Assignee (if not already a Member) is admitted as a Substituted Member in accordance with the provisions of Article XII (the “Admission Date”): (a) such Transferring holder shall retain all of the duties, liabilities and obligations of a Member with respect to such Units; and (b) in its sole discretion, the Manager may reinstate all or any portion of the rights and privileges of such Member with respect to such Units for any period of time prior to the Admission Date. Nothing contained in this Agreement shall relieve any Member who Transfers any Units in the Company: (i) from any liability to the Company with respect to such Units that may exist as of the Admission Date or that is otherwise specified in the Delaware Act; (ii) for any liability to the Company or any other Person for any materially false statement made by such Member (in its capacity as such); or (iii) for any present or future breaches of any representations, warranties or covenants by such Member (in its capacity as such) contained in this Agreement or in the Other Agreements with the Company.

 

 

 

Section 10.07      Overriding Provisions.

 

(a)            To the fullest extent permitted by applicable Law, any Transfer or attempted Transfer of any Units in violation of this Agreement (including any prohibited indirect Transfers) shall be null and void ab initio, and the provisions of Section 10.05 and Section 10.06 shall not apply to any such Transfers. Any Person to whom a Transfer is made or attempted in violation of this Agreement shall not become a Member and shall not have any other rights in or with respect to any rights of a Member of the Company with respect to the applicable Units. The approval of any Transfer in any one or more instances shall not limit or waive the requirement for such approval in any other or future instance. The Manager shall promptly amend the Schedule of Members to reflect any Permitted Transfer pursuant to this Article X.

 

(b)            Notwithstanding anything contained in this Agreement to the contrary (including the provisions of Section 10.01, Article XI and Article XII), in no event shall any Member Transfer any Units to the extent such Transfer would:

 

(i)            result in the violation of the Securities Act, or any other applicable federal, state or foreign Laws;

 

(ii)           cause the Company to be required to register under the Investment Company Act;

 

(iii)          in the reasonable determination of the Manager, be or result in a violation of or a default (or an event that, with notice or the lapse of time or both, would constitute a default) under, or result in an acceleration of any obligation under any Credit Agreement to which the Company or the Manager is a party. Notwithstanding the foregoing, the payee or creditor to whom the Company or the Manager owes such obligation is not an Affiliate of the Company or the Manager;

 

(iv)          be a Transfer to a Person who is not legally competent or who has not achieved such Person’s majority of age under applicable Law (excluding trusts for the benefit of minors);

 

(v)           be a Transfer to a Competitor;

 

(vi)          cause the Company to be treated as a “publicly traded partnership” or to be taxed as a corporation pursuant to Section 7704 of the Code or any successor provision to Section 7704 of the Code; or

 

(vii)         result in the Company having more than one hundred (100) partners, within the meaning of Treasury Regulations Section 1.7704-1(h)(1) (determined pursuant to the rules of Treasury Regulations Section 1.7704-1(h)(3)).

 

 

(c)            Notwithstanding anything contained in this Agreement to the contrary, in no event shall any Member that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code Transfer any Units (including in connection with a Redemption or a Direct Exchange) unless and until such Member and the transferee have delivered to the Company, in respect of the relevant Transfer (or Redemption or Direct Exchange, as applicable), written evidence that all required withholding under Section 1446(f) of the Code will have been done and duly remitted to the applicable Governmental Entity or duly executed certifications (prepared in accordance with the applicable Treasury Regulations or other authorities) of an exemption from such withholding and no more than ten Business Days following such Transfer, the transferee Member shall provide the Company with a certification of withholding that meets the requirements of Treasury Regulations Section 1.1446(f)-2(d)(2). The Company shall cooperate in the manner set forth in Section 10.07(a) with any reasonable requests from such Member for certifications or other information from the Company in connection with satisfying this Section 10.07(c) prior to the relevant Transfer (or Redemption or Direct Exchange, as applicable).

 

Section 10.08      Spousal Consent. In connection with the execution and delivery of this Agreement, any Member will deliver to the Company an executed consent from such Member’s spouse (if any) in the form of Exhibit B-1 attached to this Agreement or a Member’s spouse confirmation of separate property in the form of Exhibit B-2 attached to this Agreement. If, at any time subsequent to the date of this Agreement such Member becomes legally married (whether in the first instance or to a different spouse), such Member shall cause such Member’s spouse to execute and deliver to the Company a consent in the form of Exhibit B-1 or Exhibit B-2 attached to this Agreement. Such Member’s non-delivery to the Company of an executed consent in the form of Exhibit B-1 or Exhibit B-2 at any time shall constitute such Member’s continuing representation and warranty that such Member is not legally married as of such date.

 

Section 10.09      Certain Transactions with respect to the Corporation.

 

(a)            In connection with a Change of Control Transaction, in its sole discretion, the Manager shall have the right to require each Member (other than the Corporation and its Subsidiaries) to effect a Redemption of all or a portion of such Member’s Common Units together with an equal number of shares of Class B Common Stock. Pursuant to a Redemption, such Common Units and such shares of Class B Common Stock will be exchanged for shares of Class A Common Stock (or economically equivalent cash or securities of a successor entity) in accordance with the Redemption provisions of Article XI, mutatis mutandis (applied for this purpose as if the Corporation had delivered an Election Notice that specified a Share Settlement with respect to such Redemption) and otherwise in accordance with this Section 10.09(a). Any such Redemption pursuant to this Section 10.09(a) shall be effective immediately prior to the consummation of such Change of Control Transaction. For the avoidance of doubt, any such Redemption shall be contingent upon the consummation of such Change of Control Transaction and shall not be effective if such Change of Control Transaction is not consummated (the date of such Redemption pursuant to this Section 10.09(a), the “Change of Control Date”). In the event the Manager requires a Redemption under this Section 10.09, then (i) the Common Units and any shares of Class B Common Stock, subject to such Redemption shall be deemed to be transferred to the Corporation on the Change of Control Date; and (ii) each such Member shall cease to have any rights with respect to the Units and any shares of Class B Common Stock, subject to such Redemption (other than the right to receive shares of Class A Common Stock (or economically equivalent cash or Equity Securities in a successor entity) pursuant to such Redemption). In the event the Manager desires to initiate the provisions of this Section 10.09, the Manager shall provide written notice of an expected Change of Control Transaction to all Members within the earlier of (x) five Business Days following the execution of a definitive agreement with respect to such Change of Control Transaction and (y) ten Business Days before the proposed date upon which the contemplated Change of Control Transaction is to be effected. Any such notice shall include shall reasonably describe: (i) the Change of Control Transaction, including the date of execution of any definitive agreement or the proposed effective date for the Change of Control; (ii) the amount and types of consideration to be paid for shares of Class A Common Stock in the Change of Control Transaction; and (iii) any election with respect to types of consideration that a holder of shares of Class A Common Stock shall be entitled to make in connection with a Change of Control Transaction. The election referred to in the preceding sentence shall be available to each Member on the same terms as holders of shares of Class A Common Stock. Following delivery of such notice and on or prior to the Change of Control Date, the Members shall take all actions reasonably requested by the Corporation to effect such Redemption. Such actions shall include taking any action and delivering any document required pursuant to this Section 10.09(a) to effect such Redemption.

 

 

(b)            If a Corporation Offer is proposed by the Corporation or is proposed to the Corporation or its stockholders and approved by the Corporate Board or is otherwise effected or to be effected with the consent or approval of the Corporate Board, the Manager shall provide written notice of the Corporation Offer to all Members within the earlier of (i) five Business Days following the execution of a definitive agreement with respect to, or the commencement of, such Corporation Offer and (ii) ten Business Days before the proposed date upon which the Corporation Offer is to be effected. Any such written notice shall reasonably describe: (i) the Corporation Offer, including the date of execution of any definitive agreement or of such commencement; (ii) the material terms of such Corporation Offer, including the amount and types of consideration to be received by holders of shares of Class A Common Stock in the Corporation Offer; (iii) any election with respect to types of consideration that a holder of shares of Class A Common Stock shall be entitled to make in connection with such Corporation Offer; and (iv) the number of Common Units (and the corresponding shares of Class B Common Stock) held by such Member that is applicable to such Corporation Offer. The Members (other than the Corporation and its Subsidiaries) shall be permitted to participate in such Corporation Offer by delivering a written notice of participation that is effective immediately prior to the consummation of such Corporation Offer (and that is contingent upon consummation of such offer). Any such written notice shall include such information necessary for consummation of such offer as requested by the Corporation. In the case of any Corporation Offer that was initially proposed by the Corporation, the Corporation shall use reasonable best efforts to enable and permit the Members (other than the Corporation and its Subsidiaries) to participate in such transaction to the same extent or on an economically equivalent basis as the holders of shares of Class A Common Stock, and to enable such Members to participate in such transaction without being required to exchange Common Units or shares of Class B Common Stock prior to the consummation of such transaction. In no event shall the Members be entitled to receive in such Corporation Offer aggregate consideration for each Common Unit that is greater than the consideration payable in respect of each share of Class A Common Stock in connection with a Corporation Offer. Payments under or in respect of the Tax Receivable Agreement shall not be considered part of any such consideration.

 

(c)            If a transaction or proposed transaction constitutes both a Change of Control Transaction and a Corporation Offer, the provisions of Section 10.09(a) shall take precedence over the provisions of Section 10.09(b) with respect to such transaction. The provisions of Section 10.09(b) shall be subordinate to provisions of Section 10.09(a), and may only be triggered if the Manager elects to waive the provisions of Section 10.09(a).

 

 

Article XI.
REDEMPTION AND DIRECT EXCHANGE RIGHTS

 

Section 11.01      Redemption Right of a Member.

 

(a)            Each Member holding Common Units (other than the Corporation), subject to compliance with any contractual lock-up period relating to the shares of the Corporation that may be applicable to such Member shall be entitled to cause the Company to redeem (a “Redemption”) its Common Units (excluding any Common Units that are subject to vesting conditions) in whole or in part (the “Redemption Right”). Any such Redemption must be for at least the Minimum Redemption Number and, in the case of a Restricted Fiscal Year, such Member may only exercise its Redemption Right on the Quarterly Redemption Date; provided, however, that for all purposes of this Article XI, any Block Transfer shall be treated as a Redemption occurring in a year that is not a Restricted Fiscal Year. A Member desiring to exercise its Redemption Right (each, a “Redeeming Member”) shall exercise such right by giving written notice (the “Redemption Notice”) to the Company with a copy to the Corporation. The Redemption Notice shall specify the number of Common Units (the “Redeemed Units”) that the Redeeming Member intends to have the Company redeem. The Redemption Notice shall also specify a date, (i) not less than five Business Days nor more than ten Business Days after delivery of such Redemption Notice for a Redemption that occurs in a taxable year that is not a Restricted Fiscal Year or (ii) for a Quarterly Redemption Date for any Redemption that occurs in a Restricted Fiscal Year, unless and to the extent that the Manager in its sole discretion agrees in writing to waive any time periods, not less than 60 days after delivery of the applicable Redemption Notice on which exercise of the Redemption Right shall be completed (the “Redemption Date”). The Company, the Corporation and the Redeeming Member may change the number of Redeemed Units and/or the Redemption Date specified in such Redemption Notice to another number and/or date by mutual agreement signed in writing by each of them. If the Corporation elects a Share Settlement, the Redemption may be conditioned (including as to timing) by the Redeeming Member on the closing of an underwritten distribution of the shares of Class A Common Stock that may be issued in connection with such proposed Redemption. Subject to Section 11.03 and unless the Redeeming Member timely has delivered a Retraction Notice as provided in Section 11.01(c) or has revoked or delayed a Redemption as provided in Section 11.01(d), on the Redemption Date (to be effective immediately prior to the close of business on the Redemption Date), then:

 

 

(i)            the Redeeming Member shall Transfer and surrender, free and clear of all liens and encumbrances (x) the Redeemed Units to the Company (including any certificates representing the Redeemed Units if they are certificated) and (y) a number of shares of Class B Common Stock, as applicable (together with any Corresponding Rights), equal to the number of Redeemed Units to the Corporation, to the extent applicable;

 

(ii)           the Company shall (x) cancel the Redeemed Units, (y) transfer to the Redeeming Member the consideration to which the Redeeming Member is entitled under Section 11.01(b), and (z) if the Common Units are certificated in accordance with Section 3.06, issue to the Redeeming Member a certificate for a number of Common Units equal to the difference (if any) between the number of Common Units evidenced by the certificate surrendered by the Redeeming Member pursuant to clause (ii) of this Section 11.01(a) and the Redeemed Units; and

 

(b)            the Corporation shall cancel and retire for no consideration the shares of Class B Common Stock, as applicable (together with any Corresponding Rights), that were Transferred to the Corporation pursuant to Section 11.01(a)(i)(y). Based on a determination solely by the Disinterested Majority, the Corporation shall have the option as provided in Section 11.02 to elect to have the Redeemed Units be redeemed in consideration for either a Share Settlement or a Cash Settlement. Notwithstanding the foregoing, the Corporation may elect to have the Redeemed Units be redeemed in consideration for a Cash Settlement only to the extent that the Corporation has cash available in an amount equal to at least the Redeemed Units Equivalent, which cash was received from a Qualified Offering. The Corporation shall give written notice (the “Election Notice”) to the Company (with a copy to the Redeeming Member) of such election within three Business Days of receiving the Redemption Notice. If the Corporation does not timely deliver an Election Notice, the Corporation shall be deemed to have elected the Share Settlement method (subject to the limitations set forth above).

 

(c)            If the Corporation elects the Cash Settlement in connection with a Redemption, the Redeeming Member may retract its Redemption Notice by giving written notice (the “Retraction Notice”) to the Company (with a copy to the Corporation) within three Business Days of delivery of the Election Notice. The timely delivery of a Retraction Notice shall terminate all of the Redeeming Member’s, the Company’s and the Corporation’s rights and obligations under this Section 11.01 arising from the related Redemption Notice.

 

(d)            If the Corporation elects a Share Settlement in connection with a Redemption, a Redeeming Member shall be entitled to revoke its Redemption Notice or delay the consummation of a Redemption if any of the following conditions exists:

 

(i)            any registration statement pursuant to which the resale of the Class A Common Stock to be registered for such Redeeming Member at or immediately following the consummation of the Redemption shall have ceased to be effective pursuant to any action or inaction by the SEC or no such resale registration statement has yet become effective;

 

 

(ii)            the Corporation shall have failed to cause any related prospectus to be supplemented by any required prospectus supplement necessary to effect such Redemption;

 

(iii)            the Corporation shall have exercised its right to defer, delay or suspend the filing or effectiveness of a registration statement and such deferral, delay or suspension shall affect the ability of such Redeeming Member to have its Class A Common Stock registered at or immediately following the consummation of the Redemption;

 

(iv)            the Redeeming Member is in possession of any material non-public information concerning the Corporation, the receipt of which results in such Redeeming Member being prohibited or restricted from selling Class A Common Stock at or immediately following the Redemption without disclosure of such information (and the Corporation does not permit disclosure of such information);

 

(v)             any stop order relating to the registration statement pursuant to which the Class A Common Stock was to be registered by such Redeeming Member at or immediately following the Redemption shall have been issued by the SEC;

 

(vi)            there shall have occurred a material disruption in the securities markets generally or in the market or markets in which the Class A Common Stock is then traded;

 

(vii)           there shall be in effect an injunction, a restraining order or a decree of any nature of any Governmental Entity that restrains or prohibits the Redemption;

 

(viii)          the Corporation shall have failed to comply in all material respects with its obligations under the Registration Rights Agreement, and such failure shall have affected the ability of such Redeeming Member to consummate the resale of Class A Common Stock to be received upon such Redemption pursuant to an effective registration statement; or

 

(ix)            the Redemption Date would occur three Business Days or less prior to, or during, a Black-Out Period.

 

If a Redeeming Member delays the consummation of a Redemption pursuant to this Section 11.01(d), the Redemption Date shall occur on the fifth Business Day following the date on which the condition(s) giving rise to such delay cease to exist or such earlier day as the Corporation, the Company and such Redeeming Member may agree in writing.

 

(e)            The number of shares of Class A Common Stock or Redeemed Units Equivalent, if applicable, (together with any Corresponding Rights) applicable to any Share Settlement or Cash Settlement shall not be adjusted on account of any Distributions previously made with respect to the Redeemed Units or dividends previously paid with respect to Class A Common Stock. If a Redeeming Member causes the Company to redeem Redeemed Units and the Redemption Date occurs subsequent to the record date for any Distribution with respect to the Redeemed Units, but prior to payment of such Distribution, the Redeeming Member shall be entitled to receive such Distribution with respect to the Redeemed Units on the date that it is made notwithstanding that the Redeeming Member Transferred and surrendered the Redeemed Units to the Company prior to such date. A Redeeming Member shall be entitled, however, to receive all Tax Distributions that such Redeeming Member otherwise would have received in respect of income allocated to such Member for the portion of any Fiscal Year irrespective of whether such Tax Distribution(s) are declared or made after the Redemption Date.

 

 

(f)            In the case of a Share Settlement, if a reclassification or other similar transaction occurs following delivery of a Redemption Notice, but prior to the Redemption Date, as a result of which shares of Class A Common Stock are converted into another security, then a Redeeming Member shall be entitled to receive the amount of such other security (and, if applicable, any Corresponding Rights) that the Redeeming Member would have received if such Redemption Right had been exercised and the Redemption Date had occurred immediately prior to the record date of such reclassification or other similar transaction.

 

(g)           Notwithstanding anything to the contrary contained in this Agreement, neither the Company nor the Corporation shall be obligated to effectuate a Redemption if such Redemption could (as determined in the sole discretion of the Manager) cause the Company to be treated as a “publicly traded partnership” or to be taxed as a corporation pursuant to Section 7704 of the Code or successor provisions of the Code.

 

(h)           Notwithstanding anything to the contrary contained in this Agreement, neither the Company nor the Corporation shall be obligated to effectuate a Redemption during a Restricted Fiscal Year if the Company reasonably expects that following such Redemption, more than ten percent of the outstanding Common Units (determined without reference to the Corporation’s Common Units) will be considered transferred during such Restricted Fiscal Year for purposes of Treasury Regulation Section 1.7704-1(f)(3).

 

(i)            If (i) the Members (other than the Corporation) beneficially own, in the aggregate, less than 5.0% of the then outstanding Units and (ii) the Class A Common Stock is then listed on the Stock Exchange or is listed or admitted to trading on another principal national securities exchange, then in its sole discretion, the Corporation shall have the right to require all Members (other than the Corporation) to effect a Redemption of all, but not less than all, of the Units held by such Members. Such Redemption shall be together with the surrender and delivery of the same number of shares of Class B Common Stock to the Corporation. Notwithstanding the foregoing, a Cash Settlement shall not be permitted pursuant to such a Redemption under this Section 11.01(i). The Corporation shall deliver written notice to the Company and all of the other Members of its intention to exercise its Redemption Right pursuant to this Section 11.01(i) (a “Minority Member Redemption Notice”) at least five Business Days prior to the proposed date upon which such Redemption is to be effected (such proposed date, the “Minority Member Redemption Date”). A Minority Member Redemption Notice shall indicate the number of Common Units (and corresponding number of shares of Class B Common Stock) held by such Member that the Corporation intends to require to be subject to such Redemption. Any Redemption pursuant to this Section 11.01(i) shall be effective on the Minority Member Redemption Date. Following delivery of a Minority Member Redemption Notice and on or prior to the Minority Member Redemption Date, the Members shall take all actions reasonably requested by the Corporation to effect such Redemption. Such actions shall include taking any action and delivering any document required pursuant to this Section 11.01(i) to effect a Redemption. Notwithstanding the foregoing, the Corporation will only have the right to deliver a Minority Member Redemption Notice if: (x) there is an active shelf registration statement in effect with respect to all of such Member’s Common Units subject to Redemption pursuant to a given Minority Member Redemption Notice; and (y) the Class A Common Stock issuable to such Member shall not be subject to any lockup or other restrictions on transfer.

 

 

Section 11.02      Election and Contribution of the Corporation. Unless the Redeeming Member has timely delivered a Retraction Notice as provided in Section 11.01(c), or has revoked or delayed a Redemption as provided in Section 11.01(d), subject to Section 11.03, on the Redemption Date: (i) the Corporation shall make a Capital Contribution to the Company (in the form of the Share Settlement or the Cash Settlement, as determined by the Corporation in accordance with Section 11.01(b)); and (ii) the Company shall issue to the Corporation a number of Common Units equal to the number of Redeemed Units surrendered by the Redeeming Member. Such Redemption shall be effective immediately prior to the close of business on the Redemption Date. Notwithstanding any other provisions of this Agreement to the contrary, but subject to Section 11.03, if the Corporation elects a Cash Settlement, the Corporation shall only be obligated to contribute to the Company an amount in respect of such Cash Settlement equal to the Redeemed Units Equivalent with respect to such Cash Settlement. In no event shall such amount exceed the amount actually paid by the Company to the Redeeming Member as the Cash Settlement. The timely delivery of a Retraction Notice shall terminate all of the Company’s and the Corporation’s rights and obligations under this Section 11.02 arising from the Redemption Notice.

 

Section 11.03      Direct Exchange Right of the Corporation.

 

(a)            Notwithstanding anything to the contrary in this Article XI (except for the limitations set forth in Section 11.01(b) regarding the Corporation’s option to select the Share Settlement or the Cash Settlement, and without limitation to the rights of the Members under Section 11.01, including the right to revoke a Redemption Notice), the Corporation may, in its sole and absolute discretion (as determined solely by the Disinterested Majority) (subject to the limitations set forth on such discretion in Section 11.01(b)), elect to effect on the Redemption Date the exchange of Redeemed Units for the Share Settlement or the Cash Settlement, as the case may be, through a direct exchange of such Redeemed Units and the Share Settlement or the Cash Settlement, as applicable, between the Redeeming Member and the Corporation (a “Direct Exchange”). A Direct Exchange shall occur in place of contributing the Share Settlement or the Cash Settlement, as the case may be, to the Company in accordance with Section 11.02 for purposes of the Company redeeming the Redeemed Units from the Redeeming Member in consideration of the Share Settlement or the Cash Settlement, as applicable. Upon such Direct Exchange pursuant to this Section 11.03, the Corporation shall acquire the Redeemed Units and shall be treated for all purposes of this Agreement as the owner of such Units.

 

(b)            The Corporation may, at any time prior to a Redemption Date (including after delivery of an Election Notice pursuant to Section 11.01(b)), deliver written notice (an “Exchange Election Notice”) to the Company and the Redeeming Member setting forth its election to exercise its right to consummate a Direct Exchange. Notwithstanding the foregoing, such election shall be subject to the limitations set forth in Section 11.01(b) and shall not unreasonably prejudice the ability of the parties to consummate a Redemption or Direct Exchange on the Redemption Date. An Exchange Election Notice may be revoked by the Corporation at any time. Notwithstanding the foregoing, any such revocation shall not unreasonably prejudice the ability of the parties to consummate a Redemption or Direct Exchange on the Redemption Date. The right to consummate a Direct Exchange in all events shall be exercisable for all of the Redeemed Units that would have otherwise been subject to a Redemption.

 

 

(c)            Except as otherwise provided by this Section 11.03, a Direct Exchange shall be consummated pursuant to the same timeframe as the relevant Redemption would have been consummated if the Corporation had not delivered an Exchange Election Notice and as follows:

 

(i)           the Redeeming Member shall transfer and surrender, free and clear of all liens and encumbrances (x) the Redeemed Units and (y) a number of shares of Class B Common Stock (together with any Corresponding Rights), equal to the number of Redeemed Units, to the extent applicable, in each case, to the Corporation;

 

(ii)          the Corporation shall (x) pay to the Redeeming Member the Share Settlement or the Cash Settlement, as applicable, and (y) cancel and retire for no consideration the shares of Class B Common Stock (together with any Corresponding Rights), that were Transferred to the Corporation pursuant to Section 11.03(c)(i)(y); and

 

(iii)          the Company shall (x) register the Corporation as the owner of the Redeemed Units and (y) if the Common Units are certificated, issue to the Redeeming Member a certificate for a number of Units equal to the difference (if any) between the number of Common Units evidenced by the certificate surrendered by the Redeeming Member pursuant to Section 11.03(c)(i)(x) and the Redeemed Units, and issue to the Corporation a certificate for the number of Redeemed Units.

 

Section 11.04      Reservation of shares of Class A Common Stock; Listing; Certificate of the Corporation. At all times the Corporation shall reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon a Share Settlement in connection with a Redemption or Direct Exchange, such number of shares of Class A Common Stock as shall be issuable upon any such Share Settlement pursuant to a Redemption or Direct Exchange. Nothing contained in this Section 11.04 shall be construed to preclude the Corporation from satisfying its obligations in respect of any such Share Settlement pursuant to a Redemption or Direct Exchange by delivery of purchased Class A Common Stock (which may or may not be held in the treasury of the Corporation) or by way of Cash Settlement. The Corporation shall deliver Class A Common Stock that has been registered under the Securities Act with respect to any Share Settlement pursuant to a Redemption or Direct Exchange to the extent a registration statement is effective and available with respect to such shares. Prior to such delivery, the Corporation shall use its commercially reasonable efforts to list the Class A Common Stock required to be delivered upon any such Share Settlement pursuant to a Redemption or Direct Exchange upon each national securities exchange upon which the outstanding shares of Class A Common Stock are listed at the time of such Share Settlement pursuant to a Redemption or Direct Exchange (it being understood that any such shares may be subject to transfer restrictions under applicable securities Laws). The Corporation covenants that all shares of Class A Common Stock issued in connection with a Share Settlement pursuant to a Redemption or Direct Exchange will, upon issuance, be validly issued, fully paid and non-assessable. The provisions of this Article XI shall be interpreted and applied in a manner consistent with any corresponding provisions of the Certificate of Incorporation (if any).

 

 

Section 11.05      Effect of Exercise of Redemption or Direct Exchange. This Agreement shall continue notwithstanding the consummation of a Redemption or Direct Exchange by a Member and all rights set forth herein shall continue in effect with respect to the remaining Members. To the extent the Redeeming Member has any remaining Units following such Redemption or Direct Exchange, the rights set forth in this Agreement shall continue to apply to the Units held by the Redeeming Member. No Redemption or Direct Exchange shall relieve a Redeeming Member of any prior breach of this Agreement by such Redeeming Member.

 

Section 11.06      Tax Treatment.

 

(a)            In connection with any Redemption or Direct Exchange, the Redeeming Member shall, to the extent it is legally entitled to deliver such form, deliver to the Manager or the Company, as applicable, a certificate, dated as of the Redemption Date, in a form reasonably acceptable to the Manager or the Company, as applicable, certifying as to such Redeeming Member’s taxpayer identification number and that such Redeeming Member is a not a foreign person for purposes of Section 1445 and Section 1446(f) of the Code (which certificate may be an IRS Form W-9 if then sufficient for such purposes under applicable Law) (such certificate a “Non-Foreign Person Certificate”). If a Redeeming Member is unable to provide a Non-Foreign Person Certificate in connection with a Redemption or a Direct Exchange, then such Redeeming Member and the Company shall cooperate to provide any other certification or determination described in Treasury Regulations Sections 1.1446(f)-2(b) and 1.1446(f)-2(c) or otherwise permitted under applicable Law at the time of such Redemption or Direct Exchange, and the Manager or the Company, as applicable, shall be permitted to withhold on the amount realized by such Redeeming Member in respect of such Redemption or Direct Exchange to the extent required under Section 1446(f) of the Code and Treasury Regulations promulgated thereunder after taking into account the certificate or other determination provided pursuant the preceding sentence. If a Redeeming Member is unable to provide a Non-Foreign Person Certificate in connection with a Redemption or a Direct Exchange, then upon request of the Redeeming Member and to the extent permitted under applicable Law, the Company shall deliver a certificate pursuant to Treasury Regulations Section 1.1445-11T(d)(2) certifying that 50 percent or more of the value of the gross assets of the Company does not consist of “U.S. real property interests” (as used in Treasury Regulations Section 1.1445-11T), or that 90 percent or more of the value of the gross assets of the Company does not consist of “U.S. real property interests” plus “cash or cash equivalents” (as used in Treasury Regulations Section 1.1445-11T). Notwithstanding the foregoing, if the Company is not legally entitled to provide the certificate described in the previous sentence, then the Corporation shall be permitted to withhold on the amount realized by such Redeeming Member in respect of such Redemption or Direct Exchange to the extent required under Section 1445 of the Code and Treasury Regulations.

 

(b)            Unless otherwise required by applicable Law, the parties acknowledge and agree that a Redemption or a Direct Exchange, as the case may be, shall be treated as a direct exchange of a Share Settlement or a Cash Settlement, as applicable, on the one hand, and the Redeemed Units, on the other hand, between the Corporation and the Redeeming Member for U.S. federal and applicable state and local income tax purposes.

 

 

Article XII.
ADMISSION OF MEMBERS

 

Section 12.01      Substituted Members. Subject to the provisions of Article X, in connection with the Permitted Transfer of a Unit under this Agreement, the Permitted Transferee shall become a Substituted Member on the effective date of such Transfer. Such effective date shall not be earlier than the date of compliance with the conditions to such Transfer. Such admission shall be shown on the books and records of the Company, including the Schedule of Members.

 

Section 12.02      Additional Members. Subject to the provisions of Article X, any Person that is not a Member as of the Effective Date may be admitted to the Company as an additional Member (any such Person, an “Additional Member”). Any such admission shall be condition upon furnishing to the Manager: (a) duly executed Joinder and counterparts to any applicable Other Agreements; and (b) such other documents or instruments as may be reasonably necessary or appropriate to effect such Person’s admission as a Member (including entering into such documents as may reasonably be requested by the Manager). Such admission shall become effective on the date on which the Manager determines in its sole discretion that such conditions have been satisfied and when any such admission is shown on the books and records of the Company, including the Schedule of Members.

 

Article XIII.
WITHDRAWAL AND RESIGNATION; TERMINATION OF RIGHTS

 

Section 13.01      Withdrawal and Resignation of Members. Except in the event of Transfers pursuant to Section 10.06, Redemptions and Direct Exchanges pursuant to Article XI and the Manager’s right to resign pursuant to Section 6.03, no Member shall have the power or right to withdraw or otherwise resign as a Member from the Company prior to the dissolution and winding up of the Company pursuant to Article XIV. Any Member, however, that attempts to withdraw or otherwise resign as a Member from the Company without the prior written consent of the Manager upon or following the dissolution and winding up of the Company pursuant to Article XIV, but prior to such Member receiving the full amount of Distributions from the Company to which such Member is entitled pursuant to Article XIV, shall be liable to the Company for all damages (including all lost profits and special, indirect and consequential damages) directly or indirectly caused by the withdrawal or resignation of such Member. Upon a Transfer of all of a Member’s Units in a Transfer permitted by this Agreement, subject to the provisions of Section 10.06, such Member shall cease to be a Member.

 

 

Article XIV.
DISSOLUTION AND LIQUIDATION

 

Section 14.01      Dissolution. The Company shall not be dissolved by the admission of Additional Members or Substituted Members or the attempted withdrawal, removal, dissolution, bankruptcy or resignation of a Member. The Company shall dissolve, and its affairs shall be wound up, upon (a “Liquidating Event”):

 

(a)            the decision of the Manager together with the written approval of the Members holding a majority of the Units then outstanding to dissolve the Company (excluding for purposes of such calculation the Corporation and all Units held directly or indirectly by it);

 

(b)            a dissolution of the Company under Section 18-801(4) of the Delaware Act, unless the Company is continued without dissolution pursuant to Section 18-801(4) of the Delaware Act; or

 

(c)            the entry of a decree of judicial dissolution of the Company under Section 18-802 of the Delaware Act.

 

Except as otherwise set forth in this Article XIV, the Company is intended to have perpetual existence. An Event of Withdrawal shall not in and of itself cause a dissolution of the Company, and the Company shall continue in existence subject to the terms and conditions of this Agreement.

 

Section 14.02      Winding Up. Subject to Section 14.05, on dissolution of the Company, the Manager (or in the event that there is no Manager or the Manager is in bankruptcy, any Person selected by the majority of Members) shall act as liquidating trustee or may appoint one or more Persons as liquidating trustee (each such Person, a “Liquidator”). The Liquidator shall proceed diligently to wind up the affairs of the Company and make final distributions as provided in this Agreement and in the Delaware Act. The costs of liquidation shall be borne as an expense of the Company. Until final distribution, the Liquidator shall, to the fullest extent permitted by applicable Law, continue to operate the properties of the Company with all of the power and authority of the Manager. Notwithstanding the foregoing, the Company shall engage in no further business except as may be necessary to preserve the value of the Company’s assets during the period of dissolution and liquidation. The steps to be accomplished by the Liquidator are as follows:

 

(a)            as promptly as possible after dissolution and again after final liquidation, the Liquidator shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company’s assets, liabilities and operations through the last day of the calendar month in which the dissolution occurs or the final liquidation is completed, as applicable;

 

(b)            the Liquidator shall pay, satisfy or discharge from the Company’s funds, or otherwise make adequate provision for payment and discharge of all debts, liabilities and obligations (including the establishment of a cash fund for contingent, conditional and unmatured liabilities in such amount and for such term as the Liquidator may reasonably determine) the following: first, all expenses incurred in connection with the liquidation; second, all of the debts, liabilities and obligations of the Company owed to creditors other than the Members; and third, all of the debts, liabilities and obligations of the Company owed to the Members (other than any payments or distributions owed to such Members in their capacity as Members pursuant to this Agreement); and following any payments pursuant to this Section 14.02(b);

 

(c)            all remaining assets of the Company shall be distributed to the Members, pro rata in proportion to each Member’s Common Unit Percentage Interest.

 

 

The distribution of cash and/or property to the Members in accordance with the provisions of this Section 14.02 and Section 14.03 below shall constitute a complete return to the Members of their Capital Contributions, a complete distribution to the Members of their interest in the Company and all of the Company’s property and shall constitute a compromise to which all Members have consented within the meaning of the Delaware Act. To the extent that a Member returns funds to the Company, it has no claim against any other Member for those funds.

 

Section 14.03      Deferment; Distribution in Kind. Notwithstanding the provisions of Section 14.02, but subject to the order of priorities set forth in Section 14.02, if upon dissolution of the Company the Liquidator determines that an immediate sale of part or all of the Company’s assets would be impractical or would cause undue loss (or would otherwise not be beneficial) to the Members, the Liquidator may, in its sole discretion and the fullest extent permitted by applicable Law, defer for a reasonable time the liquidation of any assets. The Liquidator shall not defer the liquidation of any assets necessary to satisfy the Company’s liabilities other than loans to the Company by any Member(s) and reserves. Subject to the order of priorities set forth in Section 14.02, the Liquidator may, in its sole discretion, distribute to the Members, in lieu of cash, either: (a) all or any portion of such remaining assets in-kind of the Company in accordance with the provisions of Section 14.02(c), (b) as tenants in common and in accordance with the provisions of Section 14.02(c), undivided interests in all or any portion of such assets of the Company; or (c) a combination of the foregoing. Any such Distributions in-kind shall be subject to: (y) such conditions relating to the disposition and management of such assets as the Liquidator deems reasonable and equitable; and (z) the terms and conditions of any agreements governing such assets (or the operation of such assets or the holders of such assets) at such time. Any assets of the Company distributed in kind will first be written up or down to their Fair Market Value, thus creating Net Profit or Net Loss (if any). Such Net Profit or Net Loss shall be allocated in accordance with Article V. The Liquidator shall determine the Fair Market Value of any property (other than cash) distributed.

 

Section 14.04      Cancellation of Certificate. On completion of the winding up of the Company as provided in this Agreement, the Manager (or such other Person or Persons as the Delaware Act may require or permit) shall file a certificate of cancellation of the Certificate with the Secretary of State of Delaware, cancel any other filings made pursuant to this Agreement that should be canceled and take such other actions as may be necessary to terminate the existence of the Company. The Company shall continue in existence for all purposes of this Agreement until it is terminated pursuant to this Section 14.04.

 

Section 14.05      Reasonable Time for Winding Up. A reasonable time, but in no event more than one year, shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets pursuant to Section 14.02 and Section 14.03 in order to minimize any losses otherwise attendant upon such winding up.

 

Section 14.06      Return of Capital. The Liquidator shall not be personally liable for the return of Capital Contributions or any portion of such Capital Contributions to the Members (it being understood that any such return shall be made solely from assets of the Company).

 

 

Article XV.
GENERAL PROVISIONS

 

Section 15.01      Power of Attorney.

 

(a)            Each Member constitutes and appoints the Manager (or the Liquidator, if applicable) with full power of substitution, as such Member’s true and lawful agent and attorney-in-fact, with full power and authority in such Member’s name, place and stead, to:

 

(i)            execute, swear to, acknowledge, deliver, file and record in the appropriate public offices: (A) this Agreement, all certificates and other instruments and all amendments of such amendments that the Manager deems appropriate or necessary to form, qualify, or continue the qualification of, the Company as a limited liability company in the State of Delaware and in all other jurisdictions in which the Company may conduct business or own property; (B) all instruments that the Manager deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms; (C) all conveyances and other instruments or documents that the Manager deems appropriate or necessary to reflect the dissolution, winding up and termination of the Company pursuant to the terms of this Agreement, including a certificate of cancellation; and (D) all instruments relating to the admission, substitution or resignation of any Member pursuant to Article XII or Article XIII; and

 

(ii)            sign, execute, swear to and acknowledge all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the reasonable judgment of the Manager, to evidence, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Members under this Agreement or is consistent with the terms of this Agreement, in the reasonable judgment of the Manager, to effectuate the terms of this Agreement.

 

(b)            The foregoing power of attorney is irrevocable and coupled with an interest. The foregoing power of attorney shall survive the death, disability, incapacity, dissolution, bankruptcy, insolvency or termination of any Member and the transfer of all or any portion of such Member’s Units and shall extend to such Member’s heirs, successors, assigns and personal representatives.

 

Section 15.02      Confidentiality.

 

(a)            Each of the Members (other than the Corporation) agrees to hold the Company’s Confidential Information in confidence and may not disclose or use such information except as otherwise authorized separately in writing by the Manager. “Confidential Information” as used in this Section 15.02 includes all information concerning the Corporation, the Company or their respective Subsidiaries, in whatever form, whether written, electronic or oral, including ideas, financial product structuring, business strategies, innovations and materials, all aspects of the Corporation’s and/or the Company’s business plan, proposed operation and products, corporate structure, financial and organizational information, analyses, proposed partners, software code and system and product designs, employees and their identities, equity ownership, the methods and means by which either the Corporation or the Company plans to conduct its business, all trade secrets, trademarks, tradenames and all intellectual property associated with the Corporation’s and/or the Company’s business. With respect to each Member, Confidential Information does not include information or material that: (a) is, or becomes, generally available to the public other than as a direct or indirect result of a disclosure by such Member or its Affiliates or representatives; (b) is, or becomes, available to such Member from a source other than the Corporation, the Company or their respective representatives, provided that such source is not, and was not, known to such Member to be bound by a confidentiality agreement with, or any other contractual, fiduciary or other legal obligation of confidentiality to, the Corporation, the Company or any of their respective Affiliates or representatives; (c) is approved for release by written authorization of the Chief Executive Officer, Chief Financial Officer or General Counsel of the Company or of the Corporation, or any other officer designated by the Manager; or (d) is, or becomes, independently developed by such Member or its respective representatives without use of or reference to the Confidential Information.

 

 

(b)            Solely to the extent it is reasonably necessary or appropriate to fulfill its obligations or to exercise its rights under this Agreement, each of the Members may disclose Confidential Information to its Subsidiaries, Affiliates, partners, directors, officers, employees, counsel, advisers, consultants, outside contractors and other agents, on the condition that such Persons keep the Confidential Information confidential to the same extent as such Member is required to keep the Confidential Information confidential. Notwithstanding the foregoing, such Member shall remain liable with respect to any breach of this Section 15.02 by any such Subsidiaries, Affiliates, partners, directors, officers, employees, counsel, advisers, consultants, outside contractors and other agents (as if such Persons were party to this Agreement for purposes of this Section 15.02).

 

(c)            Notwithstanding Section 15.02(a) or Section 15.02(b), each of the Members may disclose Confidential Information: (i) to the extent that such Member is required by Law (by oral questions, interrogatories, request for information or documents, subpoena, civil investigative demand or similar process) to disclose any of the Confidential Information; (ii) for purposes of reporting to its stockholders and direct and indirect equity holders (each of whom are bound by customary confidentiality obligations) the performance of the Company and its Subsidiaries and for purposes of including applicable information in its financial statements to the extent required by applicable Law or applicable accounting standards; or (iii) to any bona fide prospective purchaser of the equity or assets of a Member, or the Units held by such Member (provided, in each case, that such Member determines in good faith that such prospective purchaser would be a Permitted Transferee), or a prospective merger partner of such Member. Any disclosure pursuant to clause (iii) in this Section 15.02(c), shall be conditioned upon the Member informing such Persons of the confidential nature of such information and any such Persons agreement in writing to keep such information confidential in accordance with the contents of this Agreement. Each Member will be liable for any breaches of this Section 15.02 by any such Persons (as if such Persons were party to this Agreement for purposes of this Section 15.02). Notwithstanding any of the foregoing, nothing in this Section 15.02 will restrict in any manner the ability of the Corporation to comply with its disclosure obligations under Law, and the extent to which any Confidential Information is necessary or desirable to disclose.

 

 

Section 15.03      Amendments. Except as otherwise contemplated by this Agreement, this Agreement may be amended or modified (including by means of merger, consolidation or other business combination to which the Company is a party) upon the prior written consent of the Manager, together with the prior written consent of the holders of a majority of the Units then outstanding (excluding all Units held directly or indirectly by the Corporation). No alteration, modification or amendment shall be effective until written notice has been provided to the Members. Notwithstanding the foregoing, no amendment or modification:

 

(a)            to this Section 15.03 may be made without the prior written consent of the Manager and each of the Members;

 

(b)            to any of the terms and conditions of this Agreement, which terms and conditions expressly require the approval or action of certain Persons, may be made without obtaining the consent of the requisite number or specified percentage of such Persons who are entitled to approve or take action on such matter; and

 

(c)            to any of the terms and conditions of this Agreement which would (i) reduce the amounts distributable to a Member pursuant to Article IV and Article XIV in a manner that is not pro rata with respect to all Members, (ii) modify the limited liability of any Member or increase the liabilities of such Member under this Agreement, (iii) otherwise materially and adversely affect a holder of Units in a manner materially disproportionate to any other holder of Units or remove a right or privilege granted to a Member (other than amendments, modifications and waivers necessary to implement the provisions of Article XII) or (iv) alter or change any rights, preferences or privileges of any Units in a manner that is different or prejudicial relative to any other Units in the same class of Unit or materially and adversely affect the rights of any Member under Article XI, shall be effective against such affected Member or holder of Units without the prior written consent of such Member or holder of Units.

 

Notwithstanding any of the foregoing, the Manager may make any amendment to this Agreement (including Schedule 2) (i) of an administrative nature that is necessary in order to implement the substantive provisions of this Agreement, without the consent of any other Member; provided, that any such amendment does not otherwise contradict Section 15.03(c), or (ii) to reflect any changes to the Units, including the admission of new Members, Transfers of Units, or the issuance of any other capital stock of the Corporation in accordance with the terms of this Agreement.

 

Section 15.04      Title to Company Assets. Company assets shall be owned by the Company as an entity. No Member, individually or collectively, shall have any ownership interest in such assets of the Company or any portion of such assets. The Company shall hold title to all of its property in the name of the Company and not in the name of any Member. All assets of the Company shall be recorded as the property of the Company on its books and records, irrespective of the name in which legal title to such assets is held. The Company’s credit and assets shall be used solely for the benefit of the Company. No asset of the Company shall be transferred or encumbered for, or in payment of, any individual obligation of any Member.

 

 

Section 15.05      Addresses and Notices. All notices, consents, waivers and other communications under this Agreement shall be in writing and shall be deemed to have been duly given when delivered: (i) in person; (ii) by facsimile or other electronic means (including email), with affirmative confirmation of receipt; (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service; or (iv) three Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):

 

To the Company:

X-Energy Reactor Company, LLC

801 Thompson Avenue, Suite 400,

Rockville, MD 20852-1627

Attention: Steve Miller, General Counsel

Email:

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

Latham & Watkins LLP

555 Eleventh Street, NW, Suite 1000

Washington, D.C. 20004-1304

Attn: Paul Sheridan; John Slater

Email:

To the Corporation:

X-Energy, Inc.

801 Thompson Avenue, Suite 400,

Rockville, MD 20852-1627

Attention: Steve Miller, General Counsel

Email:

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

Latham & Watkins LLP

555 Eleventh Street, NW, Suite 1000

Washington, D.C. 20004-1304

Attn: Paul Sheridan; John Slater

Email:

To the Members, as set forth on Schedule 2.

 

Section 15.06      Binding Effect; Intended Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

 

Section 15.07      Creditors. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company or any of its Affiliates. No creditor who makes a loan to the Company or any of its Affiliates may have or acquire (except pursuant to the terms of a separate agreement executed by the Company in favor of such creditor) at any time as a result of making the loan any direct or indirect interest in Net Profits and Net Losses, Distributions, capital or property of the Company other than as a secured creditor.

 

Section 15.08      Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach of such covenant, duty, agreement or condition shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition. No waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement shall be effective unless in writing and signed by the party to be bound. Such waiver is effective only to the specific purpose, extent and instance so provided.

 

Section 15.09      Counterparts. This Agreement may be executed and delivered (including by electronic transmission) in one or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument.

 

Section 15.10      Applicable Law; Jurisdiction. This Agreement and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated by this Agreement, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to any choice of Law or conflict of Law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Laws of another jurisdiction. Any suit, dispute, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement shall be heard in the Court of Chancery of the State of Delaware. The parties: (i) consent to the exclusive jurisdiction of such court (and of the appropriate appellate courts) in any such suit, action or proceeding and (i) submit to the exclusive jurisdiction of each such court in any such proceeding or action; (ii) waive any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum; (iii) agree that all claims in respect of the proceeding or action shall be heard and determined only in any such court; and (iv) agree not to bring any proceeding or action arising out of or relating to this Agreement or the matters contemplated by this Agreement in any other court. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD, WHETHER WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT (INCLUDING BY PREPAID CERTIFIED MAIL WITH A VALIDATED PROOF OF MAILING RECEIPT) AND SHALL HAVE THE SAME LEGAL FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF DELAWARE. WITHOUT LIMITING THE FOREGOING, TO THE FULLEST EXTENT PERMITTED BY LAW, SERVICE OF PROCESS UPON SUCH PARTY AT THE ADDRESS REFERRED TO IN Section 15.05 (INCLUDING BY PREPAID CERTIFIED MAIL WITH A VALIDATED PROOF OF MAILING RECEIPT), TOGETHER WITH WRITTEN NOTICE OF SUCH SERVICE TO SUCH PARTY, SHALL BE DEEMED EFFECTIVE SERVICE OF PROCESS UPON SUCH PARTY.

 

 

Section 15.11      Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction. Upon such determination that any provision is invalid, illegal or unenforceable, this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained in this Agreement.

 

Section 15.12      Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from taking such actions as may be necessary or appropriate to achieve the purposes of this Agreement.

 

Section 15.13      Execution and Delivery by Electronic Signature and Electronic Transmission. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, contemplated by this Agreement or entered into by the Company in accordance with this Agreement, and any amendments to this Agreement or to such agreement or instrument, to the extent signed and delivered by means of an electronic signature or electronic transmission shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version of such agreement or instrument delivered in person. Such signature and delivery by electronic signature or electronic transmission includes by a facsimile machine or via email. At the request of any party to this Agreement or to any such agreement or instrument, each other party shall re-execute original forms of such agreement or instrument and deliver them to all other parties. No party to this Agreement or to any such agreement or instrument shall raise the use of electronic signature or electronic transmission to execute or deliver a document or the fact that any signature or agreement or instrument was transmitted or communicated through such electronic transmission as a defense to the formation of a contract and each such party forever waives any such defense.

 

Section 15.14      Right of Offset. Whenever the Company or the Corporation is to pay any sum (other than pursuant to Article IV) to any Member, any amounts that such Member owes to the Company or the Corporation that are not the subject of a good faith dispute may be deducted from that sum before payment. The distribution of Units to the Corporation shall not be subject to this Section 15.14.

 

Section 15.15      Entire Agreement. This Agreement, those documents expressly referred to in this Agreement (including the Registration Rights Agreement and the Tax Receivable Agreement), any indemnity agreements entered into in connection with the Seventh A&R LLC Agreement with any member of the board of directors at that time and other documents of even date with this Agreement embody the complete agreement and understanding among the parties. This Agreement and such documents, indemnity agreements and other documents supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter of this Agreement in any way. The Seventh A&R LLC Agreement is superseded in its entirety by this Agreement as of the Effective Date and shall be of no further force and effect thereafter, except to the extent reference to the Seventh A&R LLC Agreement is contemplated in this Agreement, and only for such limited purposes as stated in this Agreement.

 

 

Section 15.16      Remedies. Each Member shall have all rights and remedies set forth in this Agreement, all rights and remedies that such Person has been granted at any time under any other agreement or contract and all of the rights that such Person has under any Law. Any Person having any rights under any provision of this Agreement or any other agreements contemplated by this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by Law.

 

Section 15.17      Descriptive Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include all genders, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. The use of the word “including” in this Agreement shall be by way of example rather than by limitation. Reference to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms of such agreement, document or instrument, and if applicable of this Agreement. Without limiting the immediately preceding sentence, no amendment or other modification to any agreement, document or instrument that requires the consent of any Person pursuant to the terms of this Agreement or any other agreement will be given effect under this Agreement unless such Person has consented in writing to such amendment or modification. Whenever required by the context, references to a Fiscal Year shall refer to a portion of such Fiscal Year. The use of the words “or,” “either” and “any” shall not be exclusive. Each of the parties has been represented by independent counsel of its own choice during the negotiation and execution of this Agreement and the parties and their counsel have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties. No presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

 

 

IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Eighth Amended and Restated Limited Liability Company Agreement as of the date first written above.

 

	COMPANY:
	X-ENERGY REACTOR COMPANY, LLC
	By:
	Name:
	Title:

 

 

IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Eighth Amended and Restated Limited Liability Company Agreement as of the date first written above.

 

	MANAGER:
	X-ENERGY, INC.
	By:
	Name:
	Title:

 

 

IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Eighth Amended and Restated Limited Liability Company Agreement as of the date first written above.

 

MEMBERS:

 

 

SCHEDULE 1

 

schedule of Pre-ipo members

 

 

SCHEDULE 2*

 

SCHEDULE OF MEMBERS

 

Member / Contact Information	Common Units
X-Energy, Inc.   801 Thompson Avenue, Suite 400 Rockville, MD 20852 Phone: Attention: Email:
Total

 

* This Schedule of Members shall be updated from time to time in accordance with this Agreement, including to reflect any adjustment with respect to any subdivision (by Unit split or otherwise) or any combination (by reverse Unit split or otherwise) of any outstanding Units, or to reflect any additional issuances of Units pursuant to this Agreement.

 

 

Exhibit A

 

FORM OF JOINDER AGREEMENT

 

This JOINDER AGREEMENT, dated as of _________________, 20___ (this “Joinder”), is delivered pursuant to the Eighth Amended and Restated Limited Liability Company Agreement, dated as of                          (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “LLC Agreement”) by and among X-Energy Reactor Company, LLC, a Delaware limited liability company (the “Company”), X-Energy, Inc., a Delaware corporation and the sole managing member of the Company (the “Corporation”), and each of the Members from time to time party to the LLC Agreement. Capitalized terms used but not otherwise defined in this Joinder have the respective meanings set forth in the LLC Agreement.

 

1.

Joinder to the LLC Agreement. Upon the execution of this Joinder by the undersigned and delivery of this Joinder to the Corporation, the undersigned is and will be a Member under the LLC Agreement and a party to the LLC Agreement, with all the rights, privileges and responsibilities of a Member under the LLC Agreement. The undersigned agrees that it shall comply with and be fully bound by the terms of the LLC Agreement as if it had been a signatory to the LLC Agreement as of the date of the LLC Agreement. The undersigned acknowledges, agrees and confirms that it has received a copy of the LLC Agreement and has reviewed the same and understands its contents.

 

2.

Incorporation by Reference. All terms and conditions of the LLC Agreement are incorporated by reference in this Joinder as if set forth in this Joinder in full.

 

3.

Address. All notices under the LLC Agreement to the undersigned shall be direct to:

 

	[Name]
	[Address]
	[City, State, Zip Code]
	Attn:
	E-mail:

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Joinder as of the day and year first above written.

 

	[NAME OF NEW MEMBER]
	By:
	Name:
	Title:

 

 

Acknowledged and agreed
as of the date first set forth above:

 

X-ENERGY REACTOR COMPANY, LLC
By:	X-Energy, Inc.,
	its Manager
By:
Name:
Title:

 

 

Exhibit B-1

 

FORM OF AGREEMENT AND CONSENT OF SPOUSE

 

The undersigned spouse of _____________________________ (the “Member”), a party to the Eighth Amended and Restated Limited Liability Company Agreement, dated as of                      (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”) by and among X-Energy Reactor Company, LLC, a Delaware limited liability company (the “Company”), X-Energy, Inc., a Delaware corporation and the sole managing member of the Company, and each of the Members from time to time party to the Agreement (capitalized terms used but not otherwise defined in this Agreement and Consent of Spouse have the respective meanings set forth in the Agreement), acknowledges on such Person’s own behalf that:

 

I have read the Agreement and understand its contents. I acknowledge and understand that under the Agreement, any interest I may have, community property or otherwise, in the Units owned by the Member is subject to the terms of the Agreement, which include certain restrictions on Transfer.

 

I consent to and approve the Agreement. I agree that said Units and any interest I may have, community property or otherwise, in such Units are subject to the provisions of the Agreement and that I will take no action at any time to hinder operation of the Agreement on said Units or any interest I may have, community property or otherwise, in said Units.

 

I acknowledge that the meaning and legal consequences of the Agreement have been explained fully to me and are understood by me, and that I am signing this Agreement and consent without any duress and of free will.

 

Dated: _____________________________

 

	[NAME OF SPOUSE]
	By:
	Name:

 

 

Exhibit B-2

 

FORM OF SPOUSE’S CONFIRMATION OF SEPARATE PROPERTY

 

I, the undersigned, the spouse of _____________________________ (the “Member”), who is a party to the Eighth Amended and Restated Limited Liability Company Agreement, dated as of                              (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”) by and among X-Energy Reactor Company, LLC, a Delaware limited liability company (the “Company”), X-Energy, Inc., a Delaware corporation and the sole managing member of the Company, and each of the Members from time to time party to the Agreement (capitalized terms used but not otherwise defined in this Spouse’s Confirmation of Separate Property have the respective meanings set forth in the Agreement), acknowledge and confirm that the Units owned by said Member are the sole and separate property of said Member, and I disclaim any interest in same.

 

I acknowledge that the meaning and legal consequences of this Member’s spouse’s confirmation of separate property have been fully explained to me and are understood by me, and that I am signing this Member’s spouse’s confirmation of separate property without any duress and of free will.

 

Dated: _____________________________

 

	[NAME OF SPOUSE]
	By:
	Name:

 

 

Exhibit C

 

POLICY REGARDING CERTAIN EQUITY ISSUANCES

 

[To come.]

 

 

 

Exhibit 10.11

 

Exhibit D

 

FORM OF LOCK-UP AGREEMENT

 

___________, 20__

 

J.P. MORGAN SECURITIES LLC
As Representative of
the several Underwriters listed in
Schedule 1 to the Underwriting
Agreement referred to below

 

c/o J.P. Morgan Securities LLC
270 Park Avenue
New York, NY 10017

 

Re:     X-Energy, Inc. --- Public Offering

 

Ladies and Gentlemen:

 

The undersigned understands that you, as Representative of the several Underwriters, propose to enter into an underwriting agreement (the “Underwriting Agreement”) with X-Energy, Inc., a Delaware corporation (the “Company”), X-Energy Reactor Company, LLC, providing for the public offering (the “Public Offering”) by the several Underwriters named in Schedule 1 to the Underwriting Agreement (the “Underwriters”), of shares of Class A common stock, par value $0.0001 per share (the “Common Stock”), of the Company (the “Securities”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.

 

In consideration of the Underwriters’ agreement to purchase and make the Public Offering of the Securities, and for other good and valuable consideration the receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of J.P. Morgan Securities LLC on behalf of the Underwriters (the “Representative”), the undersigned will not during the period beginning on the date of this letter agreement (this “Letter Agreement”) and ending at the close of business 180 days after the date of the final prospectus relating to the Public Offering (the “Prospectus”) (such period, the “Restricted Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock, or any securities convertible into or exercisable or exchangeable for Common Stock (including without limitation, Common Stock or such other securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise of a stock option or warrant) (collectively with the Common Stock, the “Lock-Up Securities”), (2) enter into any hedging, swap or other agreement or transaction that transfers, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise, (3) make any demand for, or exercise any right with respect to the registration of any Lock-Up Securities (other than in connection with the exercise of registration rights under the Stockholders’ Agreement referred to in the Prospectus; provided that such exercise of registration rights does not result in the public filing of a registration statement during the Restricted Period by the Company (and for the avoidance of doubt, a confidential submission of such registration statement with the Commission shall not constitute a public filing during the Restricted Period)), or (4) publicly disclose the intention to do any of the foregoing. The undersigned acknowledges and agrees that the foregoing precludes the undersigned from engaging during the Restricted Period in any hedging or other transactions or arrangements (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) designed or intended, or which could reasonably be expected to lead to or result in, a sale or disposition or transfer (whether by the undersigned or any other person) of any economic consequences of ownership, in whole or in part, directly or indirectly, of any Lock-Up Securities, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of Lock-Up Securities, in cash or otherwise.

 

 

Notwithstanding the foregoing, the undersigned may:

 

(a) transfer or otherwise dispose of, directly or indirectly, in whole or in part, the undersigned’s Lock-Up Securities:

 

(i) as a bona fide gift or gifts, or for bona fide estate planning purposes, including without limitation to charitable organizations or educational institutions,

 

(ii) by will, other testamentary document or intestacy,

 

(iii) to any member of the undersigned’s immediate family member or to any trust or other legal entity for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, or if the undersigned is a trust, to a trustor, trustee or beneficiary of the trust or to the estate of a trustor, trustee or beneficiary of such trust (for purposes of this Letter Agreement, “immediate family” shall mean any relationship by blood, current or former marriage, domestic partnership or adoption, not more remote than first cousin),

 

(iv) to a corporation, partnership, limited liability company or other entity of which the undersigned and the immediate family of the undersigned are the legal and beneficial owner of all of the outstanding equity securities or similar interests,

 

(v) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (i) through (iv) above,

 

(vi) if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, (A) to another corporation, partnership, limited liability company, trust or other business entity that is an affiliate (as defined in Rule 405 promulgated under the Securities Act) of the undersigned, or to any investment fund, vehicle, account, portion of a fund, vehicle or account or other entity which fund or entity controls or manages or is controlled managing or managed by, or under common control with, the undersigned or affiliates of the undersigned (including, for the avoidance of doubt, where the undersigned is a partnership, to its general partner or a successor partnership or fund, or any other funds, vehicles, accounts or portions of funds, vehicles or accounts managed by such partnership), or (B) as part of a distribution, disposition or transfer to the undersigned’s members, shareholders, partners, other equityholders or to the estate of such members, shareholders, partners or other equityholders,

 

 

(vii) by operation of law, such as pursuant to a qualified domestic order, divorce settlement, divorce decree or separation agreement, or pursuant to a final order of court of regulatory agency,

 

(viii) to the Company from an employee, independent contractor or service provider of the Company upon death, disability, termination of employment or cessation of services, in each case, of such employee, independent contractor or service provider,

 

(ix) as part of a sale of the undersigned’s Lock-Up Securities acquired in open market transactions after the closing date for the Public Offering or to the Company pursuant to any contractual arrangement that provides the Company with a right to purchase Lock-Up Securities,

 

(x) to the Company in connection with (A) the vesting, settlement, or exercise of restricted stock units, options, warrants or other rights to purchase shares of Common Stock (including, in each case, by way of “net” or “cashless” exercise), including for the payment of exercise price and tax and remittance payments due as a result of the vesting, settlement, or exercise of such restricted stock units, options, warrants or rights, provided that any such shares of Common Stock received upon such exercise, vesting or settlement shall be subject to the terms of this Letter Agreement, and provided further that any such restricted stock units, options, warrants or rights are held by the undersigned pursuant to an agreement or equity awards granted under a stock incentive plan or other equity award plan, each such agreement or plan which is described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (B) the repurchase of Ordinary Shares issued pursuant to equity awards granted under a share incentive plan or other equity award plan, limited only to a plan that is described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or (C) a right of first refusal that the Company has with respect to transfers of such shares or securities,

 

(xi) pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the Board of Directors of the Company and made to all holders of the Company’s capital stock involving a Change of Control (as defined below) of the Company (for purposes hereof, “Change of Control” shall mean the transfer (whether by tender offer, merger, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons, of shares of capital stock if, after such transfer, such person or group of affiliated persons would hold at least a majority of the outstanding voting securities of the Company (or the surviving entity)); provided that in the event that such tender offer, merger, consolidation or other similar transaction is not completed, the undersigned’s Lock-Up Securities shall remain subject to the provisions of this Letter Agreement,

 

 

(xii) in connection with open market transactions, including any transactions pursuant to any plans entered into or established pursuant to clause (d) below, to generate such amount of net proceeds to the undersigned from such sales (after deducting commissions) in an aggregate amount up to the total amount of taxes or estimated taxes (as applicable) that become due as a result of the vesting, exercise and/or settlement of Company equity awards held by the undersigned and issued pursuant to a plan or arrangement described in the Prospectus that vest, are exercised and/or settle during the Restricted Period, provided that, for the avoidance of doubt, any Lock-Up Securities retained by the undersigned after giving effect to this provision shall be subject to the terms of this Letter Agreement,

 

(xiii) as any pledge, charge, hypothecation or other granting of a security interest in the Common Stock or as any security convertible into Common Stock to one or more banks, financial or other lending institutions (“Lenders”) as collateral or security for or in connection with any margin loan or other loans, advances or extensions of credit entered into by the undersigned or any of its direct or indirect subsidiaries and any transfers of such Common Stock or such other securities to the applicable Lender(s) or other third parties upon or following foreclosure upon or enforcement of such Common Stock or such securities in accordance with the terms of the documentation governing any margin loan or other loan, advance, or extension of credit (including, without limitation, pursuant to any agreement or arrangement existing as of the date hereof); provided that with respect to any pledge, charge, hypothecation or other granting of a security interest set forth above after the execution of this Letter Agreement, the applicable Lender(s) shall be informed of the existence and contents of this Letter Agreement before entering into any margin loan or other loans, advances or extensions of credit and further, provided that any purchaser or transferee of such Common Stock or such other securities shall, upon foreclosure on the pledged securities, sign and deliver a lock-up agreement substantially in the form of this Letter Agreement,

 

(xiv) in connection with any reclassification or conversion of the shares of Common Stock; provided that any shares of Common Stock received upon such conversion or reclassification will be subject to the restrictions set forth in this Letter Agreement,

 

(xv) to the sale of Common Stock to be sold by the undersigned pursuant to the Underwriting Agreement, and

 

(xvi) with the prior written consent of J.P. Morgan Securities LLC;

 

provided that (A) in the case of any transfer or distribution pursuant to clause (a)(i), (ii), (iii), (iv), (v), (vi) and (vii), such transfer shall not involve a disposition for value and each donee, devisee, transferee or distributee shall execute and deliver to the Representative a lock-up letter in the form of this Letter Agreement, (B) in the case of any transfer or distribution pursuant to clause (a) (i), (ii), (iii), (iv), (v), (vi), (ix) and (x), no filing by any party (donor, donee, devisee, transferor, transferee, distributer or distributee) under the Exchange Act, or other public announcement shall be required or shall be made voluntarily in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the Restricted Period referred to above) and (C) in the case of any transfer or distribution pursuant to clause (a)(vii) and (viii) it shall be a condition to such transfer that no public filing, report or announcement shall be voluntarily made and if any filing under Section 16(a) of the Exchange Act, or other public filing, report or announcement reporting a reduction in beneficial ownership of shares of Common Stock in connection with such transfer or distribution shall be legally required during the Restricted Period, such filing, report or announcement shall clearly indicate in the footnotes thereto the nature and conditions of such transfer;

 

 

(b) exercise outstanding options, settle restricted stock units or other equity awards or exercise warrants pursuant to plans described in the Registration Statement, the Pricing Disclosure Package and the Prospectus; provided that any Lock-Up Securities received upon such exercise, vesting or settlement shall be subject to the terms of this Letter Agreement;

 

(c) convert outstanding preferred stock, warrants to acquire preferred stock or convertible securities into shares of Common Stock or warrants to acquire shares of Common Stock; provided that any such shares of Common Stock or warrants received upon such conversion shall be subject to the terms of this Letter Agreement;

 

(d) enter into or establish trading plans pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Lock-Up Securities; provided that (i) such plans do not provide for the transfer of Lock-Up Securities during the Restricted Period (other than pursuant to clause (a)(xii) above) and (ii) to the extent a filing by any party under the Exchange Act or other public announcement shall be required or made voluntarily in connection with such trading plan, such public announcement or filing under the Exchange Act made by any person regarding the establishment of such plan during the Restricted Period shall include a statement that the undersigned is not permitted to transfer, sell or otherwise dispose of securities under such plan during the Restricted Period in contravention of this Letter Agreement (except as otherwise allowed pursuant to clause (a)(xii) above);

 

(e) make any demand or requests for, exercise any right with respect to, or take any action in preparation of the registration by the Company under the Securities Act of the undersigned’s Lock-Up Securities or other securities; provided that (i) no public filing with the Commission or any other public announcement may be made during the Restricted Period in relation to such registration, (ii) the Representative must have received prior written notice from the Company and/or the undersigned of a confidential submission of a registration statement with the Commission during the Restricted Period at least five business days prior to such submission, and (iii) no Lock-up Securities or other securities of the Company may be sold, distributed or exchanged prior to the expiration of the Restricted Period; and

 

(f) sell the Securities to be sold by the undersigned pursuant to the terms of the Underwriting Agreement.

 

In addition, nothing in this Letter Agreement shall prevent the transfer, conversion, reclassification or exchange of any Lock-Up Securities pursuant to the Restructuring Transactions as described in the Prospectus; provided that any Lock-Up Securities received in the Restructuring Transactions remain subject to the terms of this Letter Agreement. Further, notwithstanding anything to the contrary in this Letter Agreement:

 

 

(a) The Restricted Period will end ten trading days prior to the commencement of a blackout period if (i) at least 120 days have elapsed since the date of the Prospectus and (ii) the Restricted Period is scheduled to end during or within five trading days prior to a blackout period; provided that, (A) promptly upon the Company’s determination of the date of the blackout-related release, and at least two trading days in advance of the date of such release, the Company shall notify the Representative of the date of the blackout-related release; and (B) the Company must announce, through a major news service or Form 8-K, the date of the blackout-related release at least two trading days in advance of such release. For the avoidance of doubt, in no event shall the Restricted Period end earlier than 120 days after the date of the Prospectus pursuant to the blackout-related release. For purposes of this Lock-Up Agreement, “blackout period” shall mean a broadly applicable and regularly scheduled period during which trading in the Company’s securities would not be permitted under the Company’s insider trading policy.

 

If the undersigned is not a natural person, the undersigned represents and warrants that no single natural person, entity or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) beneficially owns, directly or indirectly, 50% or more of the common equity interests, or 50% or more of the voting power, in the undersigned.

 

If the undersigned is an officer or director of the Company, the undersigned further agrees that the foregoing provisions shall be equally applicable to any Company-directed Securities the undersigned may purchase in the Public Offering.

 

If the undersigned is an officer or director of the Company, (a) the Representative, on behalf of the Underwriters, agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Lock-Up Securities, the Representative, on behalf of the Underwriters, will notify the Company of the impending release or waiver; provided, that the failure to give such notice shall not give rise to any claim or liability against the Underwriters, and (b) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the Representative, on behalf of the Underwriters, hereunder to any such officer or director shall only be effective two business days after the publication date of such announcement. The provisions of this paragraph will not apply if (i) the release or waiver is effected solely to permit a transfer not for consideration or that is to an immediate family member as defined in FINRA Rule 5130(i)(5) and (ii) the transferee has agreed in writing to be bound by the same terms described in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer.

 

In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.

 

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned. Any signature to this Letter Agreement may be delivered by facsimile, electronic mail (including pdf) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the fullest extent permitted by applicable law.

 

 

The undersigned acknowledges and agrees that the Underwriters have not provided any recommendation or investment advice nor have the Underwriters solicited any action from the undersigned with respect to the Public Offering of the Securities and the undersigned has consulted their own legal, accounting, financial, regulatory and tax advisors to the extent deemed appropriate. The undersigned further acknowledges and agrees that, although the Representative may be required or choose to provide certain Regulation Best Interest and Form CRS disclosures to you in connection with the Public Offering, the Representative and the other Underwriters are not making a recommendation to you to participate in the Public Offering, enter into this Letter Agreement, or sell any Shares at the price determined in the Public Offering, and nothing set forth in such disclosures is intended to suggest that the Representative or any Underwriter is making such a recommendation.

 

The undersigned understands that, if the Underwriting Agreement does not become effective by ________, 20___, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold thereunder, the undersigned shall be released from all obligations under this Letter Agreement. The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter Agreement.

 

This Letter Agreement and any claim, controversy or dispute arising under or related to this Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

	Very truly yours,
	[NAME OF STOCKHOLDER]
	By:
	Name:
	Title:

 

 

 

Exhibit 10.12

 

MASTER REORGANIZATION AGREEMENT

 

BY AND AMONG

 

X-ENERGY REACTOR COMPANY, LLC,

 

X-ENERGY, INC.,

 

AND THE OTHER PARTIES HERETO

 

 

[ · ], 2026

 

 

 

TABLE OF CONTENTS

 

		Page
Article I DEFINITIONS AND CONSTRUCTION		1
Section 1.1	Definitions	1
Section 1.2	Other Definitions	4
Article II RESTRUCTURING ACTIONS AND RELATED MATTERS		6
Section 2.1	Recapitalization	6
Section 2.2	Amended and Restated Certificate of Incorporation and Bylaws of PubCo	7
Section 2.3	Blocker Merger	7
Section 2.4	Directors and Officers	8
Section 2.5	XERC Member Contributions and Subscriptions	8
Section 2.6	Amendment and Restatement of Limited Liability Company Agreements	10
Section 2.7	PubCo Contributions	10
Section 2.8	[Management Holdings Liquidation	10
Article III INITIAL PUBLIC OFFERING AND RELATED MATTERS		11
Section 3.1	Underwriters Agreement	11
Section 3.2	Tax Receivable Agreement	11
Section 3.3	Registration Rights Agreement	11
Article IV REPRESENTATIONS AND WARRANTIES		11
Section 4.1	Organization	11
Section 4.2	Authority; Enforceability	11
Section 4.3	Consents and Approvals; No Violations	12
Section 4.4	Ownership of Interests	12
Section 4.5	Bankruptcy	12
Section 4.6	Litigation	12
Section 4.7	Independent Investigation	12
Section 4.8	Blocker Taxes	13
Article V MISCELLANEOUS		14
Section 5.1	Intended Tax Treatment; Tax Elections	14
Section 5.2	Transfer Taxes	14
Section 5.3	Withholding	15
Section 5.4	Further Assurances	15
Section 5.5	Governing Law	15
Section 5.6	Counterparts	16
Section 5.7	Successors and Assigns; No Third Party Rights	16

 

 

Section 5.8	Severability	16
Section 5.9	Waivers and Amendments	16
Section 5.10	Entire Agreement; Survival	16

  

  

MASTER REORGANIZATION AGREEMENT

 

This MASTER REORGANIZATION AGREEMENT (this “Agreement”) is entered into on this [ · ]th day of [ · ] 2026, by and among each of the following entities (each, a “Party,” and collectively, the “Parties”): (i) X-Energy Reactor Company, LLC, a Delaware limited liability company (“XERC”), (ii) X-Energy, Inc., a Delaware corporation (“PubCo”), (iii) each of the entities listed on the signature pages hereto under the heading “Blockers” (collectively, the “Blockers”), (v) X-Energy Management, LLC, a Delaware limited liability company (“Management Holdings”) and (vi) each of the individuals and entities listed on the signature pages hereto under the heading “Other Investors” (the “Other Investors” and, together with the Blockers and Management Holdings, each an “Investor” and, together, the “Investors”).

 

RECITALS

 

WHEREAS, in connection with the proposed initial public offering of PubCo (the “Initial Public Offering”), the Parties desire to effect an organizational restructuring of certain of their affiliates and direct and indirect subsidiaries (including certain affiliates and/or subsidiaries to be formed as part of such organizational restructuring) through a series of sequential transactions as more fully set forth in this Agreement (such transactions together, the “Restructuring”);

 

WHEREAS, in connection with and prior to the Restructuring, (i) certain Investors exercised and converted warrants issued by XERC into Common Units and (ii) GWN Holdings, LLC elected for its warrant issued by XERC to remain outstanding;

 

WHEREAS, the Parties wish to facilitate an Initial Public Offering of PubCo using an “Up-C” structure that entails, among other things, offering shares of Class A Common Stock, par value $0.0001 per share, of PubCo (“Class A Common Stock”) to the public, pursuant to, and as more fully described in, a registration statement on Form S-1 (No. 333-·) (including the prospectus included therein and the exhibits thereto) filed by PubCo with the U.S. Securities and Exchange Commission, as amended from time to time (the “Registration Statement”); and

 

WHEREAS, in connection with the Initial Public Offering, the Parties desire to effect the Restructurings and other transactions set forth in this Agreement, which will occur on the terms and in the sequence set forth herein.

 

NOW, THEREFORE, the Parties agree as follows:

 

AGREEMENT

 

Article I
DEFINITIONS AND CONSTRUCTION

 

Section 1.1         Definitions.

 

“Affiliate” with respect to a specified Person means each other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. The term “control” (including with correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of voting securities or by contract or other agreement or otherwise) of a Person. With respect to each Investor, each of the following shall be deemed an “Affiliate”: (a) a trust, family limited partnership or similar estate planning vehicle, under which the distribution of Units may be made only to beneficiaries who are such Investor’s, such Investor’s current or former spouse, siblings, parents, or spouse’s or former spouse’s parents or siblings or lineal descendants (whether natural or adopted) of the Investor, such Investor’s current or former spouse, siblings, parents or current or former spouse’s parents or siblings and any charitable foundation of such Investor; (b) a charitable remainder trust, the income of which shall be paid to such Investor during such Investor’s life; and (c) such Investor’s current or former spouse, siblings, parents, or current or former spouse’s parents or siblings or lineal descendants (whether natural or adopted) of the Investor, such Investor’s current or former spouse, siblings, parents or current or former spouse’s siblings or parents and any charitable foundation of such Investor.

 

 

“Business Day” means any day (except Saturday or Sunday) on which commercial banks located in New York, New York are generally open for business.

 

“Blocker Investors” means, collectively, the entities set forth under the heading “Blocker Investors” on Schedule 1 hereto.

 

“Class A Common Stock of PubCo” has the meaning set forth in the Recitals.

 

“Class B Common Stock of PubCo” has the meaning set forth in the A&R Charter of PubCo.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Units” means “Units” (as defined in that certain Eighth A&R LLCA of XERC).

 

“Continuing Equity Owners” means, collectively, the Investors set forth under the heading “Continuing Equity Owner” on Schedule  1 hereto.

 

“DGCL” means the General Corporation Law of the State of Delaware, as amended from time to time.

 

“DLLCA” means the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.), as amended from time to time.

 

“Effectiveness” means the effectiveness of the Registration Statement related to the Initial Public Offering.

 

“Eighth A&R LLCA of XERC” means that certain Eighth Amended and Restated Limited Liability Company Agreement of XERC.

 

“Final Prospectus” means the final prospectus filed by PubCo with the U.S. Securities and Exchange Commission pursuant to Rule 424 under the Securities Act of 1933.

 

 

“Former Equity Owners” means, collectively, all Investors other than the Blocker Investors, Management Holdings and the Continuing Equity Owners.

  

“Governmental Authority” means the United States of America and any foreign country, any state, commonwealth, territory or possession thereof and any political subdivision or quasi-governmental authority of any of the same, including any court, tribunal, department, commission, board, bureau, agency, county, municipality, province, parish or other instrumentality of any of the foregoing.

 

“Law” means any applicable federal, state, provincial, municipal, local or foreign statute, law, treaty, ordinance, regulation, rule, code, order or rule of common law.

 

“Legal Proceeding” means any action, arbitration, audit, claim, cause of action, demand, hearing, investigation, litigation, mediation, proceeding suit (whether civil, criminal, administrative, investigative, or informal, public or private, and whether in law or in equity) or Order commenced, brought, heard or conducted by or before, or otherwise involving, any Governmental Authority (whether or not any Governmental Authority is a party to such Legal Proceeding).

 

“Lock-Up Period” means the period established pursuant to a lock-up agreement entered into among the Investors and the Underwriters.

 

“Management Holdings LLCA” means that certain Limited Liability Company Agreement of Management Holdings.

 

“Order” means any order, award, decision, injunction, judgment, ruling, writ, decree, determination, settlement, stipulation or verdict entered, issued, made or rendered by, or entered into with, any Governmental Authority.

 

“Person” means an individual or any corporation, partnership, limited liability company, trust, unincorporated organization, association, joint venture or any other organization or entity, whether or not a legal entity.

 

“Profits Interests” means the Class B Common Units (as defined in the Management Holdings LLCA).

 

“Profits Interests Holder” means the holders of Profits Interests.

 

“Recapitalization Effective Time” means immediately following the Effectiveness and prior to the Blocker Merger.

 

“Seventh A&R LLCA of XERC” means that certain Seventh Amended and Restated Limited Liability Company Agreement of XERC.

 

“Underwriters” means the underwriters named in the Registration Statement.

 

“Underwriters’ Option” means the option, at the election of the Underwriters, to purchase additional shares of Class A Common Stock pursuant to the Underwriting Agreement.

 

 

“Underwriting Agreement” means the underwriting agreement to be entered into by PubCo with the Representatives (as defined in the Underwriting Agreement) in connection with the Initial Public Offering and pursuant to which PubCo shall agree to issue and sell (a) a certain number of shares of Class A Common Stock to the Underwriters at the price set forth in the Underwriting Agreement plus, (b) at the election of the Underwriters, up to a certain number of additional shares of Class A Common Stock pursuant to the Underwriters’ Option.

 

“Tax” means any U.S. federal, state, local or non-U.S. taxes, levies, fees, imposts, assessments, duties and charges of whatever kind in the nature of a tax (including any interest, penalties, or additions attributable thereto, imposed in connection therewith or imposed with respect thereto), including, without limitation, taxes imposed on, or measured by, net or gross income, alternative minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital gains, profits, windfall profits, gross receipts, value added, sales, use, environmental, excise, custom, transfer, registration, stamp, real property, personal property, ad valorem, payroll, and withholding.

 

“Tax Return” means any return, report, declaration, form, claim for refund or information return or statement, including any schedule or related or supporting information, filed or required to be filed in connection with the determination, assessment or collection of any Tax, including any attachment, amendment, or supplement thereto.

 

“TRA Parties” means, collectively, Kamal Ghaffarian Revocable Trust, IBX Opportunity GP, Inc., Ares X-Energy Holdings LP, GM Enterprises, LLC, Ares X-Energy Co-Invest LP, ACIP Investments Pooling LLC - Series 31, and Jane Street Global Trading, LLC.

 

“Treasury Regulations” means the United States Treasury regulations promulgated under the Code.

 

“Units” has the meaning given to such term in the Seventh A&R LLCA of XERC.

 

Section 1.2            Other Definitions. Each of the following terms is defined in the Section set forth opposite such term:

 

Agreement	Preamble
Blocker Certificate of Merger	Section 2.3(b)
Blocker Equity Interests	Section 2.3(e)(i)
Blocker Investors	Section 1.1
Blocker Merger	Section 2.3(b)
Blocker Merger Effective Time	Section 2.3(d)
Blocker Merger Surviving Company	Section 2.3(b)
Blockers	Preamble
Chosen Courts	Section 5.5
Class A Common Stock	Recital
Class B Common Stock Subscription	Section 2.5(c)(ii)
Continuing Equity Owner Contributions	Section 2.5(c)(i)
Former Equity Owner Contributions	Section 2.5(a)(i)
Former Equity Owners	Section 1.1

 

 

Governmental Authority	Section 1.1
Initial Public Offering	Recital
Intended Tax Treatment	Section 5.1(a)
Investor	Preamble
IPO Closing	Section 2.2
IPO Proceeds	Section 2.7(a)
Management Holdings	Preamble
Management Holdings Common Units	Section 2.1(b)(i)
Management Holdings Contribution	Section 2.5(b)(i)
Management Holdings Liquidation	Section 2.8
Management Holdings Recapitalization	Section 2.1(b)(i)
Other Investors	Preamble
Party	Preamble
PubCo	Preamble
Registration Statement	Recital
Restructuring	Recital
Transfer Taxes	Section 5.2
Up-C	Recital
Use of Proceeds	Section 2.7(a)
XERC	Preamble
XERC Recapitalization	Section 2.1(a)(i)

 

Section 1.3        Headings; References; Interpretation. All Article and Section headings in this Agreement are for convenience only and will not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole, including, without limitation, all Exhibits attached hereto, and not to any particular provision of this Agreement. All references in this Agreement to Articles, Sections, Exhibits and Schedules will, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement and the Exhibits and Schedules attached hereto, and all such Exhibits and Schedules attached hereto are hereby incorporated in this Agreement and made a part of this Agreement for all purposes. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, will include all other genders, and the singular will include the plural and vice versa. The use in this Agreement of the word “including” following any general statement, term or matter will not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation,” “but not limited to,” or words of similar import) is used with reference thereto, but rather will be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

 

 

Article II
RESTRUCTURING ACTIONS AND RELATED MATTERS

 

The transactions described in this Article II shall occur in the order specified in this Agreement.

 

Section 2.1            Recapitalization.

 

(a)            XERC Recapitalization.

 

(i)        Following and on the same Business Day as the Effectiveness, all of XERC’s outstanding Units are hereby converted, effective as of the Recapitalization Effective Time, into the number of Common Unit set forth opposite the name of such Investor under the heading “Common Units held following XERC Recapitalization” on Schedule 1, and such Common Units are hereby issued and outstanding as of the Recapitalization Effective Time and the holders of such Common Units shall continue as Members of XERC (the “XERC Recapitalization”). The number of Common Units to be received by each Investor will be in accordance with Schedule 1, which determination will be consistent with Section 11.2(c) of the Seventh A&R LLCA of XERC.

 

(ii)       This Section 2.1(a) shall be treated as an amendment to Seventh A&R LLCA of XERC and as part of the Seventh A&R LLCA of XERC as described in Section 761(c) of the Code and Treasury Regulations Sections 1.761-1(c) and 1.704-1(b)(2)(ii)(h).

 

(iii)       The Parties (i) intend the XERC Recapitalization to be treated as a partnership recapitalization in accordance with Revenue Ruling 84-52 and Section 721(a) of the Code and (ii) shall not take, and shall not permit any of their respective Affiliates to take, any position (whether in a tax return or financial statement, before any Governmental Authority, in any judicial proceeding or otherwise) that is inconsistent with such tax treatment.

 

(b)           [Management Holdings Recapitalization.

 

(i)        Following and on the same Business Day as the Effectiveness, concurrently with the XERC Recapitalization, all of the Profits Interests, effective as of the Recapitalization Effective Time, are hereby converted into a number of common units of Management Holdings (the “Management Holdings Common Units”) in an aggregate amount equal to the number of Common Units held by Management Holdings immediately following the XERC Recapitalization and allocated to each Profits Interests Holders in accordance with the allocations determined by the Board of Directors of XERC (the “Management Holdings Recapitalization”). Each Management Holdings Common Units held by any Profits Interests Holders will have the same provisions with respect to vesting, forfeiture and/or transfer restrictions that applied to the Profits Interests held by such Profits Interests Holder immediately prior to the Management Holdings Recapitalization.

 

(ii)        This Section 2.1(b) shall be treated as an amendment to the Management Holdings LLCA and as part of the Management Holdings LLCA as described in Section 761(c) of the Code and Treasury Regulations Sections 1.761-1(c) and 1.704-1(b)(2)(ii)(h).

 

 

(iii)        The parties hereto (i) intend the Management Holdings Recapitalization to be treated as a partnership recapitalization in accordance with Revenue Ruling 84-52 and Section 721(a) of the Code and (ii) shall not take, and shall not permit any of their respective Affiliates to take, any position (whether in a tax return or financial statement, before any Governmental Authority, in any judicial proceeding or otherwise) that is inconsistent with such tax treatment.]

  

Section 2.2           Amended and Restated Certificate of Incorporation and Bylaws of PubCo. Immediately prior to the Blocker Merger, the Certificate of Incorporation of PubCo shall be, and hereby is, amended and restated in the form of the Amended and Restated Certificate of Incorporation of PubCo attached hereto as Exhibit A which shall be filed with the Delaware Secretary of State on the date of the initial closing of the Initial Public Offering (the “IPO Closing”), and PubCo shall adopt the Amended and Restated Bylaws of PubCo attached hereto as Exhibit B.

 

Section 2.3           Blocker Merger.

 

(a)           Immediately following the XERC Recapitalization, each Blocker, Blocker Investors and PubCo shall take all of the actions and consummate the transactions set forth in this Section 2.3 that are applicable to such Person, and each Party agrees that the Blocker Merger shall be deemed to have been taken for all purposes in the same order in which they are described in this Section 2.2 immediately following the consummation of the XERC Recapitalization.

 

(b)           Pursuant to the Certificates of Merger in the form attached hereto as Exhibit C-1 (the “Corporate Blocker Certificate of Merger”) and Exhibit C-2 (the “LLC Blocker Certificate of Merger” and, collectively with the Corporate Blocker Certificate of Mergers, the “Certificates of Merger”), each of which will be filed with the Delaware Secretary of State prior to the IPO Closing and following the Recapitalization Effective Time and effective as of the Blocker Merger Effective Time (as defined below), and in accordance with the DGCL and the DLLCA, as applicable, and the provisions of this Agreement, each Blocker will merge with and into PubCo, with PubCo being the surviving company (the “Blocker Merger Surviving Company”) of each of such merger (the “Blocker Merger”) and shall continue its corporate existence under the laws of the State of Delaware.

 

(c)          The name of the Blocker Merger Surviving Company shall be X-Energy, Inc. The Blocker Merger shall have the effects set forth in the DGCL, including Sections 259 and 264 of the DGCL, and Section 18-209 of the DLLCA, and the Blocker Merger Surviving Company shall possess all the rights, privileges, immunities, powers and franchises of each Blocker, and shall by operation of law become liable for all the debts, liabilities, obligations and duties of each Blocker to the same extent as if said debts, liabilities, obligations and duties had been incurred or contracted by PubCo, as provided in the DGCL and the DLLCA, as applicable.

 

(d)          The Blocker Merger shall become effective at the time designated in the applicable Blocker Certificate of Merger, which shall be on the same Business Day as the Effectiveness and following the XERC Recapitalization (the “Blocker Merger Effective Time”).

 

 

(e)           Blocker Merger Effect on Capital Stock and Interests. At the Blocker Merger Effective Time and pursuant to the Blocker Merger:

  

(i)        All of the limited liability company interests, shares or other equity interests, as applicable, of each Blocker (collectively, the “Blocker Equity Interests”) outstanding immediately prior to the Blocker Merger Effective Time shall, by virtue of the Blocker Merger and without any action on the part of any Party, be cancelled and, for each holder of the Blocker Equity Interests (each, a “Blocker Investor”), automatically converted into and thereafter represent the right to receive the number of validly issued, fully paid and non-assessable shares of Class A Common Stock of PubCo set forth next to such Blocker Investor’s name under the heading “Class A Common Stock of PubCo” on Schedule 1, which amount for the Blocker Investors of each Blocker shall, in the aggregate, be equal to the number of Common Units held by such Blocker immediately prior to the Blocker Merger.

 

(ii)        PubCo shall be admitted as a substitute member of XERC with respect to any Common Units transferred to PubCo pursuant to the Blocker Merger.

 

(f)           This Section 2.3, together with any related definitions and other provisions of this Agreement, constitutes an “agreement of merger” for purposes of each Blocker Certificate of Merger and applicable Law.

 

Section 2.4           Directors and Officers. From and after the Blocker Merger Effective Time, the directors of PubCo immediately prior to the Blocker Merger Effective Time shall be removed as directors of PubCo and the individuals set forth on Schedule 2 hereto shall be appointed as directors and shall continue to be the directors of the Blocker Merger Surviving Company. From and after the applicable Blocker Merger Effective Time, the officers of PubCo immediately prior to the Blocker Merger Effective Time shall be removed as officers of PubCo and the individuals set forth on Schedule 3 hereto shall be appointed as officers and shall continue to be the officers of the Blocker Merger Surviving Company.

 

Section 2.5            XERC Member Contributions and Subscriptions.

 

(a)            Former Equity Owner Contributions.

 

(i)        Contemporaneously with the Blocker Merger, each Former Equity Owner shall contribute, convey, transfer and deliver to PubCo all right, title and interest in and to all of the Common Units held by such Former Equity Owner as set forth opposite such Former Equity Owner’s name under the heading “Contributed Common Units” on Schedule 1, PubCo shall accept such contribution and in consideration therefor PubCo shall issue to each Former Equity Owner the number of newly issued shares of Class A Common Stock of PubCo set forth next to such Former Equity Owner’s name under the heading “Class A Common Stock of PubCo” on Schedule 1 (the “Former Equity Owner Contributions”). As a result of the Former Equity Owner Contributions, PubCo shall be admitted as a substitute member of XERC with respect to the contributed Common Units described in the preceding sentence, and immediately upon the admission of PubCo as a substitute member of XERC, each of the Former Equity Owners shall cease to be a member of XERC, and XERC shall continue without dissolution.

 

 

(b)            Management Holdings Contribution.

 

(i)        Contemporaneously with the Blocker Merger and the Former Equity Owner Contributions, Management Holdings shall contribute, convey, transfer and deliver to PubCo all right, title and interest in and to all of the Common Units held by Management Holdings as set forth Management Holding’s name under the heading “Contributed Common Units” on Schedule 1, PubCo shall accept such contribution and in consideration therefor PubCo shall issue to Management Holdings the number of newly issued shares of Class A Common Stock of PubCo set forth next to Management Holding’s name under the heading “Class A Common Stock of PubCo” on Schedule 1 (the “Management Holdings Contribution”). As a result of the Management Holdings Contributions, PubCo shall be admitted as a substitute member of XERC with respect to the contributed Common Units described in the preceding sentence, and immediately upon the admission of PubCo as a substitute member of XERC, Management Holdings shall cease to be a member of XERC and XERC shall continue without dissolution. Each share of Class A Common Stock of PubCo held by Management LLC will have the same provisions with respect to vesting, forfeiture and/or transfer restrictions that applied to the corresponding Common Unit contributed by Management LLC.

  

(c)            Continuing Equity Owner Contributions.

 

(i)        Contemporaneously with the Blocker Merger, the Former Equity Owner Contributions and the Management Holdings Contribution, each Continuing Equity Owner shall contribute, convey, transfer and deliver to PubCo all right, title and interest in and to all of the Common Units set forth opposite such Continuing Equity Owner’s name under the heading “Contributed Common Units” on Schedule 1, PubCo shall accept such contribution and in consideration therefor PubCo shall issue to each Continuing Equity Owner the number of newly issued shares of Class A Common Stock of PubCo equal to the number of Common Units set forth next to such Continuing Equity Owner’s name under the heading “Class A Common Stock of PubCo” on Schedule 1 (the “Continuing Equity Owner Contributions”), as set forth opposite such Continuing Equity Owner’s name on Schedule 1. As a result of the Continuing Equity Owner Contributions, PubCo shall be admitted as a substitute member of XERC with respect to the contributed Common Units described in the preceding sentence, and each of the Continuing Equity Owners shall continue as a member of XERC with respect to the Common Units that were not contributed by such Continuing Equity Owner pursuant to this Section 2.5(b)(i).

 

(ii)        Immediately following the transactions contemplated in Section 2.3, Section 2.5(a)(i) and Section 2.5(b)(i), PubCo shall issue and sell to each of the Continuing Equity Owners a number of shares of newly issued, non-economic Class B Common Stock of PubCo equal to the number of Common Units held by each such Continuing Equity Owner after giving effect to the Continuing Equity Owner Contribution and, for the avoidance of doubt, set forth opposite such Continuing Equity Owner’s name on Schedule 1, in consideration for such issuance, the Continuing Equity Owners shall each contribute to PubCo an amount equal to (i) $0.001 per share of Class B Common Stock of PubCo multiplied by (ii) the number of shares of Class B Common Stock of PubCo issued to such Continuing Equity Owner as set forth on Schedule 1 (such contribution and issuance, the “Class B Common Stock Subscription”), which Class B Common Stock Subscription amount and the number of Class B Common Stock issued is set forth opposite such Continuing Equity Owner’s name under the headings “Class B Common Stock of PubCo Subscription Price” and “Class B Common Stock of PubCo”, respectively on Schedule 1.

 

 

Section 2.6           Amendment and Restatement of Limited Liability Company Agreements. Following the Continuing Equity Owner Contributions and prior to the IPO Closing, each of the Continuing Equity Owners and PubCo hereby agree that the Seventh A&R LLC Agreement shall be amended and restated in the form of Eighth A&R LLCA of XERC attached hereto as Exhibit D, pursuant to which PubCo shall be named the “managing member” of XERC. Each Party that is listed as a signatory on the signature pages to the Eighth A&R LLCA of XERC shall adopt and join in such agreement and authorize any authorized officer of XERC to execute such agreement on its behalf.

  

Section 2.7           PubCo Contributions.

 

(a)           Immediately following the IPO Closing, PubCo shall use the net proceeds received by it in the Initial Public Offering (the “IPO Proceeds”) and the Class B Common Stock Subscription in accordance with the “Use of Proceeds” section of the Registration Statement (other than changes to amounts or that are incidental to the inclusion of a price range or the public offering price and size of the Initial Public Offering as set forth in the Final Prospectus), including to, among other things: (i) pay expenses associated with the Initial Public Offering; and (ii) contribute all of the remaining IPO Proceeds to XERC in exchange for the issuance by XERC to PubCo of a number of Common Units equal to the number of shares of Class A Common Stock issued and sold by PubCo to the Underwriters in connection with the IPO Closing.

 

(b)           If the Underwriters exercise the Underwriters’ Option, in whole or in part (whether at the IPO Closing or thereafter) to purchase additional shares of Class A Common Stock of PubCo for sale to the public in exchange for cash, following such exercise, PubCo shall contribute to XERC the net proceeds received by it pursuant to the exercise of the Underwriters’ Option in exchange for the issuance of a number of Common Units to PubCo equal to the number of shares of Class A Common Stock of PubCo issued and sold by the Underwriters in connection with the closing of such underwriters’ option. Immediately following such contribution, XERC shall retain all or a portion of such additional net proceeds for general company purposes, in each case in accordance with the “Use of Proceeds” section of the Registration Statement (and as may be updated in the Final Prospectus as a result of the final public offering price and size of the Initial Public Offering).

 

Section 2.8           [Management Holdings Liquidation. Following the expiration of the Lock-Up Period, Management Holdings shall hereby, and without any further action required by Management Holdings or any other party, distribute (i) all of the shares of Class A Common Stock issued to Management Holdings in the Management Holdings Contribution and (ii) any other assets held by Management Holdings (if any), in each case, to the Profits Interests Holders in complete liquidation of Management Holdings (the “Management Holdings Liquidation”). The Shares of Class A Common Stock distributed to each Profits Interests Holder pursuant to the Management Holdings Liquidation will have the same provisions with respect to vesting, forfeiture and/or transfer restrictions that applied to the Management Holdings Common Units held by such particular Profits Interests Holder. Following the Management Holdings Liquidation, Management Holdings and XERC shall take all actions necessary to effect the dissolution and winding up of Management Holdings in accordance with the Management Holdings LLCA and applicable law.]

 

 

Article III
INITIAL PUBLIC OFFERING AND RELATED MATTERS

 

Section 3.1           Underwriters Agreement. It is anticipated that prior to the transactions set forth in Article II of this Agreement, PubCo will enter into the Underwriting Agreement with the Underwriters; subject to the right of each party to elect to not enter into an Underwriting Agreement at it sole discretion.

 

Section 3.2           Tax Receivable Agreement. Effective immediately following the transactions described in Section 2.6, PubCo and each TRA Party shall enter into a Tax Receivable Agreement in the form attached to this Agreement as Exhibit E, pursuant to which the TRA Parties will receive certain rights pursuant thereto, as provided in Exhibit E.

 

Section 3.3           Registration Rights Agreement. Effective immediately following the transactions described in Article II, PubCo and certain Investors shall enter into a Registration Rights Agreement in the form attached to this Agreement as Exhibit F, pursuant to which the parties thereto will receive certain rights pursuant thereto, as provided in Exhibit F.

 

Article IV
REPRESENTATIONS AND WARRANTIES

 

Each Party hereby represents and warrants, solely with respect to itself, to the other Parties as follows:

 

Section 4.1           Organization. Such Party, other than individuals, is a corporation, limited partnership or limited liability company, as applicable, duly organized, validly existing and in good standing (where such concept exists) under the Laws of the jurisdiction of its organization, and has all requisite corporate, partnership or limited liability company, as applicable, power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as now being conducted, except where the failure to have such power, authority and governmental approvals would not have, individually or in the aggregate, a material adverse effect on such Party or on the consummation of the transactions contemplated hereby.

 

Section 4.2           Authority; Enforceability. Such Party has the requisite corporate, limited partnership, limited liability company or other power and authority, as applicable, to execute and deliver this Agreement and to perform its obligations under this Agreement. The execution, delivery and performance by such Party of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by its board of directors or other governing body, as applicable, and no other action is necessary to authorize the execution and delivery by it of this Agreement or the performance of its obligations under this Agreement. This Agreement has been duly executed and delivered by such Party, and, assuming due and valid authorization, execution and delivery under this Agreement by the other Parties hereto, this Agreement is a valid and binding obligation, enforceable against it in accordance with its terms.

 

 

Section 4.3            Consents and Approvals; No Violations. Subject to the receipt of any approvals required by the DGCL or the DLLCA, as applicable, none of the execution, delivery or performance of this Agreement by such Party, or compliance by it with any of the provisions of this Agreement, will (a) conflict with or result in any breach of any provision of the certificate of incorporation and by-laws, partnership agreement, limited liability company agreement, or similar organizational documents of such Party, as applicable, (b) require any filing with, or permit, authorization, consent or approval of, any Governmental Authority, or (c) violate any Law applicable to such Party or any of its properties or assets, excluding from the foregoing clauses (b) and (c) such filings, permits, authorizations, consents, violations, breaches, defaults, rights, obligations or encumbrances which would not, individually or in the aggregate, have a material adverse effect on such Party or on the consummation of the transactions contemplated hereby.

 

Section 4.4           Ownership of Interests. Each Party contributing, issuing, delivering, or exchanging interests hereby, owns all such interests free and clear of all liens, encumbrances, security interest, equities, charges or claims. There are no preferential rights to purchase, rights of first refusal or similar rights that are applicable to the contribution, issuance, delivery or exchange of such interests in connection with the transactions contemplated hereby which have not been waived by the Person holding such rights.

 

Section 4.5           Bankruptcy. There are no bankruptcy, reorganization, receivership or other insolvency type proceedings pending, being contemplated by or, to such Party’s knowledge, threatened against such Party.

 

Section 4.6          Litigation. No suit, action or litigation by any Person by or before any tribunal or Governmental Authority is pending or, to such Party’s knowledge, threatened against such Party or its affiliates that would, individually or in the aggregate, reasonably be expected to have a material adverse effect upon the ability of such Party to perform its obligations hereunder or consummate the transactions contemplated hereby.

 

Section 4.7           Independent Investigation. Each Party has reviewed with, or has had opportunity to consult with, their own independent legal and tax advisors regarding the transactions contemplated hereby, including the U.S. federal, state, local, foreign and other tax consequences of the transactions contemplated hereby and hereby acknowledges and agrees that none of PubCo, XERC or their advisors (including Latham & Watkins LLP) has provided to such Party any such legal or tax advice regarding the transactions contemplated hereby, none of PubCo or XERC are making any representation or warranty as to the U.S. federal, state, local, foreign and other tax consequences of the transactions contemplated hereby and each such Party will be responsible for such Person’s own tax liability that may arise as a result of the transactions contemplated hereby.

 

 

Section 4.8           Blocker Taxes.

 

Each Blocker hereby represents and warrants, solely with respect to itself, to PubCo as follows:

 

(a)           Such Blocker has filed all income and other material Tax Returns required to be filed by applicable Law, all such Tax Returns were prepared in compliance with applicable Law and are true, complete and accurate in all material respects, and such Blocker has paid all Taxes due and owing by the Blocker, other than errors, inaccuracies, omissions or instances of noncompliance arising from information provided or failed to be provided on a Schedule K-1 provided by XERC to such Blocker.

  

(b)           Such Blocker has not received a written claim that has not been resolved by a Governmental Authority in a jurisdiction where such Blocker does not file Tax Returns that it is or may be subject to Tax by that jurisdiction.

 

(c)           There are no claims, assessments, demands, actions, suits, proceedings, or audits with respect to Taxes asserted or now in progress, or, threatened in writing, against such Blocker.

 

(d)           Such Blocker has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax claim or assessment (other than automatically granted extensions to file Tax Returns).

 

(e)           Such Blocker has timely and properly withheld all Tax required to be withheld on payments by such Blocker to any other Person and has complied with all requirements under Law with respect to such withholding.

 

(f)           There are no currently existing or pending Tax liens with respect to such Blocker (other than liens for Taxes which are not yet delinquent).

 

(g)           Such Blocker is not a party to or bound by any Tax allocation or sharing agreement (other than commercial agreements entered into in the ordinary course of business the primary purpose of which does not relate to Taxes).

 

(h)           Such Blocker (i) has not been a member of an affiliated group filing a consolidated federal income Tax Return or any similar group for state, local or foreign income Tax purposes (other than a group the common parent of which was such Blocker), or (ii) has no liability for the Taxes of any Person (other than such Blocker) under Treasury Regulations Section 1.1502-6 (or any similar state, local or foreign Law), as a transferee or successor, or by contract.

 

(i)            Such Blocker has not constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code in the two years prior to the date of this Agreement or in a distribution which could otherwise constitute part of a “plan” or a “series of related transactions” (within the meaning of Section 355(e) of the Code).

 

(j)           Such Blocker is, and has been since formation, properly classified as a corporation for U.S. federal income tax purposes.

 

(k)           Since its respective formation date, such Blocker has not: (a) conducted or engaged in any business, operations, or activities other than directly or indirectly holding equity interests in XERC; (b) had, or engaged any, employees, consultants, or independent contractors; (c) owned, leased, or otherwise held any assets other than its direct or indirect ownership of equity interests in XERC, as applicable, and cash or cash equivalents held in accounts maintained solely for the purpose of paying de minimis administrative expenses incurred in the ordinary course of maintaining its existence; or (d) incurred, created, assumed, or guaranteed any indebtedness or other liabilities or obligations (whether accrued, absolute, contingent or otherwise), other than (i) liabilities for Taxes incurred with respect to its existence and its ownership of the XERC interests, or (ii) de minimis administrative expenses incurred in the ordinary course of maintaining its existence.

 

 

Article V
MISCELLANEOUS

 

Section 5.1           Intended Tax Treatment; Tax Elections.

 

(a)           The Parties acknowledge and agree that for U.S. federal (and applicable state and local) income tax purposes, the Parties intend that: (i) each Blocker Merger will be treated as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) the Former Equity Owner Contributions, Management Holdings Contribution, the Continuing Equity Owner Contribution, the contribution of cash to PubCo in the Initial Public Offering and, if applicable, the exercise of the Underwriters’ Option, together with the Blocker Merger, will be treated as contributions to PubCo that qualify under Section 351(a) of the Code (clauses (i) and (ii), collectively, the “Intended Tax Treatment”). The Parties will, and will cause each of their respective Affiliates to, prepare and file all tax returns in a manner consistent with the Intended Tax Treatment, and none of the Parties or their respective Affiliates will take any position with any Governmental Authority or otherwise that is inconsistent with the Intended Tax Treatment, except as required by applicable Law.

 

(b)          An election under Section 6226 of the Code (and any similar elections under state or local Law) shall be made for XERC with respect to any “imputed underpayment” or similar adjustment that relates to any taxable period (or portion thereof) ending on or prior to the date of the Restructuring or the IPO Closing, as applicable, and XERC (and its members) shall take such actions as are needed to effect the foregoing. In addition, any available election under Section 6226 of the Code (and any similar elections under state or local Law) shall be made for any subsidiaries of XERC with respect to any “imputed underpayment” or similar adjustment that relates to any taxable period (or portion thereof) ending on or prior to the date of the Restructuring or the IPO Closing, as applicable, and XERC (and its members) and any subsidiaries of XERC shall take such actions as are needed to effect the foregoing.

 

(c)           The Blocker Certificates of Merger and this Agreement, taken together, are intended to constitute, and the Parties hereby adopt the foregoing as, a “plan of reorganization” for purposes of Sections 354 and 361 of the Code and within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a).

 

Section 5.2           Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, valued added and similar taxes and fees incurred in connection with this Agreement and the documents to be delivered hereunder (“Transfer Taxes”) shall be borne and paid by XERC. XERC shall timely file any tax return with respect to Transfer Taxes (and the Parties shall cooperate with respect thereto as necessary).

 

 

Section 5.3           Withholding.

 

(a)           Each Investor hereto shall deliver a duly executed Internal Revenue Service Form W-9 of such Party to PubCo and XERC.

 

(b)           Each Party hereto, and their applicable affiliates or agents, will be permitted to deduct and withhold from any amounts paid pursuant to this Agreement any taxes required to be deducted or withheld therefrom under applicable Law. If any Person intends to deduct or withhold under this Section 5.3 any amounts payable pursuant to this Agreement, such Person will use commercially reasonable efforts to give the Person in respect of whom such deduction or withholding will be made at least five (5) Business Days’ prior written notice of such intention and will reasonably cooperate with such Person to reduce, mitigate or eliminate the potential deduction or withholding to the extent permitted under applicable Law, including through accepting any relevant forms, certificates or other documents. Any taxes so deducted or withheld will be timely paid by such Person to the applicable Governmental Authority, and to the extent such taxes are paid to the applicable Governmental Authority, will be treated for purposes of this Agreement as paid to the Person in respect of whom such deduction or withholding was made.

 

Section 5.4           Further Assurances. Each party hereto agrees to execute and deliver such instruments and evidences of payment and give such further assurances and perform such further acts as the other may reasonably request and as may reasonably be necessary in connection with the transactions contemplated by this Agreement.

 

Section 5.5           Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of Delaware applicable to agreements made and to be performed entirely within such State, without reference to conflict of law rules of that or any other jurisdiction. All Legal Proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in the Delaware state courts or federal courts of the United States of America sitting in the State of Delaware and any appellate court from any such court (as applicable, the “Chosen Courts”). Consistent with the preceding sentence, the Parties hereby (i) submit to the exclusive jurisdiction of the Chosen Courts for the purpose of any Legal Proceeding arising out of or relating to this Agreement brought by any Party and (ii) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such Legal Proceeding, any claim that it is not subject personally to the jurisdiction of the Chosen Courts, that its property is exempt or immune from attachment or execution, that such Legal Proceeding is brought in an inconvenient forum, that the venue of such Legal Proceeding is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any of the Chosen Courts. Notwithstanding the foregoing, the judgment against a Party in any Legal Proceeding contemplated above may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and amount of such judgment. EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTION CONTEMPLATED HEREBY. EACH OF THE PARTIES HEREBY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY LEGAL PROCEEDING IN CONNECTION WITH THIS AGREEMENT, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.5.

 

 

Section 5.6           Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by electronic mail or other electronic delivery (including, for the avoidance of doubt, by.PDF, DocuSign, email or other electronic transmission) will be treated in all manner and respects as an original agreement or instrument and will be considered to have the same binding legal effect as if it were the original signed version of such agreement delivered in person.

 

Section 5.7           Successors and Assigns; No Third Party Rights. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. This Agreement is not intended to, and does not, create rights in any other Person, and no Person is or is intended to be a third-party beneficiary of any of the provisions of this Agreement.

 

Section 5.8           Severability. If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the Laws of any political body having jurisdiction over the subject matter of this Agreement, such contravention or invalidity will not invalidate the entire Agreement. Instead, this Agreement will be construed as if it did not contain the particular provision or provisions held to be invalid, and an equitable adjustment will be made and necessary provision added so as to give effect to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

 

Section 5.9           Waivers and Amendments. Any waiver of any term or condition of this Agreement, or any amendment or supplement to this Agreement, will be effective only if in writing and signed by the Parties. A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement will not in any way affect, limit or waive a Party’s rights under this Agreement at any time to enforce strict compliance thereafter with every term or condition of this Agreement.

 

Section 5.10         Entire Agreement; Survival. This Agreement, together with the agreements and other documents referenced in this Agreement, constitutes the entire agreement among the Parties pertaining to the transactions contemplated hereby and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties pertaining thereto. The provisions of this Agreement (including the representations and warranties under this Agreement) shall survive the IPO Closing, and shall continue indefinitely.

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

  

	PUBCO
	X-ENERGY, INC.
	By:	[Name]
		Name:
		Title:
	XERC
	X-ENERGY REACTOR COMPANY, LLC
	By:	[Name]
		Name:
		Title:

 

  

	BLOCKERS
	XENON REACTOR COMPANY HOLDCO LLC
	By:	[Name]
		Name:
		Title:
	SAO BLOCKER, INC.
	By:	[Name]
		Name:
		Title:
	BE TECH VENTURES, INC.
	By:	[Name]
		Name:
		Title:
	BURRA HOLDINGS, L.L.C.
	By:	[Name]
		Name:
		Title:
	MULL HOLDINGS, L.L.C.
	By:	[Name]
		Name:
		Title:
	GIE FUND I X-ENERGY HOLDCO, LLC
	By:	[Name]
		Name:
		Title:

 

 

	72 X-ENERGY BLOCKER, LLC
	By:	[Name]
		Name:
		Title:
	VALORINA LLC
	By:	[Name]
		Name:
		Title:

 

 

	MANAGEMENT HOLDINGS
	X-ENERGY MANAGEMENT, LLC
	By:	[Name]
		Name:
		Title:

 

 

	OTHER INVESTORS
	[ · ]
	By:	[Name]
		Name:
		Title:

 

 

Schedule 1

 

Investors

 

#	Investor	Common Units held following XERC Recapitalization	Contributed Common Units	Class A Common Stock of PubCo	Class B Common Stock of PubCo Subscription Price	Class B Common Stock of PubCo
Blockers
1.	Xenon Reactor Company Holdco LLC	[ · ]	-	-	-	-
2.	SAO Blocker, Inc.	[ · ]	-	-	-	-
3.	BE Tech Ventures, Inc.	[ · ]	-	-	-	-
4.	Burra Holdings, L.L.C	[ · ]	-	-	-	-
5.	Mull Holdings, L.L.C.	[ · ]	-	-	-	-
6.	GIE Fund I X-Energy Holdco, LLC	[ · ]	-	-	-	-
7.	72 X-Energy Blocker, LLC	[ · ]	-	-	-	-
8.	Valorina LLC	[ · ]	-	-	-	-
9.	Xenon Reactor Company Holdco LLC	[ · ]	-	-	-	-
Blocker Investors
10.	[OTPP Blocker Investor[s]]	-	-	[ · ]	-	-
11.	[Accrete Blocker Investor[s]]	-	-	[ · ]	-	-
12.	[BapCo Blocker Investor[s]]	-	-	[ · ]	-	-
13.	[DE Shaw Blocker Investor[s]]	-	-	[ · ]	-	-
14.	[Galvanize Blocker Investor[s]]	-	-	[ · ]	-	-
15.	[Point 72 Blocker Investor[s]]	-	-	[ · ]	-	-
16.	[Soros Blocker Investor[s]]	-	-	[ · ]	-	-
17.	[OTPP Blocker Investor[s]]	-	-	[ · ]	-	-
18.	[Accrete Blocker Investor[s]]	-	-	[ · ]	-	-
Continuing Equity Owners
19.	Kamal Ghaffarian Revocable Trust	[ · ]	[ · ]	[ · ]	[ · ]	[ · ]
20.	IBX Opportunity GP, Inc.	[ · ]	[ · ]	[ · ]	[ · ]	[ · ]
21.	Ares X-Energy Holdings LP	[ · ]	[ · ]	[ · ]	[ · ]	[ · ]
22.	GM Enterprises, LLC	[ · ]	[ · ]	[ · ]	[ · ]	[ · ]
23.	Ares X-Energy Co-Invest LP	[ · ]	[ · ]	[ · ]	[ · ]	[ · ]
24.	ACIP Investments Pooling LLC - Series 31, and	[ · ]	[ · ]	[ · ]	[ · ]	[ · ]
25.	Jane Street Global Trading, LLC	[ · ]	[ · ]	[ · ]	[ · ]	[ · ]
26.	Kamal Ghaffarian Revocable Trust	[ · ]	[ · ]	[ · ]	[ · ]	[ · ]
Management Holdings
27.	X-Energy Management, LLC	[ · ]	[ · ]	[ · ]	-	-
Former Equity Owners
28.	[ · ]	[ · ]	[ · ]	[ · ]	-	-
29.	[ · ]	[ · ]	[ · ]	[ · ]	-	-

 

 

Schedule 2

 

PubCo Board of Directors

 

1.

Kamal Ghaffarian (Chairman)

 

2.

J. Clay Sell

 

3.

Edward Sonnenschein

 

4.

Michael J. Wallace

 

5.

Kathleen W. Hyle

 

6.

Christopher F. Ginther

 

7.

Gregory J. Goff

 

8.

David B. Kaplan

 

9.

Allyson Satin

 

 

Schedule 3

 

PubCo Officers

 

1.

J. Clay Sell, Chief Executive Officer

 

2.

Daniel Gross, Executive Vice President and Chief Financial Officer

 

3.

Dragan Popovic, Executive Vice President and Chief of Global Operations

 

 

Exhibit A

 

A&R Certificate of Incorporation of PubCo

  

 

Exhibit B

 

A&R Bylaws of PubCo

 

 

Exhibit C-1

 

Corporate Certificate of Merger

 

 

Exhibit C-2

 

LLC Certificate of Merger

 

 

Exhibit D

 

Eighth A&R LLCA of XERC

 

 

Exhibit E

 

Tax Receivable Agreement

 

 

Exhibit F

 

Registration Rights Agreement

 

 

Exhibit 10.13

 

 

TAX RECEIVABLE AGREEMENT

 

by and among

 

X-ENERGY, INC.

 

X-ENERGY REACTOR COMPANY, LLC

 

THE TRA PARTIES

 

and

 

OTHER PERSONS FROM TIME TO TIME PARTY HERETO

 

Dated as of [ · ], 2026  

 

 

 

TABLE OF CONTENTS

 

		Page
ARTICLE I Definitions		2
Section 1.1.	Definitions	2
Section 1.2.	Rules of Construction	12
ARTICLE II Determination of Realized Tax Benefit		14
Section 2.1.	Basis Adjustments; XERC 754 Election	14
Section 2.2.	Attribute Schedules	14
Section 2.3.	Tax Benefit Schedules	15
Section 2.4.	Procedures; Amendments	15
ARTICLE III Tax Benefit Payments		16
Section 3.1.	Timing and Amount of Tax Benefit Payments	16
Section 3.2.	No Duplicative Payments	19
Section 3.3.	Pro-Ration of Payments as Between the TRA Parties	19
Section 3.4.	Overpayments	20
ARTICLE IV Termination		21
Section 4.1.	Early Termination of Agreement; Acceleration Events	21
Section 4.2.	Early Termination Notice	22
Section 4.3.	Payment upon Early Termination	22
ARTICLE V Subordination and Late Payments		23
Section 5.1.	Subordination	23
Section 5.2.	Late Payments by the Corporation	23
ARTICLE VI Tax Matters; Consistency; Cooperation		24
Section 6.1.	Participation in the Corporation’s and XERC’s Tax Matters	24
Section 6.2.	Consistency	24
Section 6.3.	Cooperation	25
ARTICLE VII Miscellaneous		25
Section 7.1.	Notices	25
Section 7.2.	Counterparts	26
Section 7.3.	Entire Agreement; No Third-Party Beneficiaries	26
Section 7.4.	Severability	26
Section 7.5.	Assignments; Amendments; Successors; No Waiver	27
Section 7.6.	Titles and Subtitles	27
Section 7.7.	Resolution of Disputes; Governing Law	28
Section 7.8.	Reconciliation Procedures	30
Section 7.9.	Withholding	30
Section 7.10.	Admission of the Corporation into a Consolidated Group; Transfers of Corporate Assets	31
Section 7.11.	Confidentiality	32
Section 7.12.	Change in Law	32
Section 7.13.	Interest Rate Limitation	32
Section 7.14.	Independent Nature of Rights and Obligations	33
Section 7.15.	Tax Characterization	33

 

 

Exhibits

 

Exhibit A	-	List of Exchange TRA Parties
Exhibit B	-	List of Blocker Shareholders
Exhibit C	-	Form of Joinder Agreement

 

 

TAX RECEIVABLE AGREEMENT

 

This TAX RECEIVABLE AGREEMENT (this “Agreement”), dated as of [·], is hereby entered into by and among X-energy, Inc., a Delaware corporation (the “Corporation”), X-energy Reactor Company, LLC, a Delaware limited liability company (“XERC”), and each of the TRA Parties that are from time to time a party hereto.

 

RECITALS

 

WHEREAS, XERC is treated as a partnership for U.S. federal income tax purposes;

 

WHEREAS, XERC entered into the Operating Agreement (defined below) wherein XERC recapitalized all existing ownership interests in XERC into membership interests in the form of Common Units (as defined in Operating Agreement) (the “Recapitalization”);

 

WHEREAS, following the Recapitalization and immediately prior to the consummation of Common Unit Contribution, each of the Exchange TRA Parties held Common Units and, as of the date hereof, continues to hold (or prior to an Exchange will hold) a portion of such Common Units;

 

WHEREAS, [·] and [·], (each a “Blocker Company” and collectively, the “Blocker Companies”) are taxable as corporations for U.S. federal income tax purposes;

 

WHEREAS, as a result of certain reorganization transactions undertaken in connection with the IPO of the Corporation, (i) each Blocker Company will merge with and into the Corporation or a subsidiary of the Corporation (each, a “Merger”), and as a result of such Merger the Corporation will be entitled to utilize certain Blocker Tax Attributes attributable to such Blocker Company and (ii) and certain of the Common Units held by the Exchange TRA Parties were acquired by the Corporation from the Exchange TRA Parties in a transaction intended to qualify as a tax-free contribution under Section 351(a) of the Code (the “Common Unit Contributions”);

 

WHEREAS, on the date hereof, the Corporation issued shares of its Class A Common Stock in an initial public offering of its Class A Common Stock (the “IPO”);

 

WHEREAS, immediately following the consummation of the IPO, the Corporation acquired newly issued Common Units from XERC using the net proceeds from the IPO (the “Unit Purchase”) and became the managing member of XERC and XERC and the Corporation effectuated certain other transactions to combine the businesses of XERC and the Corporation;

 

WHEREAS, following the IPO, the Operating Agreement provides each Exchange TRA Party a redemption right pursuant to which each Exchange TRA Party may cause XERC to redeem all or a portion of its Common Units from time to time for shares of Class A Common Stock or, under certain circumstances, at the Corporation’s option, cash (a “Redemption”), subject to the Corporation’s right, in its sole discretion, to elect to effect a direct exchange of cash or shares of Class A Common Stock for such Common Units between the Corporation and the applicable Exchange TRA Party in lieu of such a Redemption (a “Direct Exchange”), and as a result of any such Redemption or Direct Exchange the Corporation may be entitled to utilize (or otherwise be entitled to the benefits arising out of) the Covered Tax Assets;

 

 

WHEREAS, XERC and each of its subsidiaries that is treated as a partnership for U.S. federal income tax purposes will have in effect an election under Section 754 of the Code for the Taxable Year in which any Exchange occurs, which election will cause any such Exchange to result in an adjustment to the Corporation’s proportionate share of the tax basis of the assets owned by XERC and such subsidiaries pursuant to Section 743(b) and Section 734(b) of the Code; and

 

WHEREAS, the Parties to this Agreement desire to provide for certain payments and make certain arrangements with respect to any tax benefits to be derived by the Corporation as the result of Covered Tax Assets and the making of payments under this Agreement.

 

NOW, THEREFORE, the Parties agree as follows:

 

ARTICLE I

 

Definitions

 

Section 1.1.      Definitions. As used in this Agreement, the terms set forth in this Article I shall have the following meanings (such meanings to be equally applicable to (i) the singular and plural, (ii) the active and passive and (iii) for defined terms that are nouns, the verified forms of the terms defined).

 

“Actual Tax Liability” means, with respect to any Taxable Year, the liability for Covered Taxes of the Corporation (a) appearing on Tax Returns of the Corporation for such Taxable Year or (b) if applicable, determined in accordance with a Determination; provided, that for purposes of determining Actual Tax Liability, the Corporation shall use the Assumed State and Local Tax Rate for purposes of determining liabilities for all state and local Covered Taxes (including, for the avoidance of doubt, the U.S. federal income tax benefit realized by the Corporation with respect to such state and local Covered Taxes).

 

“Advisory Firm” means an accounting firm that is nationally recognized as being expert in Covered Tax matters selected by the Corporation.

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person. With respect to each TRA Party, each of the following shall be deemed an “Affiliate”: (a) a trust, family limited partnership or similar estate planning vehicle, under which the distribution of an interest in this Agreement may be made only to beneficiaries who are such TRA Party, such TRA Party’s current or former spouse, siblings, parents, or spouse’s or former spouse’s parents or siblings or lineal descendants (whether natural or adopted) of the TRA Party, such TRA Party’s current or former spouse, siblings, parents or current or former spouse’s parents or siblings and any charitable foundation of such TRA Party; (b) a charitable remainder trust, the income of which shall be paid to such TRA Party during such TRA Party’s life; and (c) such TRA Party’s current or former spouse, siblings, parents, or current or former spouse’s parents or siblings or lineal descendants (whether natural or adopted) of the TRA Party, such TRA Party’s current or former spouse, siblings, parents or current or former spouse’s siblings or parents and any charitable foundation or other charitable donee of such TRA Party.

 

 

“Agreed Rate” means a per annum rate of SOFR plus 100 basis points.

 

“Agreement” is defined in the preamble.

 

“Amended Schedule” is defined in Section 2.4(b).

 

“Amount Realized” means, with respect to any Exchange that is not eligible for nonrecognition treatment (as determined for U.S. federal income tax purposes), at any time, the sum of (i) the Market Value of the shares of Class A Common Stock or the amount of cash (as applicable) transferred to a TRA Party pursuant to such Exchange, (ii) the amount of payments made pursuant to this Agreement with respect to such Exchange (but excluding any portions thereof attributable to Imputed Interest) and (iii) the amount of liabilities of the XERC Group allocated to the Common Units acquired pursuant to the Exchange under Section 752 of the Code.

 

“Assumed State and Local Tax Rate” means the tax rate equal to the sum of the products of (i) the Corporation’s income and franchise tax apportionment factor for each state and local jurisdiction in which the Corporation or XERC (to the extent the Corporation is includible on XERC’s Tax Return) files income or franchise Tax Returns for the relevant Taxable Year, in each case, as shown on the relevant Tax Return filed by the Corporation or XERC and (ii) the highest corporate income and franchise tax rate(s) for each such state and local jurisdiction in which the Corporation or XERC files income or franchise Tax Returns for each relevant Taxable Year.

 

“Attributable” is defined in Section 3.1(b)(i).

 

“Attribute Schedule” is defined in Section 2.2.

 

“Audit Committee” means the audit committee of the Board.

 

“Basis Adjustment” is defined in Section 2.1(a).

 

“Blocker Company” is defined in the recitals.

 

“Blocker Shareholders” means the entities identified as Blocker Shareholders on Exhibit B and their Permitted Transferees.

 

“Blocker Tax Attributes” means (i) the Blocker Transferred Basis and (ii) net operating losses (and carryforwards thereof), capital losses (and carryforwards thereof), disallowed interest expense carryforwards under Section 163(j) of the Code and credit carryforwards of the Blocker Companies relating to taxable periods ending on or prior to the IPO (such taxable periods, the “Pre-IPO Tax Period” and such attributes, the “Pre-IPO NOLs”). Notwithstanding the foregoing, the term “Pre-IPO NOL” shall not include any Tax attribute of a Blocker Company that is used to offset Taxes of such Blocker Company, if such offset Taxes are attributable to taxable periods (or portion thereof) ending on or prior to the date of the Merger.

 

 

“Blocker Transferred Basis” means the share of Tax basis (including under Sections 734(b), 743(b) and 754 of the Code and Section 1.743-l(h) of the Treasury Regulations and, in each case, the comparable sections of U.S. state and local tax law) of the Reference Assets that is amortizable under Section 197 of the Code or that is otherwise amortizable or depreciable for U.S. federal income tax purposes, in each case, attributable to the Common Units acquired by the Corporation from the Blocker Companies in the Mergers; provided, that for the avoidance of doubt, Blocker Transferred Basis shall not include any Existing Basis, Basis Adjustments or any Exchange Existing Basis.

 

“Board” means the Board of Directors of the Corporation.

 

“Business Day” means any day other than a Saturday or a Sunday or a day on which banks located in New York City, New York generally are authorized or required by Law to close.

 

“Change of Control” shall have the meaning ascribed to such term in the Operating Agreement.

 

“Class A Common Stock” means the Class A common stock, par value $0.0001 per share, of the Corporation.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

 

“Common Unit Contribution” is defined in the Recitals.

 

“Common Units” shall have the meaning ascribed to such term in the Operating Agreement.

 

“Consent Requirement” is defined in Section 7.5(a).

 

“Control” means the direct or indirect possession of the power to direct or cause the direction of the management or policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

“Corporation” is defined in the preamble to this Agreement.

 

“Covered Tax Assets” means (i) Existing Basis, (ii) Exchange Existing Basis; (iii) Basis Adjustments (iv) Blocker Tax Attributes and (v) Imputed Interest. The determination of Exchange Existing Basis or Blocker Transferred Basis that is allocable to Common Units being exchanged by the TRA Party (and payments made hereunder with respect to such tax basis) or attributable to a Blocker Company shall be determined in good faith by the Corporation in consultation with the Advisory Firm; provided, that in no event will the Exchange Existing Basis, Existing Basis or Blocker Transferred Basis exceed one hundred percent (100%) of the existing tax basis in the Reference Assets that are Covered Tax Assets and allocable to the Corporation at any time. For the avoidance of doubt, Covered Tax Assets shall include any carryforwards, carrybacks or similar attributes that are attributable to the tax items described in clauses (i) through (iv).

 

 

“Covered Taxes” means any U.S. federal, state and local taxes, assessments or similar charges that are based on or measured with respect to net income or profits and any interest imposed in respect thereof under applicable Law.

 

“Cumulative Net Realized Tax Benefit” is defined in Section 3.1(b)(iii).

 

“Default Rate” means a per annum rate of SOFR plus 500 basis points.

 

“Default Rate Interest” is defined in Section 5.2.

 

“Determination” shall have the meaning ascribed to such term in Section 1313(a) of the Code or any similar provisions of state or local tax Law, as applicable, or any other event (including the execution of IRS Form 870-AD) that finally and conclusively establishes the amount of any liability for tax.

 

“Direct Exchange” is defined in the recitals to this Agreement.

 

“Dispute” is defined in Section 7.7(a).

 

“Early Termination Effective Date” means (i) with respect to an early termination pursuant to Section 4.1(a), the date an Early Termination Notice is delivered and (ii) with respect to an early termination pursuant to Section 4.1(c), the date of the applicable Material Breach.

 

“Early Termination Notice” is defined in Section 4.2(a).

 

“Early Termination Payment” is defined in Section 4.3(b).

 

“Early Termination Reference Date” is defined in Section 4.2(b).

 

“Early Termination Schedule” is defined in Section 4.2(b).

 

“Exchange” means any Direct Exchange, any Redemption or any other transfer (as determined for U.S. federal income tax purposes) of Common Units to the Corporation from a TRA Party, but excluding the Common Unit Contribution.

 

“Exchange Existing Basis” means (i) the existing tax basis of the Reference Assets that are depreciable or amortizable (including assets that will eventually be subject to depreciation or amortization, once placed in service) for U.S. federal income tax purposes or stock of a corporation or land, in each case, attributable to the Common Units transferred upon (A) an Exchange, determined as of immediately prior to the time of such Exchange or (B) the Common Unit Contribution, determined as of immediately prior to the Common Unit Contribution and (ii) any increase or decrease (if any) to such tax basis referred to in clause (i) under Section 743(b) of the Code; provided, that for the avoidance of doubt, Exchange Existing Basis shall not include any Existing Basis, Basis Adjustments or any Blocker Transferred Basis.

 

 

“Exchange TRA Parties” means each of the Persons (other than Blocker Shareholders and the Corporation) listed on Exhibit A as a party hereto as of the date hereof and their Permitted Transferees.

 

“Existing Basis” means the Corporation’s proportionate share of the XERC Group’s tax basis in the Reference Assets (other than the Blocker Transferred Basis) held by the XERC Group at the time of the IPO that are amortizable under Section 197 of the Code and reported as amortizable on IRS Form 4562 for U.S. Federal income tax purposes (without taking into account Section 704(c) of the Code) corresponding to (A) Common Units acquired by the Corporation in the Unit Purchase at the time of the IPO or (B) any Common Units acquired by the Corporation after the IPO (other than any Common Units acquired (or deemed acquired) by the Corporation in connection with a Redemption, Direct Exchange or other transaction treated as a direct purchase of Common Units by the Corporation from a Member pursuant to Section 707(a)(2)(B) of the Code) (such acquisition of Units, a “Subsequent Capital Contribution”).

 

“Expert” is defined in Section 7.8(a).

 

“Final Payment Date” means, with respect to any Payment required to be made pursuant to this Agreement, the last date on which such payment may be made within the applicable time period prescribed for such payment under this Agreement. The Final Payment Date in respect of (i) a Tax Benefit Payment is determined pursuant to Section 3.1(a) and (ii) an Early Termination Payment is determined pursuant to Section 4.3(a).

 

“Hypothetical Tax Liability” means, with respect to any Taxable Year, the hypothetical liability of the Corporation that would arise in respect of Covered Taxes, using the same methods, elections, conventions and similar practices used in computing the Actual Tax Liability; provided, that for purposes of determining the Hypothetical Tax Liability, (i) the combined tax rate for U.S. state and local Covered Taxes shall be the Assumed State and Local Tax Rate (including, for the avoidance of doubt, for the purpose of calculating the U.S. federal income tax benefit realized by the Corporation with respect to such state and local Covered Taxes), (ii) the Corporation shall use the Non-Existing Basis, Non-Exchange Existing Basis, the Non-Adjusted Basis and Non-Blocker Transferred Basis and, without duplication, exclude any Blocker Tax Attributes, (iii) the Corporation shall not take into account any Imputed Interest and (iv) the Corporation shall be entitled to make reasonable simplifying assumptions in making any determinations contemplated by this definition.

 

“Imputed Interest” means any interest imputed under Section 483, 1272 or 1274 of the Code or any similar provisions of state or local tax Law with respect to the Corporation’s payment obligations under this Agreement.

 

“Independent Directors” means the members of the Board who (a) are “independent” under the standards of the principal U.S. securities exchange on which the Class A Common Stock is traded or quoted, (b) are not officers, directors, employees, equityholders, partners, managers, members, or Affiliates of, and do not have any material direct or indirect financial interest in, any TRA Party or any Affiliate of any TRA Party, and (c) do not have any pecuniary or financial interest in the outcome of any decision or determination to be made by the Independent Directors under this Agreement that is materially different from the interests of the holders of Class A Common Stock generally; provided that no Person shall fail to be an Independent Director solely by reason of (i) being a director, officer, employee, equityholder, partner, member, or manager of the Corporation or any of its Subsidiaries, (ii) having equity interests in the Corporation or XERC, or (iii) being entitled to receive any payment under this Agreement unless such entitlement would reasonably be expected to result in such Person having a pecuniary or financial interest in any such decision or determination that is materially different from the interests of the holders of Class A Common Stock generally.

 

 

“Initial TRA Representative” means X-Energy Holding, LLC, a Delaware limited liability company, together with its Affiliates and their respective successors and assigns.

 

“Interest Amount” is defined in Section 3.1(b)(vi).

 

“IPO” is defined in the recitals to this Agreement.

 

“IRS” means the U.S. Internal Revenue Service.

 

“Joinder” means a joinder to this Agreement, in form and substance substantially similar to Exhibit C to this Agreement.

 

“Joinder Requirement” is defined in Section 7.5(a).

 

“Law” means all laws, statutes, ordinances, rules and regulations of the U.S., any foreign country and each state, commonwealth, city, county, municipality, regulatory or self-regulatory body, agency or other political subdivision thereof.

 

“Market Value” means (i) with respect to an Exchange (other than a deemed Exchange described in clause (ii) below), the value of the Class A Common Stock on the applicable Exchange date used by the Corporation in its U.S. federal income tax reporting with respect to such Exchange, and (ii) with respect to a deemed Exchange pursuant to Valuation Assumption, (a) if the Class A Common Stock trades on a securities exchange or automated or electronic quotation system, the arithmetic average of the high trading price on such date (or if such date is not a Trading Day, the immediately preceding Trading Day) and the low trading price on such date (or if such date is not a Trading Day, the immediately preceding Trading Day) or (b) if the Class A Common Stock no longer trades on a securities exchange or automated or electronic quotation system, the fair market value of one share of Class A Common Stock, as determined by the Corporation in good faith, that would be obtained in an arms’ length free market transaction for cash between an informed and willing buyer and an informed and willing seller, neither of whom is under any undue pressure or compulsion to buy or sell, and without regard to the particular circumstances of the buyer or seller and without any discounts for liquidity or minority discount.

 

“Material Breach” means (i) subject to the exceptions set forth in this Agreement (including Section 4.1(c) and Section 5.1), the Corporation’s failure to make a Payment (along with any applicable interest) within ninety (90) calendar days of the applicable Final Payment Date, (ii) an intentional material breach by the Corporation of a material obligation under this Agreement or (iii) the rejection of this Agreement by operation of law in a case commenced in bankruptcy or otherwise.

 

 

“Mergers” is defined in the recitals to this Agreement.

 

“Net Tax Benefit” is defined in Section 3.1(b)(ii).

 

“Non-Adjusted Basis” means, with respect to any Reference Assets which are depreciable or amortizable (including assets that will eventually be subject to depreciation or amortization, once placed in service) for U.S. federal income tax purposes or stock of a corporation or land, attributable to Common Units received in an Exchange determined at the time of the Exchange, the tax basis that such asset would have had at such time if no Basis Adjustments had been made.

 

“Non-Blocker Transferred Basis” means, with respect to any Reference Asset that has Blocker Transferred Basis at the time of the Mergers, the Tax basis that such Reference Asset would have had if the Blocker Transferred Basis at the time of the Mergers was equal to zero.

 

“Non-Exchange Existing Basis” means, with respect to any Reference Assets which are depreciable or amortizable (including assets that will eventually be subject to depreciation or amortization, once placed in service) for U.S. federal income tax purposes or stock of a corporation or land, attributable to Common Units received in an Exchange or the Common Unit Contribution, determined at the time of the Exchange or the Common Unit Contribution, the tax basis that such Reference Assets would have had if the Exchange Existing Basis was equal to zero.

 

“Non-Existing Basis” means, with respect to any Reference Asset at the time of the IPO that is amortizable under Section 197 of the Code and reported as amortizable on IRS Form 4562 for U.S. federal income tax purposes, the tax basis that such Reference Asset would have had if the Existing Basis at the time of the IPO (or, in the case of any adjustments as a result of the Unit Purchase and the entry into this Agreement, at the time of the Unit Purchase) or a Subsequent Capital Contribution, as applicable was equal to zero.

 

“Objection Notice” is defined in Section 2.4(a)(ii).

 

“Operating Agreement” means that certain [Eighth] Amended and Restated Limited Liability Company Agreement of XERC, dated as of the date hereof, as such agreement may be further amended, restated, supplemented or otherwise modified from time to time.

 

“Other TRA” means any other tax receivable agreement or any other agreement that is substantially similar in nature to a tax receivable agreement to which the Corporation or any of its Subsidiaries is a party. For the avoidance of doubt, the effect of any Other TRA shall not be taken into account in respect of any calculations made hereunder.

 

“Parties” means the parties named on the signature pages to this Agreement and each additional party that satisfies the Joinder Requirements, in each case with their respective successors and assigns.

 

 

“Payment” means any Tax Benefit Payment or Early Termination Payment and in each case, unless otherwise specified, refers to the entire amount of such Payment or any portion thereof.

 

“Permitted Transferee” means a holder of Common Units pursuant to any transfer of such Common Units permitted by the Operating Agreement.

 

“Person” means an individual, corporation, company, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision of any government, or an agency or instrumentality of any government.

 

“Pre-Exchange Transfer” means any transfer (or deemed transfer) of one or more Common Units (i) that occurs prior to an Exchange of such Common Units or the Common Unit Contribution and (ii) to which Section 743(b) of the Code applies.

 

“Realized Tax Benefit” is defined in Section 3.1(b)(iv).

 

“Realized Tax Detriment” is defined in Section 3.1(b)(v).

 

“Recapitalization” is defined in the recitals to this Agreement.

 

“Reconciliation Dispute” is defined in Section 7.8(a).

 

“Reconciliation Procedures” is defined in Section 7.8(a).

 

“Redemption” is defined in the recitals to this Agreement.

 

“Reference Assets” means any asset of any member of the XERC Group on the relevant date of determination under this Agreement (including at the time of an Exchange). A Reference Asset also includes any asset the tax basis of which is determined, in whole or in part, by reference to the tax basis of an asset that is described in the preceding sentence, including “substituted basis property” within the meaning of Section 7701(a)(42) of the Code.

 

“Schedule” means any of the following: (i) an Attribute Schedule; (ii) a Tax Benefit Schedule; (iii) an Early Termination Schedule; and (iv) any Amended Schedule.

 

“Senior Obligations” is defined in Section 5.1.

 

“SOFR” means, with respect to any period, the Secured Overnight Financing Rate, as reported by the Wall Street Journal two (2) Business Days prior to the commencement of such period.

 

“Subordination Rate” means a per annum rate of [__].

 

“Subsidiary” means, with respect to any Person and as of any determination date, any other Person as to which such first Person (i) owns, directly or indirectly, or otherwise controls, more than 50% of the voting power or other similar interests of such other Person or (ii) is the sole general partner interest, or managing member or similar interest, of such other Person.

 

 

“Subsidiary Stock” means any stock or other equity interest in any Subsidiary of the Corporation that is treated as a corporation for U.S. federal income tax purposes.

 

“Tax Benefit Payment” is defined in Section 3.1(b).

 

“Tax Benefit Schedule” is defined in Section 2.3(a).

 

“Tax Return” means any return, declaration, report or similar statement filed or required to be filed with respect to taxes (including any attached schedules), including any information return, claim for refund, amended return and declaration of estimated tax.

 

“Taxable Year” means a taxable year of the Corporation as defined in Section 441(b) of the Code or any similar provisions of U.S. state or local tax Law, as applicable (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is filed), ending on or after the closing date of the IPO.

 

“Taxing Authority” means any federal, state, county, municipal or local government, or any subdivision, agency, commission or authority thereof, or any quasi-governmental body, or any other authority of any kind, exercising regulatory or other authority in relation to tax matters.

 

“Trading Day” means any day on which shares of Class A Common Stock are actually traded on the principal securities exchange or securities market on which shares of Class A Common Stock are then traded.

 

“TRA Parties” means the Exchange TRA Parties, the Blocker Shareholders and their Permitted Transferees.

 

“TRA Representative Approval” means written approval by the TRA Representative.

 

“TRA Payment Obligations” is defined in Section 5.1.

 

“TRA Representative” means the Initial TRA Representative; provided, however, that if the Initial TRA Representative does not continue to hold any rights to receive payments under this Agreement, then such TRA Party that holds such TRA rights at such time and holds the majority of Common Units subject to this Agreement (the number of Common Units subject to this Agreement shall be determined at such time) shall be the TRA Representative.

 

“Treasury Regulations” means the final, temporary and (to the extent they can be relied upon) proposed regulations under the Code, as promulgated from time to time.

 

“U.S.” means the United States of America.

 

 

“Units” shall have the meaning ascribed to such term in the Operating Agreement.

 

“Unit Purchase” is defined in the recitals to this Agreement.

 

“Valuation Assumptions” means, as of an Early Termination Effective Date, the assumptions that:

 

(i)            in each Taxable Year ending on or after such Early Termination Effective Date, the Corporation will have taxable income sufficient to fully use the Covered Tax Assets (other than any such Covered Tax Assets that constitute or have resulted in net operating losses, disallowed interest expense carryforwards, or credit carryforwards or carryovers (determined as of the Early Termination Effective Date), which shall be governed by paragraph (iv) below) during such Taxable Year or future Taxable Years (including, for the avoidance of doubt, Basis Adjustments and Imputed Interest that would result from future Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such deductions would become available;

 

(ii)           the U.S. federal income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code and other applicable Law as in effect on the Early Termination Effective Date, except to the extent any change to such tax rates for such Taxable Year have already been enacted into Law, and the combined U.S. state and local income and franchise tax rates shall be the Assumed State and Local Tax Rate in effect for each such Taxable Year (calculated based on apportionment factors applicable in the most recently ended Taxable Year prior to the Early Termination Effective Date);

 

(iii)          all taxable income of the Corporation will be subject to the maximum applicable tax rates for each Covered Tax throughout the relevant period; provided, that the combined tax rate for U.S. state and local income and franchise taxes shall be the Assumed State and Local Tax Rate;

 

(iv)          any carryovers or carrybacks of losses, credits, or disallowed interest expense generated by any Covered Tax Assets (including any Basis Adjustments or Imputed Interest generated as a result of payments made or deemed to be made under this Agreement) and available (after taking into account any applicable limitations, including Section 172(a)(2)(B) of the Code) as of the Early Termination Effective Date will be used by the Corporation ratably in each of the five consecutive Taxable Years beginning with the Taxable Year that includes the Early Termination Effective Date (but, in the case of any such carryover or carryback that has less than five remaining Taxable Years until the applicable expiration date, ratably through the scheduled expiration date of such carryover or carryback) (by way of example, if on the Early Termination Effective Date the Corporation had $100 of net operating losses, $20 of such net operating losses would be used in each of the five consecutive Taxable Years beginning in the Taxable Year of such Early Termination Effective Date);

 

 

(v)           any non-amortizable assets (other than Subsidiary Stock) will be disposed of on the fifteenth anniversary of the Early Termination Effective Date and any Subsidiary Stock will be deemed never to be disposed of;

 

(vi)          if, on the Early Termination Effective Date, any TRA Party has Common Units that have not been Exchanged or otherwise acquired by the Corporation as part of the Common Unit Contribution, then such Common Units shall be deemed to be Exchanged for the Market Value of the shares of Class A Common Stock or the amount of cash that would be received by such TRA Party had such Common Units actually been Exchanged on the Early Termination Effective Date;

 

(vii)         any future payment obligations pursuant to this Agreement that are used to calculate the Early Termination Payment will be satisfied on the date that any Tax Return to which any such payment obligation relates is required to be filed excluding any extensions; and

 

(viii)        with respect to Taxable Years ending prior to the Early Termination Effective Date, any unpaid Tax Benefit Payments and any applicable Default Rate Interest will be paid.

 

“Voluntary Early Termination” is defined in Section 4.2(a)(i).

 

“XERC” is defined in the preamble to this Agreement.

 

“XERC Group” means XERC and each of its direct or indirect subsidiaries that is treated as a partnership or disregarded entity for U.S. federal, and applicable state and local, income tax purposes (but excluding any such subsidiary to the extent it is directly or indirectly held by or through any entity treated as a corporation for U.S. federal, and applicable state and local, income tax purposes (other than the Corporation)).

 

Section 1.2.         Rules of Construction. Unless otherwise specified in this Agreement:

 

(a)            For purposes of interpretation of this Agreement:

 

(i)            The words “herein,” “hereto,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement.

 

(ii)           Words denoting any gender shall include all genders, and words in the singular, including any defined terms, include the plural and vice versa.

 

(iii)          Reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity.

 

 

(iv)          All financial accounting terms used and not otherwise defined in this Agreement have the meaning assigned to such terms in accordance with GAAP.

 

(v)           Unless specified otherwise, references to an Article, Section or clause refer to the appropriate Article, Section or clause in this Agreement.

 

(vi)          The term “Dollars” or character “$” means United States dollars.

 

(vii)         The terms “include” or “including” are by way of example and not limitation and shall be deemed followed by the words “without limitation”.

 

(viii)        The word “if” and other words of similar import when in this Agreement means “if and only if”.

 

(ix)           The term “or”, when used in a list of two or more items, means “and/or” and may indicate any combination of the items.

 

(x)           The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(b)            In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including.”

 

(c)            The Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement.

 

(d)            Unless otherwise expressly provided in this Agreement, (i) references to organizational documents (including the Operating Agreement), agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are permitted by this Agreement, and (ii) references to any Law (including the Code and the Treasury Regulations) include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

 

 

ARTICLE II

 

Determination of Realized Tax Benefit

 

Section 2.1.         Basis Adjustments; XERC 754 Election.

 

(a)            Basis Adjustments. The Parties acknowledge and agree that to the fullest extent permitted by applicable Law (i) each Redemption using cash or Class A Common Stock contributed to XERC by the Corporation shall be treated as a direct purchase of Common Units by the Corporation from the applicable Exchange TRA Party pursuant to Section 707(a)(2)(B) of the Code (or any similar provisions of applicable state or local tax Law) (i.e., equivalent to a Direct Exchange), and (ii) each (A) Exchange, (B) payment made by the Corporation (including under this Agreement, but except with respect to amounts that constitute Imputed Interest) to an Exchange TRA Party in connection with an Exchange or the Common Unit Contribution and (C) each distribution (or deemed distribution) from XERC to an Exchange TRA Party that may reasonably be treated as a transaction between the Corporation and the Exchange TRA Party pursuant to Section 707(a)(2)(B) of the Code (or any similar provisions of applicable state or local tax Law) will give rise to an increase or decrease to, or the Corporation’s proportionate share of, the tax basis of the Reference Assets (which are depreciable or amortizable (including assets that will eventually be subject to depreciation or amortization, once placed in service) for U.S. federal income tax purposes or stock of a corporation or land) under Section 732, 734(b), or 743(b) or 1012 of the Code (or any similar provisions of state or local tax Law) (the “Basis Adjustments”). For purposes of determining the Corporation’s proportionate share of the tax basis of the Reference Assets with respect to the Common Units transferred in an Exchange under Treasury Regulations Section 1.743-1(b) (or any similar provisions of state or local tax Law), the consideration paid by the Corporation for such Common Units shall be the Amount Realized. Notwithstanding any other provision of this Agreement, the amount of any Basis Adjustment resulting from an Exchange of one or more Common Units is to be determined as if any Pre-Exchange Transfer of such Common Units had not occurred.

 

(b)            XERC Section 754 Election. The Corporation shall cause each of XERC and its Subsidiaries (as reasonably determined by the Corporation) that is treated as a partnership for U.S. federal income tax purposes to have in effect an election under Section 754 of the Code (or any similar provisions of applicable state or local tax Law) for each Taxable Year in which an Exchange occurs. The Corporation shall take commercially reasonable efforts to cause each Person in which XERC owns a direct or indirect equity interest (other than a Subsidiary and any Person that is directly or indirectly held by or through an entity treated as a corporation for U.S. federal, and applicable state and local, income tax purposes) that is so treated as a partnership to have in effect any such election for each Taxable Year in which an Exchange occurs.

 

Section 2.2.          Attribute Schedules. Within one hundred and fifty (150) calendar days after the filing of the U.S. federal income Tax Return of the Corporation for each relevant Taxable Year, the Corporation shall deliver to the TRA Parties a schedule showing, in reasonable detail, (i) the Covered Tax Assets that are available for use by the Corporation with respect to such Taxable Year with respect to each TRA Party (including the Basis Adjustments with respect to the Reference Assets resulting from Exchanges, Common Unit Contribution or the Mergers effected in such Taxable Year and the periods over which such Basis Adjustments are amortizable or depreciable), (ii) the portion of the Covered Tax Assets that are available for use by the Corporation in future Taxable Years with respect to each TRA Party and (iii) any limitations on the ability of the Corporation to utilize any Covered Tax Assets under applicable Laws (including as a result of the operation of Section 382 of the Code or Section 383 of the Code) (such schedule, an “Attribute Schedule”). An Attribute Schedule will become final and binding on the Parties pursuant to the procedures set forth in Section 2.4(a) and may be amended by the Parties pursuant to the procedures set forth in Section 2.4(b).

 

 

Section 2.3.          Tax Benefit Schedules.

 

(a)            Tax Benefit Schedule. Within one hundred and fifty (150) calendar days after the filing of the U.S. federal income Tax Return of the Corporation for any Taxable Year in which there is a Realized Tax Benefit or Realized Tax Detriment Attributable to a TRA Party, the Corporation shall provide to such TRA Party a schedule showing, in reasonable detail, the calculation of the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year (a “Tax Benefit Schedule”). A Tax Benefit Schedule will become final and binding on the Parties pursuant to the procedures set forth in Section 2.4(a) and may be amended by the Parties pursuant to the procedures set forth in Section 2.4(b).

 

(b)            Applicable Principles. Subject to the provisions hereunder, the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the Actual Tax Liability of the Corporation for such Taxable Year attributable to the Covered Tax Assets, as determined using a “with and without” methodology. Carryovers or carrybacks of any tax item attributable to any of the Covered Tax Assets shall be considered to be subject to the rules of the Code and the Treasury Regulations, and the appropriate provisions of state and local tax Law, governing the use, limitation or expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any tax item includes a portion that is attributable to any Covered Tax Assets (a “TRA Portion”) and another portion that is not attributable to any Covered Tax Assets (a “Non-TRA Portion”), such portions shall be considered to be used in accordance with the “with and without” methodology so that the amount of any Non-TRA Portion is deemed utilized first, followed by the amount of any TRA Portion (with the TRA Portion being applied on a proportionate basis consistent with the provisions of Section 3.3(a)). In accordance with [Section 5.04(b)] of the Operating Agreement, any revaluation of the Book Value (as defined in the Operating Agreement) of any property of XERC in connection with the IPO shall be determined pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (computed in accordance with the definition of Book Value) using the [“traditional method with curative allocations limited to back end gain on sale.”]

 

Section 2.4.          Procedures; Amendments.

 

(a)            Procedures. Each time the Corporation delivers a Schedule to the TRA Parties under this Agreement, the Corporation shall, with respect to such Schedule, also (i) deliver to the TRA Representatives supporting schedules and work papers, as reasonably requested by any TRA Representative, that provide a reasonable level of detail regarding relevant data and calculations and (ii) allow the TRA Representatives and their advisors to have reasonable access to the appropriate representatives, as reasonably requested by the TRA Representatives, at the Corporation or the Advisory Firm in connection with a review of relevant information. A Schedule will become final and binding on the TRA Parties thirty (30) calendar days from the date on which the TRA Parties first received the applicable Schedule unless (x) a TRA Representative, within such period, provides the Corporation with written notice of a material objection (made in good faith) to such Schedule and sets forth in reasonable detail such TRA Representative’s material objection (an “Objection Notice”) or (y) the TRA Representative provides a written waiver of its right to deliver an Objection Notice within such period, in which such Schedule becomes binding on the date the waiver from the TRA Representatives is received. If the Parties, for any reason, are unable to resolve the issues raised in an Objection Notice within thirty (30) calendar days after receipt by the Corporation of the Objection Notice, the Corporation and the applicable TRA Representative shall employ the Reconciliation Procedures described in Section 7.8 and the finalization of the Schedule will be conducted in accordance therewith.

 

 

(b)            Amended Schedule. A Schedule (other than an Early Termination Schedule) for any Taxable Year may only and shall be amended from time to time by the Corporation (i) in connection with a Determination affecting such Schedule, (ii) to correct material inaccuracies in such Schedule identified as a result of the receipt of additional factual information relating to a Taxable Year after the date such Schedule was originally provided to the TRA Parties, (iii) to comply with an Expert’s determination under the Reconciliation Procedures, (iv) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to a carryover or carryback of a loss or other tax item to such Taxable Year or (v) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year (any such Schedule in its amended form, an “Amended Schedule”). The Corporation shall provide any Amended Schedule to the applicable TRA Parties within sixty (60) calendar days of the occurrence of an event referred to in any of clauses (i) through (v) of the preceding sentence, and the delivery and finalization of any such Amended Schedule shall, for the avoidance of doubt, be subject to the procedures described in Section 2.4(a).

 

ARTICLE III

 

Tax Benefit Payments

 

Section 3.1.          Timing and Amount of Tax Benefit Payments.

 

(a)            Timing of Payments. Subject to Sections 3.2 and 3.3, by the date that is five (5) Business Days following the date on which each Tax Benefit Schedule becomes final in accordance with Section 2.4(a) (such date, the “Final Payment Date” in respect of any Tax Benefit Payment), the Corporation shall pay in full to each relevant TRA Party the Tax Benefit Payment as determined pursuant to Section 3.1(b). Each such Tax Benefit Payment shall be made by wire transfer of immediately available funds to a bank account or accounts designated by such TRA Party. For the avoidance of doubt, no TRA Party shall be required under any circumstances to return any Payment or any Default Rate Interest paid by the Corporation to such TRA Party.

 

(b)            Amount of Payments. For purposes of this Agreement, a “Tax Benefit Payment” with respect to any TRA Party means an amount equal to the sum of the Net Tax Benefit that is Attributable to such TRA Party plus the Interest Amount with respect thereto and minus any TRA Accounting and Legal Expenses that have not previously been taken into account in the determination of a Tax Benefit Payment as of the end of such Taxable Year. No Tax Benefit Payment shall be calculated or made in respect of any estimated tax payments, including any estimated U.S. federal income tax payments.

 

 

(i)            Attributable. A Net Tax Benefit is “Attributable” to a TRA Party in accordance with the following principles:

 

(A) any Blocker Transferred Basis is Attributable to the Blocker Shareholders in accordance with such Blocker Shareholders’ proportionate ownership of the total equity interests of the Blocker Corporation immediately prior to the Mergers;

 

(B) any Existing Basis shall be determined separately with respect to each Exchange TRA Party and is Attributable to an Exchange TRA Party based on such Exchange TRA Party’s relative pro rata share in accordance with percentage interest of Common Units held immediately after the IPO or, in the case of a Subsequent Capital Contribution, immediately prior to such Subsequent Capital Contribution;

 

(C)  any Exchange Existing Basis shall be determined separately with respect to each Exchange TRA Party and is Attributable to each TRA Party to the extent it is attributable to Common Units that were transferred in an Exchange or the Common Unit Contribution by such TRA Party;

 

(D) any Basis Adjustments shall be determined separately with respect to each TRA Party and are Attributable to each TRA Party in an amount equal to the total Basis Adjustment relating to Common Units delivered to the Corporation by such TRA Party in the Exchange or the Common Unit Contribution or such total Basis Adjustment attributable to any distribution (or deemed distribution) to such TRA Party; and

 

(E) any deduction to the Corporation in respect of Imputed Interest is Attributable to the TRA Party that is required to include the Imputed Interest in income (without regard to whether such Person is actually subject to tax thereon).

 

(ii)           Net Tax Benefit. The “Net Tax Benefit” with respect to a TRA Party for a Taxable Year equals the amount of the excess, if any, of (A) 85% of the Cumulative Net Realized Tax Benefit Attributable to such TRA Party as of the end of such Taxable Year over (B) the aggregate amount of all Tax Benefit Payments previously made to such TRA Party under this Section 3.1 (excluding payments attributable to Interest Amounts).

 

(iii)          Cumulative Net Realized Tax Benefit. The “Cumulative Net Realized Tax Benefit” for a Taxable Year equals the cumulative amount of Realized Tax Benefits for all Taxable Years of the Corporation up to and including such Taxable Year, net of the cumulative amount of Realized Tax Detriments for the same period. The Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination.

 

 

 

 

(iv)          Realized Tax Benefit. The “Realized Tax Benefit” for a Taxable Year equals the excess, if any, of the Hypothetical Tax Liability over the Actual Tax Liability for such Taxable Year. If all or a portion of the Actual Tax Liability for such Taxable Year arises as a result of an audit or similar proceeding by a Taxing Authority of any Taxable Year, such liability and the corresponding impact on the Hypothetical Tax Liability as a result of such audit or similar proceeding, if applicable, shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.

 

(v)           Realized Tax Detriment. The “Realized Tax Detriment” for a Taxable Year equals the excess, if any, of the Actual Tax Liability over the Hypothetical Tax Liability for such Taxable Year. If all or a portion of the Actual Tax Liability for such Taxable Year arises as a result of an audit or similar proceeding by a Taxing Authority of any Taxable Year, such liability and the corresponding impact on the Hypothetical Tax Liability as a result of such audit or similar proceeding, if applicable, shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination.

 

(vi)          Interest Amount. The “Interest Amount” in respect of a TRA Party equals interest on the unpaid amount of the Net Tax Benefit with respect to such TRA Party for a Taxable Year, calculated at the Agreed Rate from the due date (without extensions) for filing the U.S. federal income Tax Return of the Corporation for such Taxable Year until the earlier of (A) the date on which no remaining Tax Benefit Payment to the TRA Party is due in respect of such Net Tax Benefit and (B) the applicable Final Payment Date.

 

(vii)         “TRA Accounting and Legal Expenses” means the Corporation’s and XERC’s reasonable and documented accounting and legal expenses payable to any applicable nationally-recognized accounting firm and nationally-recognized law firm, as well as its reasonable allocation of internal accounting costs incurred, in connection with the administration of this Agreement. For these purposes, such amount is allocated among the TRA Parties in the same proportion to the respective Tax Benefit Payments to be paid under Section 3.1(a) (not taking into consideration any allocable TRA Accounting and Legal Expenses for such Taxable Year) bears to the total amount of Tax Benefit Payments to be paid to all TRA Parties under Section 3.1(a). Any TRA Accounting and Legal Expenses shall be carried forward to the following Taxable Year to the extent such TRA Accounting and Legal Expenses are not taken into account in the final determination of the Tax Benefit Payment for such Taxable Year because the Tax Benefit Payment due for such Taxable Year (determined without regard to TRA Accounting and Legal Expenses) is less than the amount of TRA Accounting and Legal Expenses for such Taxable Year (including any carried forward amounts). For the avoidance of doubt, no expenses incurred in connection with or attributable to the IPO shall be included in TRA Accounting and Legal Expenses.

 

 

(viii)        The TRA Parties acknowledge and agree that, as of the date of this Agreement and the date of the Common Unit Contribution, the Mergers or any future Exchange that may be subject to this Agreement, the aggregate value of the Tax Benefit Payments cannot be reasonably ascertained for U.S. federal income or other applicable tax purposes. Notwithstanding anything to the contrary in this Agreement, unless a TRA Party notifies the Corporation otherwise, the stated maximum selling price (within the meaning of Treasury Regulations Section 15A.453-1(c)(2)) with respect to (A) with respect to any transfer of Common Units by an Exchange TRA Party pursuant to the Common Unit Contribution shall not exceed the sum of (I) the value of the Class A Common Stock delivered to the Exchange TRA Party in the Common Unit Contribution plus (II) [●%] of the Covered Tax Assets relating to the Common Unit Contribution, and the aggregate Payments under this Agreement to such Exchange TRA Party (other than amounts accounted for as interest under the Code) in respect of the Covered Tax Assets relating to the Common Unit Contribution shall not exceed the amount described in this clause (A)(II) and (B) any transfer of Common Units by an Exchange TRA Party pursuant to an Exchange shall not exceed the sum of (I) the value of the Class A Common Stock or the amount of cash delivered to the Exchange TRA Party, in each case, in the Exchange plus (II) the product of (1) the highest marginal federal income tax rate applicable to corporations in effect for the taxable year of such Exchange plus the Assumed State and Local Tax Rate for the taxable year of such Exchange and (2) [85%] of the Existing Basis that is Attributable to Exchange TRA Party and allocable to the Exchange and the Covered Tax Assets relating to the Exchange, and the aggregate Payments under this Agreement to such Exchange TRA Party (other than amounts accounted for as interest under the Code) in respect of the Covered Tax Assets relating to the Exchange shall not exceed the amount described in this clause (B)(II) and (C) with respect to the Mergers (including amounts payable to the Blocker Shareholder pursuant to this Agreement) shall not exceed sum of (I) the value of the Class A Common Stock delivered to the Blocker Shareholders in the Mergers on the closing date of such Mergers, (II) the amount of cash, if any, delivered to the Blocker Shareholders in the Mergers plus (III) the product of (1) the highest marginal federal income tax rate applicable to corporations in effect for the taxable year of such Exchange plus the Assumed State and Local Tax Rate for the taxable year of such Exchange and (2) [●]% of the sum of the Blocker Tax Attributes, and the aggregate Payments under this Agreement to such Blocker Shareholders (other than amounts accounted for as interest under the Code) shall not exceed the amount described in this clause (C)(III).

 

Section 3.2.        No Duplicative Payments. It is intended that the provisions hereunder will not result in the duplicative payment of any amount that may be required under this Agreement, and the provisions hereunder shall be consistently interpreted and applied in accordance with that intent.

 

Section 3.3.        Pro-Ration of Payments as Between the TRA Parties.

 

(a)            Insufficient Taxable Income. Notwithstanding anything in Section 3.1(b) to the contrary, if the aggregate potential Covered Tax benefit of the Corporation as calculated with respect to the Covered Tax Assets (in each case, without regard to the Taxable Year of origination) is limited in a particular Taxable Year because the Corporation does not have sufficient actual taxable income, then the available Covered Tax benefit for the Corporation shall be allocated among the TRA Parties in proportion to the respective Tax Benefit Payments that would have been payable if the Corporation had sufficient taxable income. For example, if the Corporation had $200 of aggregate potential Covered Tax benefits with respect to the Covered Tax Assets in a particular Taxable Year (with $50 of such Covered Tax benefits Attributable to TRA Party A and $150 Attributable to TRA Party B), such that TRA Party A would have been entitled to a Tax Benefit Payment of $42.50 and TRA Party B would have been entitled to a Tax Benefit Payment of $127.50 if the Corporation had sufficient actual taxable income, and if the Corporation instead had insufficient actual taxable income in such Taxable Year, such that the Covered Tax benefit was limited to $100, then $25 of the aggregate $100 actual Covered Tax benefit for the Corporation for such Taxable Year would be allocated to TRA Party A and $75 would be allocated to TRA Party B, such that TRA Party A would receive a Tax Benefit Payment of $21.25 and TRA Party B would receive a Tax Benefit Payment of $63.75.

 

 

(b)            Late Payments. If for any reason the Corporation is not able to fully satisfy its payment obligations to make all Tax Benefit Payments due in respect of a particular Taxable Year, then (i) Default Rate Interest will accrue pursuant to Section 5.2, (ii) the Corporation shall pay the available amount of such Tax Benefit Payments (and any applicable Default Rate Interest) in respect of such Taxable Year to each TRA Party pro rata in accordance with Section 3.3(a) and (iii) no Tax Benefit Payment shall be made in respect of any Taxable Year until all Tax Benefit Payments (and any applicable Default Rate Interest) to all TRA Parties in respect of all prior Taxable Years have been made in full. Notwithstanding the preceding sentence, for the avoidance of doubt, the Default Rate shall not apply (and the Agreed Rate shall apply) in such certain circumstances described in the second proviso to third sentence of Section 4.1(c) and Section 5.2. Notwithstanding anything herein to the contrary, no interest shall accrue with respect to the delay of any payments as a result of a Reconciliation Dispute pursuant to Section 7.8.

 

Section 3.4.        Overpayments. Subject to the procedures described in Section 2.4(a), to the extent the Corporation makes a payment to a TRA Party in respect of a particular Taxable Year under Section 3.1(a) in an amount in excess of the amount of such payment that should have been made to such TRA Party in respect of such Taxable Year (taking into account Section 3.3) under the terms of this Agreement, then such TRA Party shall not receive further payments under Section 3.1(a) or Section 4.3(a) until such TRA Party has foregone an amount of payments equal to such excess; provided, that for the avoidance of the doubt, no TRA Party shall be required to return any Payment or any interest paid by the Corporation to such TRA Party.

 

 

ARTICLE IV

 

Termination

 

Section 4.1.        Early Termination of Agreement; Acceleration Events.

 

(a)            Corporation’s Early Termination Right. With the written approval of a majority of the Independent Directors, the Corporation may terminate this Agreement, as and to the extent provided herein, by paying in full each and every TRA Party the Early Termination Payment (along with any applicable Default Rate Interest) due to such TRA Party.

 

(b)            Change of Control. In the event of a Change of Control, this Agreement shall not terminate and, for the avoidance of doubt, shall not result in any rights or obligations with respect to any Early Termination Payment; provided, however, that a majority of the Independent Directors may approve in writing to terminate this Agreement in accordance with Section 7.5(b) upon such Change of Control under the terms and conditions (including payment obligations, if any) determined in the sole judgement of such Independent Directors. In the event of a Change of Control, all obligations hereunder shall be calculated (i) utilizing the Valuation Assumptions by substituting in each case the terms “the closing date of a Change of Control” in each place where the phrase “Early Termination Effective Date” appears and (ii) if, at the time of the Change of Control, there are Common Units that have not been Exchanged, then each such Common Unit, shall be deemed Exchanged for the Market Value of the Class A Common Stock and the amount of cash that would be transferred if the Exchange occurred at the time of the Change of Control.

 

(c)            Breach of Agreement. In the event of a Material Breach that has not been cured prior to the due date of the Tax Return (including extensions) of the Corporation for the Taxable Year in which such Material Breach occurred, all Tax Benefit Payments shall be calculated utilizing the Valuation Assumptions; provided that, (i) if such Material Breach is cured prior to the due date of the Tax Return (including extensions) of the Corporation for the Taxable Year in which such Material Breach occurred, then the Valuation Assumptions shall not apply and the Tax Benefit Payments shall be calculated pursuant to this Agreement as if such Material Breach had not occurred and (ii) if such Material Breach is cured after such date, then the Valuation Assumptions shall no longer apply with respect to any Tax Benefit Payments for any Taxable Year that includes or ends after the date of such cure. Subject to the next sentence, the Corporation’s failure to make a Payment (along with any applicable interest) within ninety (90) calendar days of the applicable Final Payment Date shall be deemed to constitute a Material Breach. To the extent that any Tax Benefit Payment is not made by the date that is ninety (90) calendar days after the relevant Final Payment Date because the Corporation (i) is prohibited from making such payment under Section 5.1 or the terms of any agreement governing any Senior Obligations or (ii) does not have, and cannot take commercially reasonable actions to obtain, sufficient funds to make such payment, such failure to make a Tax Benefit Payment will not constitute a Material Breach; provided that (A) such payment obligation nevertheless [will accrue Default Rate Interest for the benefit of the TRA Parties in accordance with Section 5.2, provided that the Default Rate shall be replaced by the Subordination Rate], (B) the Corporation shall promptly (and in any event, within five (5) Business Days) pay the entirety of the unpaid amount (along with any applicable interest) once the Corporation is not prohibited from making such payment under Section 5.1 or the terms of the agreements governing the Senior Obligations and the Corporation has sufficient funds to make such payment and (C) the failure of the Corporation to comply with the foregoing clause (B) will constitute a Material Breach. For the avoidance of doubt, all cash and cash equivalents used or to be used by the Corporation to pay distributions to its stockholders or to repurchase capital stock of the Corporation (including Class A Common Stock) shall be deemed to be funds available to pay Tax Benefit Payments (along with any applicable interest). The Corporation shall use commercially reasonable efforts to maintain sufficient available funds for the purpose of making Tax Benefit Payments under this Agreement.

 

 

(d)            In the case of a termination pursuant to the foregoing paragraphs (a), upon the Corporation’s payment in full of the Early Termination Payment (along with any applicable Default Rate Interest) to each TRA Party, the Corporation shall have no further payment obligations under this Agreement other than with respect to any Tax Benefit Payments (along with any applicable Default Rate Interest) in respect of any Taxable Year ending prior to the Early Termination Effective Date, and such payment obligations shall survive the termination of, and be calculated and paid in accordance with, this Agreement. If an Exchange subsequently occurs with respect to Common Units for which the Corporation has paid the Early Termination Payment in full, the Corporation shall have no obligations under this Agreement with respect to such Exchange.

 

Section 4.2.        Early Termination Notice.

 

(a)            If (i) the Corporation chooses to exercise its termination right under Section 4.1(a) (“Voluntary Early Termination”) or (ii) a Material Breach occurs, the Corporation shall, in each case, deliver to the TRA Parties a reasonably detailed notice of the Corporation’s decision to exercise such right or the occurrence of such event, as applicable (an “Early Termination Notice”). In the case of an Early Termination Notice delivered with respect to a Voluntary Early Termination, the Corporation may withdraw such Early Termination Notice and rescind its Voluntary Early Termination at any time prior to the time at which any Early Termination Payment is paid and the terms of this Agreement shall apply as if such Early Termination Notice had never been delivered.

 

(b)            The Corporation shall deliver a schedule showing in reasonable detail the calculation of the Early Termination Payment (an “Early Termination Schedule”) (i) in case of a Voluntary Early Termination, simultaneously with the delivery of an Early Termination Notice or (ii) in the case of a termination pursuant to Section 4.1(c), as soon as reasonably practicable following the occurrence of the Material Breach giving rise to such termination. The date on which such Early Termination Schedule becomes final in accordance with Section 2.4(a) shall be the “Early Termination Reference Date”.

 

Section 4.3.        Payment upon Early Termination.

 

(a)            Timing of Payment. By the date that is five (5) Business Days after the Early Termination Reference Date (such date, the “Final Payment Date” in respect of the Early Termination Payment), the Corporation shall pay in full to each TRA Party an amount equal to the Early Termination Payment applicable to such TRA Party. Such Early Termination Payment shall be made by the Corporation by wire transfer of immediately available funds to a bank account or accounts designated by the applicable TRA Party.

 

 

(b)            Amount of Payment. The “Early Termination Payment” payable to a TRA Party pursuant to Section 4.3(a) shall equal the present value, discounted at the Agreed Rate and determined as of the Early Termination Reference Date, of all Tax Benefit Payments (other than any Tax Benefit Payments in respect of Taxable Years ending prior to the Early Termination Effective Date) that would be required to be paid by the Corporation to such TRA Party, beginning from the Early Termination Effective Date and using the Valuation Assumptions. For the avoidance of doubt, an Early Termination Payment shall be made to each TRA Party in accordance with this Agreement, regardless of whether a TRA Party has Exchanged all of its Common Units as of the Early Termination Effective Date.

 

ARTICLE V

 

Subordination and Late Payments

 

Section 5.1.        Subordination. Notwithstanding any other provision of this Agreement to the contrary, any payment required to be made by the Corporation to the TRA Parties under this Agreement (the “TRA Payment Obligations”) shall be contractually subordinate and junior in right of payment to any principal, interest, premium, fees, expenses, indemnification obligations or other amounts due and payable in respect of (a) any obligations owed in respect of secured or unsecured indebtedness for borrowed money of the Corporation or any of its Subsidiaries (other than, for the avoidance of doubt, any trade payables, intercompany debt or other similar obligations), (b) any guarantee by the Corporation or any of its Subsidiaries of any obligations described in clause (a), and (c) any refinancing, extension, renewal or replacement of any obligation described in clauses (a) or (b) (collectively “Senior Obligations”) and shall rank pari passu in right of payment with all current or future unsecured obligations of the Corporation that are not Senior Obligations. For the avoidance of doubt, nothing in this Agreement shall prohibit the Corporation from entering into Senior Obligations, including Senior Obligations in which the TRA Payment Obligations are deemed to be restricted payments under such agreements. Any Tax Benefit Payment or Early Termination Payment required to be made by the Corporation to the TRA Parties under this Agreement shall rank senior in right of payment to any principal, interest, or other amounts due and payable in respect of any Other TRA. The effect of any Other TRA shall not be taken into account in respect of any calculations made hereunder.

 

Section 5.2.        Late Payments by the Corporation. Subject to Section 4.1(c), the amount of any Payment not made to any TRA Party by the applicable Final Payment Date shall be payable together with “Default Rate Interest,” calculated at the Default Rate and accruing on the amount of the unpaid Payment from the applicable Final Payment Date until the date on which the Corporation makes such Payment to such TRA Party.

 

 

ARTICLE VI

 

Tax Matters; Consistency; Cooperation

 

Section 6.1.        Participation in the Corporation’s and XERC’s Tax Matters. Except as otherwise provided herein or in Article IX of the Operating Agreement, the Corporation shall have full responsibility for, and sole discretion over, all tax matters concerning the Corporation and XERC, including preparing, filing or amending any Tax Return and defending, contesting or settling any issue pertaining to taxes; provided, however, that the Corporation shall not settle any issue pertaining to Covered Tax Assets that is reasonably expected to materially adversely affect the TRA Parties’ rights and obligations under this Agreement without the consent of the TRA Representatives, such consent not to be unreasonably withheld, conditioned or delayed. If the TRA Representatives fail to respond to any notice with respect to the settlement of any such issue within thirty (30) calendar days of its receipt of the applicable notice, the TRA Representatives shall be deemed to have consented to the proposed settlement or other disposition. Notwithstanding the foregoing, (i) the Corporation shall notify the TRA Representatives of, and keep them reasonably informed with respect to, the portion of any audit by any Taxing Authority of the Corporation, XERC or any of XERC’s Subsidiaries, the outcome of which is reasonably expected to materially and adversely affect the TRA Parties’ rights and obligations under this Agreement, including the timing of anticipated Tax Benefit Payments and (ii) the TRA Representatives shall each have the right to participate in and to monitor at their own expense (but, for the avoidance of doubt, not to control) any such issue in any such tax audit. To the extent there is a conflict between this Agreement and the Operating Agreement as it relates to tax matters concerning Covered Taxes and the Corporation and XERC, including preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to taxes, this Agreement shall control.

 

Section 6.2.        Consistency. Except upon the written advice of the Advisory Firm, all calculations and determinations made hereunder, including any Basis Adjustments, the Schedules and the determination of any Realized Tax Benefits or Realized Tax Detriments, shall be made in accordance with the elections, methodologies and positions taken by the Corporation and applicable members of the XERC Group on their respective Tax Returns. Each TRA Party shall prepare its Tax Returns in a manner consistent with the terms of this Agreement and any related calculations or determinations made hereunder, including the terms of Section 2.1 and the Schedules provided to each such TRA Party, except as otherwise required by applicable Law. In the event that an Advisory Firm is replaced with another Advisory Firm acceptable to the Audit Committee, the TRA Parties shall cause such replacement Advisory Firm to perform its services necessitated by this Agreement using procedures and methodologies consistent with those of the previous Advisory Firm, unless otherwise required by applicable Law or unless the Corporation and all of the TRA Representatives agree to the use of other procedures and methodologies.

 

 

Section 6.3.        Cooperation.

 

(a)            Each TRA Party shall (i) furnish to the Corporation in a timely manner such information, documents and other materials as the Corporation may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return of XERC or any of its Subsidiaries or contesting or defending any related audit, examination or controversy with any Taxing Authority, (ii) make itself available to the Corporation and its representatives to provide explanations of documents and materials and such other information as the Corporation or its representatives may reasonably request in connection with any of the matters described in clause (i) above and (iii) reasonably cooperate in connection with any such matter. Upon the request of any TRA Party, the Corporation shall use commercially reasonable efforts to execute and provide such documents and otherwise cooperate in taking any action reasonably requested by such TRA Party in connection with its tax or financial reporting and/or the consummation of any assignment or transfer of any of its rights and/or obligations under this Agreement.

 

ARTICLE VII

 

Miscellaneous

 

Section 7.1.        Notices. All notices, consents, waivers and other communications under this Agreement shall be in writing and shall be deemed to have been duly given: (i) when delivered, if delivered in person; (ii) when sent, if sent by electronic mail or other electronic means (provided that no “bounce back” or similar message is received); (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service; or (iv) three Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, to the applicable Party at the following addresses (or at such other address for a Party as shall be specified by like notice):

 

If to the Corporation, to:

 

X-energy, Inc.

801 Thompson Avenue, Suite 400

Rockville, MD 20852

Attn: [●]

Email: [●]

 

With a copy (which will not constitute notice) to:

 

Latham & Watkins LLP

555 Eleventh Street, NW, Suite 1000

Washington, D.C. 20004

Attn: Paul Sheridan; Ian Schuman; John Slater

Email: paul.sheridan@lw.com; ian.schuman@lw.com; john.slater@lw.com

 

 

If to any TRA Party, to the address and e-mail address specified on such TRA Party’s signature page to the applicable Joinder or otherwise on file with the Corporation or XERC.

 

Any Party may change its address or e-mail address by giving each of the other Party written notice thereof in the manner set forth above.

 

Section 7.2.        Counterparts. This Agreement may be executed and delivered (including by electronic transmission) in one or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. This Agreement shall become effective when one or more counterparts have been signed by each of the TRA Parties and delivered to the other TRA Parties, it being understood that all TRA Parties need not sign the same counterpart.

 

Section 7.3.        Entire Agreement; No Third-Party Beneficiaries. This Agreement and the documents or instruments referred to in this Agreement, including any exhibits attached, which exhibits are incorporated by reference, embody the entire agreement and understanding of the Parties in respect of the subject matter contained in this Agreement. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to in this Agreement or the documents or instruments referred to in this Agreement, which collectively supersede all prior agreements and the understandings among the Parties with respect to the subject matter contained in this Agreement. Nothing contained in this Agreement or in any instrument or document executed by any party in connection with this Agreement shall create any rights in, or be deemed to have been executed for the benefit of, any Person that is not a Party or a successor or permitted assign of such a Party.

 

Section 7.4.        Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable by any court of competent jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable. The validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired nor shall the validity, legality or enforceability of such provision be affected in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

 

 

Section 7.5.        Assignments; Amendments; Successors; No Waiver.

 

(a)            Assignment. [Each TRA Party may assign any of its rights under this Agreement to (i) any transferee of Common Units beneficially owned by such TRA Party in a transfer permitted by the Operating Agreement or (ii) to an Affiliate of such TRA Party, in each case, so long as such assignee executes and delivers a Joinder agreeing to succeed to the applicable portion of such TRA Party’s interest in this Agreement and to become a Party for all purposes of this Agreement (the joinder requirement in this sentence, the “Joinder Requirement”).] No TRA Party may assign, sell, pledge or otherwise alienate or transfer any interest in this Agreement, including the right to receive any payments under this Agreement, to any Person without (i) such Person fulfilling the Joinder Requirement and (ii) except with respect to an assignment pursuant to the preceding sentence, the express prior written consent of the Corporation (not to be unreasonably withheld, conditioned, or delayed except that the Corporation may withhold, condition, or delay its consent in its sole discretion to any transfer by a TRA Party (x) if the TRA Party is an original signatory to this Agreement and that TRA Party seeks to transfer a portion of its rights, in the aggregate, to more than [five] transferees, or (y) if the TRA Party is not an original signatory to this Agreement and that TRA Party seeks to transfer less than all of its rights (the requirement in this clause (ii), the “Consent Requirement”)). Any purported assignment without the Joinder Requirement and, except with respect to an assignment pursuant the first sentence of this Section 7.5, the Consent Requirement shall be null and void. For the avoidance of doubt, if a TRA Party transfers Common Units in accordance with the terms of the Operating Agreement but does not assign to the transferee of such Common Units its rights under this Agreement with respect to such transferred Common Units, such TRA Party shall continue to be entitled to receive the Tax Benefit Payments arising in respect of a subsequent Exchange of such Common Units (and any such transferred Common Units shall be separately identified, so as to facilitate the determination of payments hereunder). The Corporation may not assign any of its rights or obligations under this Agreement to any Person without TRA Party Approval (and any purported assignment without such consent shall be null and void).

 

(b)            Amendments. No provision of this Agreement may be amended unless such amendment is approved in writing by the Corporation with the approval of the TRA Representative; provided further that, to the extent any amendment would materially, adversely and disproportionately affect a TRA Party with respect to any rights under this Agreement, such amendment shall require the written approval of such affected TRA Party. For the avoidance of doubt, a TRA Party shall not be deemed to be materially, adversely and disproportionately affected solely by reason of having delivered Covered Tax Assets in different quantities or at different times compared to other TRA Parties.

 

(c)            Successors. Except as provided in Section 7.5(a), all of the terms and provisions hereunder shall be binding upon, and shall inure to the benefit of and be enforceable by, the Parties and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Corporation shall require and cause any direct or indirect successor (whether by equity purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

 

(d)            Waiver. No provision of this Agreement may be waived unless such waiver is in writing and signed by the Party against whom the waiver is to be effective. No failure by any Party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement, or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.

 

 

Section 7.6.        Resolution of Disputes; Governing Law.

 

(a)            Except for Reconciliation Disputes subject to Section 7.7, any and all disputes which cannot be settled after good faith negotiation within sixty (60) calendar days, including any ancillary claims of any Party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this Section 7.6 or Section 7.7) (each, a “Dispute”) shall be finally resolved by arbitration in accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration by the majority vote of a panel of three arbitrators, of which the Corporation shall designate one arbitrator and the TRA Parties that are party to such Dispute shall designate one arbitrator, in each case in accordance with the “screened” appointment procedure provided in Resolution Rule 5.4. In addition to monetary damages, the arbitrators shall be empowered and permitted to award equitable relief, including an injunction and specific performance of any obligation under this Agreement. The arbitrators are not empowered to award damages in excess of compensatory damages, and each TRA Party hereby irrevocably waives any right to recover punitive, exemplary or similar damages with respect to any Dispute. Any award shall be the sole and exclusive remedy between the TRA Parties regarding any claims, counterclaims, issues or accounting presented to the arbitrators. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of the arbitration shall be New York, New York.

 

(b)            Notwithstanding the provisions of paragraph (a) above, any Party may bring an action or special proceeding in any court of competent jurisdiction for the purpose of compelling another Party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder or enforcing an arbitration award and, for the purposes of this paragraph (b), each Party (i) expressly consents to the application of paragraphs (c) and (d) of this Section 7.6 to any such action or proceeding and (ii) agrees that proof shall not be required that monetary damages for breach of the provisions hereunder would be difficult to calculate and that remedies at law would be inadequate.

 

(c)            This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement, shall be governed by, and construed in accordance with, in all respects, including as to validity, interpretation and effect, the Laws of the State of Delaware, applicable to contracts entered into and to be performed solely within such state, without giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.. Subject to this Section 7.6 and Section 7.7, the Parties agree that any suit or proceeding in connection with, arising out of or relating to this Agreement must be brought in the Court of Chancery of the State of Delaware and any State of Delaware appellate court therefrom (or, but only to the extent the Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each of the Parties irrevocably: (i) submits to the exclusive jurisdiction of each such court in any such suit or proceeding; (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum; (iii) agrees that all claims in respect of the suit or proceeding shall be heard and determined only in any such court; and (iv) agrees not to bring any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated by this Agreement in any other court. Nothing in this Agreement shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence a suit or proceeding or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any suit or proceeding brought pursuant to this Section 7.6(c).

 

 

(d)            Each Party irrevocably and unconditionally waives, to the fullest extent permitted by Law, (i) any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 7.7(b) or 7.7(c) and (ii) the defense of an inconvenient forum to the maintenance of any such suit, action or proceeding in any such court.

 

(e)            Each Party irrevocably consents to service of process by means of notice in the manner provided for in Section 7.1. Nothing in this Agreement shall affect the right of any Party to serve process in any other manner permitted by Law.

 

(f)            ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES. THEREFORE, EACH SUCH PARTY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

Section 7.7.        Reconciliation Procedures.

 

(a)            In the event that the Corporation and any TRA Representative are unable to resolve a disagreement with respect to a Schedule prepared in accordance with the procedures set forth in Section 2.4 or Section 4.2, as applicable, within the relevant time period designated in this Agreement (a “Reconciliation Dispute”), the procedures described in this paragraph (the “Reconciliation Procedures”) will apply. The applicable TRA Representative shall, within fifteen (15) calendar days of the commencement of a Reconciliation Dispute, mutually select a nationally recognized expert in the particular area of disagreement (the “Expert”) and submit the Reconciliation Dispute to such Expert for determination. The Expert shall be a partner or principal in a nationally recognized accounting firm, and unless the Corporation and such TRA Representative agree otherwise, the Expert (and its employing firm) shall not have any material relationship with the Corporation or such TRA Representative or other actual or potential conflict of interest. If the applicable Parties are unable to agree on an Expert within such fifteen (15) calendar-day time period, the selection of an Expert shall be treated as a Dispute subject to Section 7.6 and an arbitration panel shall pick an Expert from a nationally recognized accounting firm that does not have any material relationship with the applicable Parties or other actual or potential conflict of interest. The Expert shall resolve any matter relating to (i) an Attribute Schedule, Early Termination Schedule or an amendment to either within thirty (30) calendar days and (ii) a Tax Benefit Schedule or an amendment thereto within fifteen (15) calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a disagreement is due, the undisputed amount shall be paid by the date prescribed by this Agreement and such Tax Return may be filed as prepared by the Corporation, subject to adjustment or amendment upon resolution. The Expert shall finally determine any Reconciliation Dispute, and its determinations pursuant to this Section 7.7(a) shall be binding on the applicable Parties and may be entered and enforced in any court having competent jurisdiction. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.7 or a Dispute within the meaning of Section 7.6 shall be decided and resolved as a Dispute subject to the procedures set forth in Section 7.6.

 

 

(b)            The sum of (a) the costs and expenses relating to (i) the engagement (and if applicable selection by an arbitration panel) of such Expert and (ii) if applicable, amending any Tax Return in connection with the decision of such Expert and (b) the reasonable and documented out-of-pocket costs and expenses of the Corporation and the applicable TRA Representative incurred in the conduct of such resolution process shall be allocated between the Corporation, on the one hand, and the applicable TRA Representative, on the other hand, in the same proportion that the aggregate amount of the disputed items so submitted to the Expert that is unsuccessfully disputed by each such Party (as finally determined by the Expert) bears to the total amount of such disputed items so submitted, and each such Party shall promptly reimburse the other Party for the excess that such other Party has paid in respect of such costs and expenses over the amount it has been so allocated. The Corporation may withhold payments under this Agreement to collect amounts due under the preceding sentence.

 

Section 7.8.        Withholding. The Corporation and its Affiliates shall be entitled to deduct and withhold from any payment that is payable to any TRA Party pursuant to this Agreement such amounts as the Corporation is required to deduct and withhold with respect to the making of such payment by applicable Law. To the extent that amounts are so deducted and withheld and paid over to the appropriate Taxing Authority by the Corporation, such deducted and withheld amounts shall be treated for all purposes of this Agreement as having been paid by the Corporation to the relevant TRA Party in respect of whom the deduction and withholding was made. Each TRA Party shall promptly provide the Corporation with any applicable tax forms and certifications reasonably requested by the Corporation in connection with determining whether any such deductions and withholdings are required by applicable Law. For the avoidance of doubt, this Section 7.8 shall apply to any Person who becomes a Party to this Agreement pursuant to Section 7.5.

 

Section 7.9.        Admission of the Corporation into a Consolidated Group; Transfers of Corporate Assets.

 

(a)            If the Corporation is or becomes a member of an affiliated or consolidated group of corporations that files a consolidated income Tax Return pursuant to Section 1501 or other applicable sections of the Code governing affiliated or consolidated groups, or any corresponding provisions of state or local tax Law, then (i) the provisions of this Agreement shall be applied with respect to the group as a whole, and (ii) Payments and other applicable items hereunder shall be computed with reference to the consolidated taxable income of the group as a whole.

 

 

(b)            If the Corporation or any member of the XERC Group transfers one or more Reference Assets to a Person treated as a corporation for U.S. federal income tax purposes (with which the Corporation does not file a consolidated Tax Return pursuant to Section 1501 of the Code), unless otherwise agreed to by the Corporation and each of the TRA Representatives, such transferor, for purposes of calculating the amount of any Payment due hereunder, shall be treated as having disposed of such asset in a fully taxable transaction on the date of such transfer. The consideration deemed to be received by the Corporation or XERC Group member, as the applicable transferor, shall be equal to the fair market value of the transferred asset plus the amount of debt to which such asset is subject, in the case of a transfer of an encumbered asset. For purposes of this Section 7.10, a transfer of a partnership interest shall be treated as a transfer of the transferring partner’s applicable share of each of the assets and liabilities of that partnership. Notwithstanding anything to the contrary set forth herein, if the Corporation or any member of a group described in Section 7.10(a) transfers its assets pursuant to a transaction that qualifies as a “reorganization” (within the meaning of Section 368(a) of the Code) in which such entity does not survive, pursuant to a contribution described in Section 351(a) of the Code or pursuant to any other transaction to which Section 381(a) of the Code applies (other than any such reorganization or any such other transaction, in each case, pursuant to which such entity transfers assets to a corporation with which the Corporation or any member of the group described in Section 7.10(a) (excluding any such member being transferred in such reorganization or other transaction) does not file a consolidated Tax Return pursuant to Section 1501 of the Code), the transfer will not cause such entity to be treated as having transferred any assets to a corporation (or a Person classified as a corporation for U.S. federal income tax purposes) pursuant to this Section 7.10(b).

 

Section 7.10.        Confidentiality. Each TRA Party and each of its respective assignees acknowledges and agrees that the information of the Corporation is confidential and, except in the course of performing any duties as necessary for the Corporation and its Affiliates, as required by Law or legal process or to enforce the terms of this Agreement, such Person shall keep and retain in the strictest confidence and not disclose to any other Person any confidential information, acquired pursuant to this Agreement, of the Corporation or its controlled Affiliates or their successors. This Section 7.11 shall not apply to (i) any information that has been made publicly available by the Corporation or any of its controlled Affiliates, becomes public knowledge (except as a result of an act of any TRA Party in violation of this Agreement) or is generally known to the business community, (ii) the disclosure of information to the extent necessary for a TRA Party to prosecute or defend claims arising under or relating to this Agreement and (iii) the disclosure of information to the extent necessary for a TRA Party to prepare and file its Tax Returns, to respond to any inquiries regarding the same from any Taxing Authority or to prosecute or defend any action, proceeding or audit by any Taxing Authority with respect to such Tax Returns. Notwithstanding anything to the contrary herein, the TRA Parties and each of their assignees (and each employee, representative or other agent of the TRA Parties or their assignees, as applicable) may disclose at their discretion to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the Corporation, the TRA Parties and any of their transactions, and all materials of any kind (including tax opinions or other tax analyses) that are provided to the TRA Parties relating to such tax treatment and tax structure. If a TRA Party or an assignee commits, or threatens to commit, a breach of any of the provisions of this Section 7.11, the Corporation shall have the right and remedy to have the provisions of this Section 7.11 specifically enforced by injunctive relief or otherwise by any court of competent jurisdiction without the need to post any bond or other security, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Corporation or any of its controlled Affiliates and that money damages alone will not provide an adequate remedy to such Persons. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available at Law or in equity.

 

 

Section 7.11.        Change in Law. Notwithstanding anything herein to the contrary, if, in connection with an actual or proposed change in Law, a TRA Party reasonably believes that the existence of this Agreement could cause income (other than income arising from receipt of a payment under this Agreement) recognized by such TRA Party (or direct or indirect equity holders in such TRA Party) in connection with any Exchange to be treated as ordinary income (other than with respect to assets described in Section 751(a) of the Code) rather than capital gain (or otherwise taxed at ordinary income rates) for U.S. federal income tax purposes or would have other material adverse tax consequences to such TRA Party or any direct or indirect owner of such TRA Party, then, at the written election of such TRA Party in its sole discretion (in an instrument signed by such TRA Party and delivered to the Corporation) and to the extent specified therein by such TRA Party, this Agreement shall cease to have further effect and shall not apply to an Exchange occurring after a date specified by such TRA Party; provided, for the avoidance of doubt, such voluntary termination of rights by a TRA Party shall not result in or cause a termination or acceleration event under Section 4.1.

 

Section 7.12.        Interest Rate Limitation. Notwithstanding anything to the contrary contained herein, the interest paid or agreed to be paid hereunder with respect to amounts due to any TRA Party hereunder shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If any TRA Party shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the applicable payment (but in each case exclusive of any component thereof comprising interest) or, if it exceeds such unpaid non-interest amount, refunded to the Corporation. In determining whether the interest contracted for, charged or received by any TRA Party exceeds the Maximum Rate, such TRA Party may, to the extent permitted by applicable Law, (i) characterize any payment that is not principal as an expense, fee or premium rather than interest, (ii) exclude voluntary prepayments and the effects thereof or (iii) amortize, prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the payment obligations owed by the Corporation to such TRA Party hereunder. Notwithstanding the foregoing, it is the intention of the Parties to conform strictly to any applicable usury Laws.

 

Section 7.13.        Independent Nature of Rights and Obligations. The rights and obligations of each TRA Party hereunder are several and not joint with the rights and obligations of any other Person. A TRA Party shall not be responsible in any way for the performance of the obligations of any other Person hereunder, nor shall a TRA Party have the right to enforce the rights or obligations of any other Person hereunder (other than obligations of the Corporation). The obligations of a TRA Party hereunder are solely for the benefit of, and shall be enforceable solely by, the Corporation. Nothing contained herein or in any other agreement or document delivered in connection herewith, and no action taken by any TRA Party pursuant hereto or thereto, shall be deemed to constitute the TRA Parties acting as a partnership, association, joint venture or any other kind of entity, or create a presumption that the TRA Parties are in any way acting in concert or as a group with respect to such rights or obligations or the transactions contemplated by this Agreement.

 

 

Section 7.14.        Tax Characterization. The Parties intend that (i) each (A) Exchange, (B) payment made under this Agreement (except with respect to amounts that constitute Imputed Interest) to an Exchange TRA Party in connection with an Exchange, the Mergers or the Common Unit Contribution, (C) each distribution (or deemed distribution) from XERC to an Exchange TRA Party that may reasonably be treated as a transaction between the Corporation and the Exchange TRA Party pursuant to Section 707(a)(2)(B) of the Code (or any similar provisions of applicable state or local tax Law) shall give rise to Basis Adjustments, (ii) the rights received and (without duplication) payments (except with respect to amounts that constitute Imputed Interest) made, in each case, in respect of the Common Units acquired by the Corporation from the Exchange TRA Parties in the Common Unit Contribution (or any similar future contribution qualifying under Section 351 of the Code) will be treated as other property or money received for purposes of Section 351(b) of the Code and (iii) Tax Benefit Payments (other than Tax Benefit Payments treated as Imputed Interest thereon) made to the Blocker Shareholders in respect of such TRA Party’s interest in such Blocker Company shall be treated as other property or money received by reason of the Mergers under Section 356 and not be treated as a payment that has the effect of a distribution of a dividend in excess of such TRA Party’s “ratable share of the undistributed earnings and profits” (within the meaning of Treasury Regulations Section 1.356-a(c)(l)) of the applicable Blocker Company as of the date of the Mergers; provided, however, that no Party shall be unreasonably impeded in its ability and discretion to negotiate, compromise and/or settle any tax audit, claim or similar proceedings in connection with such position. To the extent this Agreement imposes obligations on XERC or a member of XERC, this Agreement shall be treated as part of the Operating Agreement as described in Section 761(c) of the Code and Treasury Regulations Sections 1.761-1(c) and 1.704-1(b)(2)(ii)(h).

 

[Signature Page Follows this Page]

 

 

IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Agreement as of the date first written above.

 

CORPORATION:

 

	X-ENERGY, INC.
	By:
	Name:
	Title:

 

XERC:

 

	X-ENERGY REACTOR COMPANY, LLC
	By:
	Name:
	Title:

 

[Signature Page to Tax Receivable Agreement]

 

 

TRA PARTIES:

 

	ACIP Investments Pooling LLC - Series 31
	By:
	Name:
	Title:

 

	ARES X-ENERGY CO-INVEST LP
	By:
	Name:
	Title:

 

	ARES X-ENERGY HOLDINGS LP
	By:
	Name:
	Title:

 

	GHAFFARIAN ENTERPRISES, LLC
	By:
	Name:
	Title:

 

	GM ENTERPRISES, LLC
	By:
	Name:
	Title:

 

	IBX COMPANY OPPORTUNITY FUND 1, LP
	By:
	Name:
	Title:

 

	IBX COMPANY OPPORTUNITY FUND 2, LP
	By:
	Name:
	Title:

 

	IBX OPPORTUNITY GP, INC.
	By:
	Name:
	Title:

 

	IBX X-ENERGY SPV I, LLC
	By:
	Name:
	Title:

 

	KAMAL GHAFFARIAN
	By:
	Name:
	Title:

 

	X-ENERGY HOLDINGS, LLC
	By:
	Name:
	Title:

 

	X-ENERGY KG PARENT, LLC
	By:
	Name:
	Title:

 

	JANE STREET GLOBAL TRADING, LLC
	By:
	Name:
	Title:

 

	XENON REACTOR COMPANY HOLDCO LLC
	By:
	Name:
	Title:

 

[Signature Page to Tax Receivable Agreement]

 

 

Exhibit C

 

FORM OF JOINDER AGREEMENT

 

This JOINDER AGREEMENT, dated as of _______________, 20___ (this “Joinder”), is delivered pursuant to that certain Tax Receivable Agreement, dated as of [ · ] (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Tax Receivable Agreement”), by and among X-energy, Inc., a Delaware corporation (the “Corporation”), X-energy Reactor Company, LLC, a Delaware limited liability company (the “LLC”), and each of the TRA Parties from time to time party thereto. Capitalized terms used but not otherwise defined herein have the respective meanings set forth in the Tax Receivable Agreement.

 

1.

Joinder to the Tax Receivable Agreement. The undersigned hereby represents and warrants to the Corporation that, as of the date hereof, the undersigned has been assigned an interest in the Tax Receivable Agreement from a TRA Party.

 

2.

Joinder to the Tax Receivable Agreement. Upon the execution of this Joinder by the undersigned and delivery hereof to the Corporation, the undersigned hereby is and hereafter will be a TRA Party under the Tax Receivable Agreement, with all the rights, privileges and responsibilities of a party thereunder. The undersigned hereby agrees that it shall comply with and be fully bound by the terms of the Tax Receivable Agreement as if it had been a signatory thereto as of the date thereof.

 

3.

Incorporation by Reference. All terms and conditions of the Tax Receivable Agreement are hereby incorporated by reference in this Joinder as if set forth herein in full.

 

4.

Address. All notices under the Tax Receivable Agreement to the undersigned shall be direct to:

 

[Name]

[Address]

[City, State, Zip Code]

Attn:

Facsimile:

E-mail:

 

[Signature Page Follows this Page]

 

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Joinder as of the day and year first above written.

 

	[NAME OF NEW TRA PARTY]
	By
		Name:
		Title:

 

Acknowledged and agreed
as of the date first set forth above:

 

X-ENERGY, INC.
By
	Name:
	Title:

 

[Signature Page to Joinder to Tax Receivable Agreement]

 

 

 

Exhibit 10.14

 

FOURTH AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT

 

THIS FOURTH AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made as of                     , 2026, by and among X-Energy, Inc., a Delaware corporation (the “Corporation”), each of the investors listed on Schedule A to this Agreement, each of which is referred to in this Agreement as an “Holder” and any additional investor that becomes a party to this Agreement in accordance with Section 2.12 of this Agreement.

 

RECITALS:

 

A.            The Corporation is contemplating an offer and sale of its shares of Class A common stock, par value $0.0001 per share (the “Class A Common Stock” and such shares, the “Shares”), to the public in an underwritten initial public offering (the “IPO”).

 

B.            The Corporation desires to use a portion of the net proceeds from the IPO to purchase Common Units (as defined below) of X Energy Reactor Company, LLC, a Delaware limited liability company (the “Company”), and the Company desires to issue its Common Units to the Corporation in exchange for such portion of the net proceeds from the IPO.

 

C.            Immediately prior to the consummation of the issuance of Common Units by the Company to the Corporation, the Holders and certain other Persons that hold equity interests in the Company are the sole members of the Company (the Holders, together with such other Persons, the “Original Equity Owners”).

 

D.            Certain of the Original Equity Owners (the “Existing Holders”) hold Series B Preferred Units, Series C Preferred Units, Series C-1 Preferred Units, Series D Preferred Units and/or Class A Common Units issued upon conversion thereof and possess registration rights pursuant to that certain Third Amended and Restated Registration Rights Agreement, dated as of November 21, 2025, by and among the Company, such Existing Holders and the other parties named as parties to such agreement (the “Prior Agreement”).

 

E.            Prior to the purchase by the Corporation of the Common Units, the Corporation, the Company and the Original Equity Owners will enter into that certain Eighth Amended and Restated Limited Liability Company Agreement of the Company (such agreement, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “LLC Agreement”).

 

F.            In connection with the closing of the IPO, (i) the Corporation will become the sole managing member of the Company, (ii) under the LLC Agreement, the Preferred Units and other equity interests held by the Original Equity Owners prior to such time will be recapitalized into Common Units (as defined in the LLC Agreement, the “Common Units”) of the Company, (iii) each Person identified on the Schedule of Holders attached hereto as a “Holder” and certain other Existing Holders will remain or become non-managing members of the Company, but otherwise continue to hold Common Units in the Company (such persons, collectively, the “Continuing Equity Owners”), and (iv) in consideration of the Corporation acquiring the Common Units and becoming the managing member of the Company and for other good consideration, the Company has provided the Continuing Equity Owners with a redemption right pursuant to which the Continuing Equity Owners can redeem their Common Units for, at the Corporation’s option, shares of Class A Common Stock or cash on the terms set forth in the LLC Agreement.

 

 

G.            In connection with the IPO and the transactions described above, the Corporation has agreed to grant to the Holders certain rights with respect to the registration of the Registrable Securities (as defined below) on the terms and conditions set forth in this Agreement.

 

H.            The Existing Holders are holders of at least a majority of the Registrable Securities (as defined below), at least a majority of the Series B Preferred Units and at least a majority of the Series C Preferred Units, the Series C-1 Preferred Units, and the Series D Preferred Units, and desire to amend and restate the Prior Agreement in its entirety and to accept the rights created pursuant to this Agreement in lieu of the rights granted to them under the Prior Agreement.

 

The Existing Holders agree that the Prior Agreement is amended and restated in its entirety by this Agreement, and the parties to this Agreement further agree as follows:

 

1.            Definitions. For purposes of this Agreement:

 

1.1            “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer, director or trustee of such Person, or any venture capital fund, investment fund or registered investment company now or hereafter existing that is controlled by one or more general partners, managing members or investment advisers of, or shares the same management company or investment adviser with, such Person. Notwithstanding the foregoing, the Corporation and its Subsidiaries shall not be deemed to be Affiliates of any Holder. As used in this definition, “control” (including, with its correlative meanings, “controlling,” “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, by contract or otherwise).

 

1.2            “Agreement” has the meaning set forth in the recitals.

 

1.3            “Amazon” means Amazon.com NV Investment Holdings LLC and its Affiliates.

 

1.4            “Ares” means Ares X-Energy Holdings LP and its Affiliates.

 

1.5            “Automatic Shelf Registration Statement” has the meaning set forth in Section 2.1(b).

 

1.6            “Board of Directors” means the board of directors of the Corporation.

 

1.7            “Black Out Period” has the meaning set forth in Section 4.

 

1.8            “Business Day” means any day of the year on which national banking institutions in New York are open to the public for conducting business and are not required or authorized to close.

 

1.9            “C5” means, collectively, C5 Energy Investors LLC, C5 Impact HPW LLC and their respective Affiliates.

 

1.10          “Capital Stock” means (i) with respect to any Person that is a corporation, any and all shares, interests or equivalents in capital stock of such corporation (whether voting or nonvoting and whether common or preferred), (ii) with respect to any Person that is not a corporation, individual or governmental entity, any and all partnership, membership, limited liability company or other equity interests of such Person that confer on the holder thereof the right to receive a share of the profits and losses of, or the distribution of assets of the issuing Person, and (iii) any and all warrants, rights (including conversion and exchange rights) and options to purchase any security described in the clause (i) or (ii) above.

 

 

1.11          “Class A Common Stock” has the meaning set forth in the recitals.

 

1.12          “Class B Common Stock” means the Corporation’s Class B common stock, par value $0.0001 per share.

 

1.13          “Common Units” has the meaning set forth in the recitals.

 

1.14          “Company” has the meaning set forth in the recitals.

 

1.15          “Continuing Equity Owners” has the meaning set forth in the recitals.

 

1.16          “Corporation” has the meaning set forth in the recitals.

 

1.17          “Damages” means any loss, damage, claim or liability (joint or several) to which a party to this Agreement may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Corporation, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

1.18          “End of Suspension Notice” has the meaning set forth in Section 2(c)(i).

 

1.19          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

1.20          “Excluded Registration” means (i) registrations on Form S-4 or S-8 promulgated by the Commission or any successor or similar forms, including a registration relating to the sale or grant of securities to employees of the Corporation or a subsidiary pursuant to an equity interest option, equity interest purchase, equity incentive or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only Class A Common Units being registered is Class A Common Stock issuable upon conversion of debt securities that are also being registered.

 

1.21          “FINRA” means the Financial Industry Regulatory Authority.

 

1.22          “Free Writing Prospectus” means the free writing prospectus, as defined in Rule 405.

 

1.23          “Form S-1” means such form under the Securities Act as in effect on the date of this Agreement or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

 

1.24          “Form S-3” means such form under the Securities Act as in effect on the date of this Agreement or any registration form under the Securities Act subsequently adopted by the SEC that permits forward incorporation of substantial information by reference to other documents filed by the Corporation with the SEC.

 

1.25          “Holder” has the meaning set forth in the recitals and any Person that is a party to this Agreement from time to time, as set forth on the signature pages to this Agreement or by virtue of signing a joinder to this Agreement.

 

1.26          “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, domestic partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including, adoptive relationships, of a natural person referred to in this Agreement.

 

1.27          “Indemnified Party” has the meaning set forth in Section 2.10.

 

1.28          “Indemnifying Party” has the meaning set forth in Section 2.10.

 

1.29          “Initiating Holders” means, collectively, Holders who properly initiate a registration request under Section 2.1(a) and 2.1(b) of this Agreement.

 

1.30          “IPO” has the meaning set forth in the recitals.

 

1.31          “Jane Street” means Jane Street Global Trading, LLC and its Affiliates.

 

1.32          “LLC Agreement” has the meaning set forth in the recitals.

 

1.33          “Long-Form Registrations” has the meaning set forth in Section 2.1(a).

 

1.34          “Majority of the Registrable Securities” means, with respect to any group of Registrable Securities described in this Agreement, the Holders of a majority of such group of Registrable Securities.

 

1.35          “MNPI” means material non-public information within the meaning of Regulation FD promulgated under the Exchange Act.

 

1.36          “Original Equity Owners” has the meaning set forth in the recitals.

 

1.37          “Person” means any individual, corporation, partnership, limited liability company, association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof, or other entity.

 

1.38          “Piggyback Registration” has the meaning set forth in Section 2.2.

 

1.39          “Preferred Units” means, collectively, units of the Series A Preferred Units, Series A-1 Preferred Units, Series B Preferred Units, Series C Preferred Units, Series C-1 Preferred Units and Series D Preferred Units of the Company.

 

1.40          “Public Offering” means any sale or distribution to the public of Capital Stock of the Corporation pursuant to an offering registered under the Securities Act, whether by the Corporation, by Holders and/or by any other holders of the Corporation’s Capital Stock.

 

 

1.41          “Registrable Securities” means (i) any Class A Common Stock issued or issuable by the Corporation in a Share Settlement in connection with (x) the redemption by the Company of Common Units owned by any Holder or (y) a direct exchange for Common Units owned by any Holder, in each case in accordance with the terms of the LLC Agreement; (ii) any Capital Stock of the Corporation or of any Subsidiary of the Corporation issued or issuable with respect to the securities referred to in clause (i) above or (iii) below by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization or similar transaction; and (iii) any other Shares owned (or which may be acquired upon exercise, redemption or conversion of any securities held), directly or indirectly, by Holders. As to any particular Registrable Securities owned by any Person, such securities shall cease to be Registrable Securities on the date such securities (a) have been sold or distributed pursuant to a Public Offering, (b) have been sold in compliance with Rule 144 following the consummation of the IPO, (c) have been repurchased by the Corporation or a Subsidiary of the Corporation or (d) may be disposed of pursuant to Rule 144 in a single transaction without volume limitation or other restrictions or limitations on transfer thereunder, including as to manner or timing of sale or current public information requirements. For purposes of this Agreement, a Person shall be deemed to be a Holder, and the Registrable Securities shall be deemed to be in existence, whenever such Person has the right to acquire, directly or indirectly, such Registrable Securities (upon conversion or exercise in connection with a transfer of securities or otherwise, but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected, and such Person shall be entitled to exercise the rights of a holder of Registrable Securities under this Agreement. Notwithstanding the foregoing, a Holder of Registrable Securities may only request that Registrable Securities in the form of Capital Stock of the Corporation that is registered or to be registered as a class under Section 12 of the Exchange Act be registered pursuant to this Agreement. For the avoidance of doubt, while Common Units and/or shares of Class B Common Stock constitute Registrable Securities, under no circumstances shall the Corporation be obligated to register Common Units or shares of Class B Common Stock, and only Shares issuable upon redemption, exchange or conversion of Common Units or Class B Common Stock will be registered.

 

1.42          “Registration Expenses” has the meaning set forth in Section 2.8.

 

1.43          “Schedule of Holders” means the schedule attached to this Agreement entitled “Schedule of Holders,” which shall reflect each Holder from time to time party to this Agreement.

 

1.44          “SEC” means the Securities and Exchange Commission.

 

1.45          “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

1.46          “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

1.47          “SEC Rule 158” means Rule 158 promulgated by the SEC under the Securities Act.

 

1.48          “SEC Rule 405” means Rule 405 promulgated by the SEC under the Securities Act.

 

1.49          “SEC Rule 415” means Rule 415 promulgated by the SEC under the Securities Act.

 

1.50          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

 

1.51          “Selling Expenses” means all underwriting discounts, selling commissions, and equity interest transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Corporation as provided in Section 2.8.

 

1.52          “Share Settlement” means “Share Settlement” as defined in the LLC Agreement.

 

1.53          “Shares” has the meaning set forth in the recitals.

 

1.54          “Shelf Offering” has the meaning set forth in Section 2.1(e)(ii).

 

1.55          “Shelf Offering Notice” has the meaning set forth in Section 2.1(e)(ii).

 

1.56          “Shelf Offering Request” has the meaning set forth in Section 2.1(e)(ii).

 

1.57          “Shelf Registrable Securities” has the meaning set forth in Section 2.1(e)(ii).

 

1.58          “Shelf Registration” has the meaning set forth in Section 2.1(e)(i).

 

1.59          “Shelf Registration Statement” has the meaning set forth in Section 2.1(e)(i).

 

1.60          “Short-Form Registrations” has the meaning set forth in Section 2.1(a).

 

1.61          “Subsidiary” means, with respect to the Corporation, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of Capital Stock of such Person entitled (without regard to the occurrence of any contingency) to vote in the election of directors is at the time owned or controlled, directly or indirectly, by the Corporation, or (ii) if a limited liability company, partnership, association or other business entity, either (x) a majority of the Capital Stock of such Person entitled (without regard to the occurrence of any contingency) to vote in the election of managers, general partners or other oversight board vested with the authority to direct management of such Person is at the time owned or controlled, directly or indirectly, by the Corporation or (y) the Corporation or one of its Subsidiaries is the sole manager or general partner of such Person.

 

1.62          “Suspension Event” has the meaning set forth in Section 2.1(c)(i).

 

1.63          “Suspension Notice” has the meaning set forth in Section 2.1(c)(i).

 

1.64          “Suspension Period” has the meaning set forth in Section 2.1(c)(i).

 

1.65          “Underwritten Takedown” has the meaning set forth in Section 2.1(e)(ii).

 

1.66          “Up-C Transaction” has the meaning ascribed to it in the LLC Agreement.

 

1.67          “WKSI” means a “well-known seasoned issuer” as defined under Rule 405.

 

1.68          “XHLLC” means XERC Holdings LLC and its Affiliates.

 

 

2.            Registration Rights. The Corporation covenants and agrees as follows:

 

2.1          Demand Registration. All registrations requested pursuant to this Section 2.1 are referred to herein as “Demand Registrations.”

 

(a)            Long-Form Registration. Subject to the terms and conditions of this Agreement and any lock-up agreement executed with the underwriters in connection with the IPO, if the Corporation receives a request from (i) Holders of at least a majority of the Registrable Securities then outstanding; or (ii) holders of at least a majority of the Registrable Securities held by Ares X-Energy Holdings LP (“Ares”) and its Affiliates; that the Corporation file a Form S-1 registration statement or any similar long-form registration (“Long-Form Registrations”) with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $10 million, then the Corporation shall (x) within 10 days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; and (y) as soon as practicable, and in any event within 60 days after the date such request is given by the Initiating Holders, file a Long-Form Registration under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Corporation within 20 days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c) and 2.3. Notwithstanding the foregoing, no more than two requests that the Corporation file a Long-Form Registration may be made by each of Ares and all other Holders collectively pursuant to this Section 2.1(a). All Long-Form Registrations shall be underwritten registrations unless otherwise approved by the applicable Original Equity Owner.

 

(b)            Short-Form Registration. If at any time when it is eligible to use a Form S-3 registration statement or any similar short-form registration (“Short-Form Registrations”), the Corporation receives a request from Holders of at least twenty percent (20%) of the Registrable Securities then outstanding that the Corporation file a Short-Form Registration with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $3 million, then the Corporation shall (i) within 10 days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within 45 days after the date such request is given by the Initiating Holders, file a Short-Form Registration under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Corporation within 20 days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c) and 2.3. Notwithstanding anything to the contrary contained in this Agreement, upon becoming eligible to use Form S-3 (or any equivalent or successor form), the Original Equity Owner making a Demand Registration may request that the registration be made pursuant to Rule 415 under the Securities Act (a “Shelf Registration”) and, if the Corporation is a WKSI at the time any request for a Demand Registration is submitted to the Corporation, that such Shelf Registration be an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “Automatic Shelf Registration Statement”). The Corporation shall use its commercially reasonable efforts to cause such registration statement to be declared effective by the SEC as soon as practicable and to keep such registration statement continuously effective under the Securities Act until the date when all of the Registrable Securities covered by such registration statement have been sold.

 

 

(c)            Notwithstanding the foregoing obligations, if the Corporation furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate signed by the Corporation’s chief executive officer stating that in the good faith judgment of the Board of Directors it would be materially detrimental to the Corporation and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because it would (i) reasonably be expected to have a material adverse effect on any proposal or plan by the Corporation or any Subsidiary to engage in any significant acquisition, corporate reorganization, or other similar transaction involving the Corporation; (ii) require premature disclosure of MNPI that the Corporation has a bona fide business purpose for preserving as confidential; or (iii) render the Corporation unable to comply with requirements under the Securities Act or Exchange Act, then the Corporation shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than 90 days after the request of the Initiating Holders is given (such period, the “Suspension Period”). Notwithstanding the foregoing, the Corporation may not invoke this right more than once in any 12 month period, except with the consent of each Original Equity Owner. Further notwithstanding the foregoing, the Corporation shall not register any securities for its own account or that of any other stockholder during such 90 day period. The Corporation also may extend the Suspension Period with the consent of each Original Equity Owner.

 

(i)            In the case of an event that causes the Corporation to suspend the use of a Shelf Registration Statement as set forth in paragraph (c) above (a “Suspension Event”), the Corporation shall give a Suspension Notice to the Holders of Registrable Securities registered pursuant to such Shelf Registration Statement to suspend sales of the Registrable Securities and such notice shall state generally the basis for the notice and that such suspension shall continue only for so long as the Suspension Event or its effect is continuing. If the basis of such suspension is nondisclosure of MNPI, the Corporation shall not be required to disclose the subject matter of such MNPI to Holders. A Holder shall not effect any sales of the Registrable Securities pursuant to such Shelf Registration Statement (or such filings) at any time after it has received a Suspension Notice from the Corporation and prior to receipt of an End of Suspension Notice (as defined below). Each Holder agrees that such Holder shall treat as confidential the receipt of the Suspension Notice and shall not disclose or use the information contained in such Suspension Notice without the prior written consent of the Corporation or until such time as the information contained therein is or becomes available to the public generally, other than as a result of disclosure by the Holder in breach of the terms of this Agreement. Holders may recommence effecting sales of the Registrable Securities pursuant to the Shelf Registration Statement (or such filings) following further written notice to such effect (an “End of Suspension Notice”) from the Corporation, which End of Suspension Notice shall be given by the Corporation to the Holders and their counsel, if any, promptly following the conclusion of any Suspension Event. Notwithstanding the foregoing, in no event shall an End of Suspension Notice be given after the end of the Suspension Period unless with the consent of each Original Equity Owner.

 

(ii)            Notwithstanding any provision of this Agreement to the contrary, if the Corporation gives a Suspension Notice with respect to any Shelf Registration Statement pursuant to this Section 2(c)(ii), the Corporation agrees that it shall (A) extend the period of time during which such Shelf Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from the date of receipt by the Holders of the Suspension Notice to and including the date of receipt by the Holders of the End of Suspension Notice, and (B) provide copies of any supplemented or amended prospectus necessary to resume sales, with respect to each Suspension Event. Notwithstanding the foregoing, such period of time shall not be extended beyond the date that there are no longer Registrable Securities covered by such Shelf Registration Statement.

 

 

(d)            The Corporation shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a) (i) during the period that is         days before the Corporation’s good faith estimate of the date of filing of, and ending on a date that is         days after the effective date of, a Corporation-initiated registration, so long as the Corporation is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Corporation has effected two registrations pursuant to Section 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Short-Form Registration pursuant to a request made pursuant to Section 2.1(b). The Corporation shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(b) (i) during the period that is         days before the Corporation’s good faith estimate of the date of filing of, and ending on a date that is         days after the effective date of, a Corporation-initiated registration so long as Corporation is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Corporation has effected two registrations pursuant to Section 2.1(b) within the 12 month period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Section 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Section 2.8, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 2.1(d). Notwithstanding the foregoing, if such withdrawal is during a period the Corporation has deferred taking action pursuant to Section 2.1(c), then the Initiating Holders may withdraw their request for registration and such registration will not be counted as “effected” for purposes of this Section 2.1(d). Each Holder agrees that such Holder shall treat as confidential the receipt of the notice of Demand Notice and shall not disclose or use the information contained in such notice of Demand Notice without the prior written consent of the Corporation or until such time as the information contained therein is or becomes available to the public generally, other than as a result of disclosure by the Holder in breach of the terms of this Agreement. Notwithstanding the foregoing, the Corporation shall not be required to take any action that would otherwise be required under this Section 2 or any similar provision contained in the underwriting agreement entered into in connection with any underwritten Public Offering.

 

(e)            Shelf Registrations.

 

(i)            Subject to the availability of required financial information, as promptly as practicable after the Corporation receives written notice of a request for a Shelf Registration, the Corporation shall file with the Commission a registration statement under the Securities Act for the Shelf Registration (a “Shelf Registration Statement”). The Corporation shall use its commercially reasonable efforts to cause any Shelf Registration Statement to be declared effective under the Securities Act as soon as practicable after the initial filing of such Shelf Registration Statement, and once effective, the Corporation shall cause such Shelf Registration Statement to remain continuously effective for such time period as is specified in the request by the Holders, but for no time period longer than the period ending on the earliest of (A) the third anniversary of the initial effective date of such Shelf Registration Statement, (B) the date on which all Registrable Securities covered by such Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement, and (C) the date as of which there are no longer any Registrable Securities covered by such Shelf Registration Statement in existence. In addition, notwithstanding anything to the contrary in this Agreement, the Corporation shall prepare a Shelf Registration Statement with respect to all of the Registrable Securities owned by or issuable to the Original Equity Owners and cause such Shelf Registration Statement to be filed and maintained with the Commission as soon as practicable and in no event later than the         calendar day following the later to occur of (i) the expiration of the Lock-Up Period (as defined below) and (ii) the Corporation becoming eligible to file a Shelf Registration Statement for a Short-Form Registration. Such Shelf Registration Statement shall provide for the resale, on a continuous or delayed basis pursuant to Rule 415 under the Securities Act, of all of the Registrable Securities owned by or issuable to the Original Equity Owners. The Corporation shall use its commercially reasonable efforts to cause such registration statement to be declared effective by the SEC as soon as practicable and to keep such registration statement continuously effective under the Securities Act until the date when all of the Registrable Securities covered by such registration statement have been sold. Notwithstanding the foregoing, any of the Original Equity Owners may, with respect to itself, instruct the Corporation in writing not to include in such Shelf Registration Statement the Registrable Securities owned by or issuable to such Holder. In order for any of the Original Equity Owners to be named as a selling securityholder in such Shelf Registration Statement, the Corporation may require such Holder to deliver all information about such Holder that is required to be included in such Shelf Registration Statement in accordance with applicable law, including Item 507 of Regulation S-K promulgated under the Securities Act. Notwithstanding anything to the contrary in this Agreement any Holder that is named as a selling securityholder in a Shelf Registration Statement may make a secondary resale under such Shelf Registration Statement without the consent of the Holders representing a Majority of the Registrable Securities or any other Holder if such resale does not require a supplement to the Shelf Registration Statement.

 

 

(ii)           In the event that a Shelf Registration Statement is effective, Holders representing Registrable Securities either (a) with a market value of at least $25 million in the aggregate, or (b) that represent at least 10% of the aggregate market value of the Registrable Securities registered pursuant to such Shelf Registration Statement shall have the right at any time or from time to time to elect to sell pursuant to an offering (including an underwritten offering (an “Underwritten Takedown”)) Registrable Securities available for sale pursuant to such registration statement (“Shelf Registrable Securities”), so long as the Shelf Registration Statement remains in effect, and the Corporation shall pay all Registration Expenses in connection therewith. Notwithstanding the foregoing, each Original Equity Owner shall have the right at any time and from time to time to elect to sell pursuant to an offering (including an Underwritten Takedown) pursuant to a Shelf Offering Request (as defined below) made by such Original Equity Owner. The applicable Holders shall make such election by delivering to the Corporation a written request (a “Shelf Offering Request”) for such offering specifying the number of Shelf Registrable Securities that such Holders desire to sell pursuant to such offering (the “Shelf Offering”). In the case of an Underwritten Takedown, as promptly as practicable, but no later than two Business Days after receipt of a Shelf Offering Request, the Corporation shall give written notice (the “Shelf Offering Notice”) of such Shelf Offering Request to all other holders of Shelf Registrable Securities. The Corporation, subject to Section 2.3 and Section 2.12 of this Agreement, shall include in such Shelf Offering the Shelf Registrable Securities of any other Holder that shall have made a written request to the Corporation for inclusion in such Shelf Offering (which request shall specify the maximum number of Shelf Registrable Securities intended to be sold by such Holder) within five Business Days after the receipt of the Shelf Offering Notice. The Corporation shall, as expeditiously as possible (and in any event within ten Business Days after the receipt of a Shelf Offering Request, unless a longer period is agreed to by the Holders representing a Majority of the Registrable Securities that made the Shelf Offering Request), use its commercially reasonable efforts to facilitate such Shelf Offering. Each Holder agrees that such Holder shall treat as confidential the receipt of the Shelf Offering Notice and shall not disclose or use the information contained in such Shelf Offering Notice without the prior written consent of the Corporation or until such time as the information contained therein is or becomes available to the public generally, other than as a result of disclosure by the Holder in breach of the terms of this Agreement.

 

(iii)          Notwithstanding the foregoing, if any Holder desires to effect a sale of Shelf Registrable Securities that (x) would require an amendment or supplement to the Shelf Registration Statement and (y) does not constitute an Underwritten Takedown, the Holder shall deliver to the Corporation a Shelf Offering Request no later than two Business Days prior to the expected date of the sale of such Shelf Registrable Securities, and subject to the limitations set forth in Section 2(d)(i), the Corporation shall file and effect an amendment or supplement to its Shelf Registration Statement for such purpose as soon as reasonably practicable.

 

 

(iv)          Notwithstanding the foregoing, if an Original Equity Owner wishes to engage in an underwritten block trade off of a Shelf Registration Statement (either through filing an Automatic Shelf Registration Statement or through a take-down from an existing Shelf Registration Statement), then notwithstanding the foregoing time periods, such Holders only need to notify the Corporation of the block trade Shelf Offering two Business Days prior to the day such offering is to commence (unless a longer period is agreed to by Holders representing a Majority of the Registrable Securities wishing to engage in the underwritten block trade) and the Corporation shall promptly notify other Holders and such other Holders must elect whether or not to participate by the next Business Day (i.e., one Business Day prior to the day such offering is to commence) (unless a longer period is agreed to by the Holders representing a Majority of the Registrable Securities wishing to engage in the underwritten block trade) and the Corporation shall as expeditiously as possible use its commercially reasonable efforts to facilitate such offering (which may close as early as two Business Days after the date it commences). Holders representing a Majority of the Registrable Securities wishing to engage in the underwritten block trade shall use commercially reasonable efforts to work with the Corporation and the underwriters prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the underwritten block trade.

 

(v)           The Corporation shall, at the request of Holders representing a Majority of the Registrable Securities covered by a Shelf Registration Statement, file any prospectus supplement or, if the applicable Shelf Registration Statement is an Automatic Shelf Registration Statement, any post-effective amendments and otherwise take any action necessary to include therein all disclosure and language deemed necessary or advisable by such Holders to effect such Shelf Offering.

 

2.2            Corporation Registration. Following the IPO, if the Corporation proposes to register (including, for this purpose, a registration effected by the Corporation for stockholders other than the Holders) any of its securities under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration) and the registration form to be used may be used for the registration of Registrable Securities (a “Piggyback Registration”), the Corporation shall, at such time, promptly give each Holder who hold Registrable Securities notice of its intention to effect such Piggyback Registration and, subject to the terms of Section 2.2(a), shall include in such Piggyback Registration (and in all related registrations or qualifications under blue sky laws and in any related underwriting) all Registrable Securities with respect to which the Corporation has received written requests for inclusion therein within twenty (20) days after delivery of the Corporation’s notice.

 

(a)            Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Corporation, and the managing underwriters advise the Corporation in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, the Corporation shall include in such registration (i) first, the securities the Corporation proposes to sell, (ii) second, the Registrable Securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect, pro rata among the Holders on the basis of the number of Registrable Securities owned by each such Holder that such Holder of Registrable Securities shall have requested to be included therein, and (iii) third, other securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect.

 

(b)            Selection of Underwriters. If any Piggyback Registration is an underwritten offering, the selection of investment banker(s) and manager(s) for the offering shall be at the election of the Corporation (in the case of a primary registration) or at the election of the holders of other Corporation securities requesting such registration (in the case of a secondary registration). Notwithstanding the foregoing, Holders representing a Majority of the Registrable Securities included in such Piggyback Registration may request that one or more investment banker(s) or manager(s) be included in such offering (such request not to be binding on the Corporation or such other initiating holders of Corporation securities).

 

 

(c)            Right to Terminate Registration. The Corporation shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 whether or not any Holder has elected to include securities in such registration. The Registration Expenses of such withdrawn registration shall be borne by the Corporation in accordance with Section 2.8.

 

2.3          Underwriting Requirements.

 

(a)            If, pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Corporation as a part of their request made pursuant to Section 2.1, and the Corporation shall include such information in the Demand Notice. The Holders initiating any Demand Registration representing a Majority of the Registrable Securities included in such Demand Registration shall have the right to select the investment banker(s) and manager(s) to administer the offering (including assignment of titles), subject to the Corporation’s approval not be unreasonably withheld, conditioned or delayed. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided in this Agreement.

 

(b)            If any Shelf Offering is an Underwritten Takedown, the investment banker(s) and manager(s) to administer the offering relating to such Shelf Offering (including assignment of titles) will be selected by the Corporation and shall be reasonably acceptable to the Holders representing a majority in interest of the Registrable Securities participating in such Underwritten Takedown.

 

(c)            All Holders proposing to distribute their securities through such underwriting shall (together with the Corporation as provided in Section 2.6(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding the foregoing, no Holder (or any of their assignees) shall be required to make any representations, warranties or indemnities except as they relate to such Holder’s ownership of shares and authority to enter into the underwriting agreement and to such Holder’s intended method of distribution, and the liability of such Holder shall be several and not joint, and limited to an amount equal to the net proceeds from the offering received by such Holder.

 

(d)            Notwithstanding any other provision of this Section 2.3, if the managing underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant to this Agreement, and the number of Registrable Securities that may be included in the underwriting shall be allocated (i) first, the Registrable Securities of Holders requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect, pro rata among the such Holders on the basis of the number of Registrable Securities owned by each such Holder that such Holder of Registrable Securities shall have requested to be included therein, (ii) second, other securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect, and (iii) third, securities the Corporation requested to be included in such registration for its own account which, in the opinion of the underwriters, can be sold without any such adverse effect. To facilitate the allocation of shares in accordance with the above provisions, the Corporation or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares.

 

 

(e)            In connection with any Public Offering pursuant to Section 2.2, the Corporation shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless such Holder (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Corporation (including, without limitation, pursuant to any over-allotment or “green shoe” option requested by the underwriters). Notwithstanding the foregoing, no Holder shall be required to sell more than the number of Registrable Securities such Holder has requested to include. Additionally, in connection with any Public Offering pursuant to Section 2.2, the Corporation shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless such Holder completes and executes all customary and reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, custody agreements and other documents required under the terms of such underwriting arrangements. If in connection with a Piggyback Offering the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Corporation) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Corporation shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Corporation in their sole discretion determine will not jeopardize the success of the offering.

 

(f)             If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders (i) first, the Registrable Securities of Holders requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect, pro rata among the such Holders on the basis of the number of Registrable Securities owned by each such Holder that such Holder of Registrable Securities shall have requested to be included therein, (ii) second, other securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect, and (iii) third, securities the Corporation requested to be included in such registration for its own account which, in the opinion of the underwriters, can be sold without any such adverse effect. To facilitate the allocation of shares in accordance with the above provisions, the Corporation or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Corporation) are first entirely excluded from the offering, or (ii) the number of Registrable Securities included in the offering be reduced below twenty percent (20%) of the total number of securities included in such offering, unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s equity interests are included in such offering. For purposes of the provision in this Section 2.3(f) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.

 

(g)            For purposes of Section 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Section 2.3, fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.

 

 

2.4          Suspended Distributions. Each Person that is participating in any registration under this Agreement, upon receipt of any notice from the Corporation of the happening of any event of the kind described in Section 2.6(i)(B) or (C), shall immediately discontinue the disposition of its Registrable Securities pursuant to the registration statement until such Person’s receipt of the copies of a supplemented or amended prospectus as contemplated by Section 2.6(i). In the event the Corporation has given any such notice, the applicable time period set forth in Section 2.6(b) during which a registration statement is to remain effective shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to this Section 2.4 to and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 2.6(i).

 

2.5          Lock-Up Agreements. In connection with the IPO, each Original Equity Owner (each a “Lock-Up Party”) has entered into a customary lock-up agreement with J.P. Morgan Securities LLC, as representative (the “Underwriter Representative”) of the several underwriters, pursuant to which each Lock-Up Party has agreed to certain restrictions relating to the shares of Capital Stock and certain other securities held by them (collectively, the “Lock-Up Restrictions”) during the period ending 180 days after the date of the final prospectus issued in connection with the IPO (such period, the “Lock-Up Period”). The Corporation may impose stop-transfer instructions with respect to the shares of Capital Stock and other securities subject to the Lock-Up Restrictions until the end of the Lock-Up Period. Notwithstanding anything to the contrary in this Agreement, each Original Equity Owner shall be entitled to waive its rights under this Agreement.

 

2.6          Obligations of the Corporation. Whenever required under this Section 2 to effect the registration of any Registrable Securities, use its commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Corporation shall, as expeditiously as reasonably possible:

 

(a)            prepare and file with the SEC (subject to the availability of required financial information) a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to 120 days or such longer period as required in accordance with the terms of this Agreement or, if earlier, until the distribution contemplated in the registration statement has been completed. Notwithstanding the foregoing, such 120 day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Class A Common Stock (or other securities) of the Corporation, from selling any securities included in such registration;

 

(b)            prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

 

(c)            furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

 

(d)            use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders. Notwithstanding the foregoing, the Corporation shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (B) consent to general service of process in any such jurisdiction or (C) subject itself to taxation in any such jurisdiction, except as may be required by the Securities Act;

 

 

(e)            in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

 

(f)            use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Corporation are then listed;

 

(g)            provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(h)            promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Corporation, and cause the Corporation’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(i)             notify each seller of such Registrable Securities (A) promptly after it receives notice thereof, of the date and time when such registration statement and each post-effective amendment thereto has become effective or a prospectus or supplement to any prospectus relating to a registration statement has been filed and when any registration or qualification has become effective under a state securities or blue sky law or any exemption thereunder has been obtained, (B) promptly after receipt thereof, of any request by the Commission for the amendment or supplementing of such registration statement or prospectus or for additional information and (C) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, subject to Section 2.3, at the request of any such seller, the Corporation shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading;

 

(j)             notify each holder of Registrable Securities of (A) the issuance by the Commission of any stop order suspending the effectiveness of any registration statement or the initiation of any proceedings for that purpose, (B) the receipt by the Corporation or its counsel of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (C) the effectiveness of each registration statement filed hereunder;

 

(k)            make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate and business documents and properties of the Corporation as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Corporation’s officers, directors, employees, agents, representatives and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement;

 

 

(l)             take all reasonable actions to ensure that any Free-Writing Prospectus utilized in connection with any Demand Registration or Piggyback Registration hereunder complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

(m)           otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;

 

(n)            to the extent that a Holder, in its sole and exclusive judgment, might be deemed to be an underwriter of any Registrable Securities or a controlling person of the Corporation, permit such Holder to participate in the preparation of such registration or comparable statement and allow such Holder to provide language for insertion therein, in form and substance satisfactory to the Corporation, which in the reasonable judgment of such Holder and its counsel should be included;

 

(o)            in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or the issuance of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Class A Common Stock included in such registration statement for sale in any jurisdiction, use reasonable efforts promptly to obtain the withdrawal of such order;

 

(p)            use its commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities;

 

(q)            cooperate with the Holders of Registrable Securities covered by the registration statement and the managing underwriter or agent, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement and enable such securities to be in such denominations and registered in such names as the managing underwriter, or agent, if any, or such Holders may request;

 

(r)            cooperate with each Holder of Registrable Securities covered by the registration statement and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

 

(s)            use its commercially reasonable efforts to make available the executive officers of the Corporation to participate with the Holders of Registrable Securities covered by the registration statement and any underwriters in any “road shows” or other selling efforts that may be reasonably requested by the Holders in connection with the methods of distribution for the Registrable Securities;

 

(t)            in the case of any underwritten Public Offering, use its commercially reasonable efforts to obtain one or more cold comfort letters from the Corporation’s independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the Holders representing a Majority of the Registrable Securities being sold reasonably request;

 

 

(u)            in the case of any underwritten Public Offering, use its commercially reasonable efforts to provide a legal opinion of the Corporation’s outside counsel, dated the closing date of the Public Offering, in customary form and covering such matters of the type customarily covered by legal opinions of such nature, which opinion shall be addressed to the underwriters and the Holders of such Registrable Securities being sold;

 

(v)            if the Corporation files an Automatic Shelf Registration Statement covering any Registrable Securities, use its commercially reasonable efforts to remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such Automatic Shelf Registration Statement is required to remain effective;

 

(w)            if the Corporation does not pay the filing fee covering the Registrable Securities at the time an Automatic Shelf Registration Statement is filed, pay such fee at such time or times as the Registrable Securities are to be sold; and

 

(x)            if the Automatic Shelf Registration Statement has been outstanding for at least three (3) years, at the end of the third year, file a new Automatic Shelf Registration Statement covering the Registrable Securities, and, if at any time when the Corporation is required to re-evaluate its WKSI status the Corporation determines that it is not a WKSI, use its reasonable efforts to refile the Shelf Registration Statement on Form S-3 and, if such form is not available, Form S-1 and keep such registration statement effective during the period during which such registration statement is required to be kept effective.

 

In addition, the Corporation shall ensure that, at all times after any registration statement covering a public offering of securities of the Corporation under the Securities Act shall have become effective, its insider trading policy shall provide that the Corporation’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act. Any officer of the Corporation who is a Holder agrees that if and for so long as he or she is employed by the Corporation or any Subsidiary thereof, he or she shall participate fully in the sale process in a manner customary and reasonable for persons in like positions and consistent with his or her other duties with the Corporation and in accordance with applicable law, including the preparation of the registration statement and the preparation and presentation of any road shows.

 

2.7          Obligations of the Holder.

 

(a)            Whenever the Holders have requested that any Registrable Securities be registered pursuant to this Agreement or have initiated a Shelf Offering, such Holders shall, if applicable, cause such Registrable Securities to be exchanged into shares of Class A Common Stock in accordance with the terms of the LLC Agreement prior to sale of such Registrable Securities.

 

(b)            It shall be a condition precedent to the obligations of the Corporation to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Corporation such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.

 

(c)            The Corporation may require each Holder requesting, or electing to participate in, any registration to furnish the Corporation such information regarding such Holder and the distribution of such Registrable Securities as the Corporation may from time to time reasonably request in writing.

 

 

(d)            If the Original Equity Owners or any of their respective Affiliates seek to effectuate an in-kind distribution of all or part of their respective Registrable Securities to their respective direct or indirect equityholders, the Corporation shall, subject to any applicable lock-ups, work with the foregoing persons to facilitate such in-kind distribution in the manner reasonably requested and such distributees shall have the right to become a party to this Agreement by the joinder in the form of Exhibit A hereto and thereby have all of the rights of such Original Equity Owners under this Agreement.

 

2.8          Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Corporation; and the reasonable fees and disbursements, not to exceed $75,000 per registration, of one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and paid by the Corporation. Notwithstanding the foregoing, the Corporation shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b), as the case may be then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

2.9          Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.10        Indemnification. If any Registrable Securities are included in a registration statement under this Section 2:

 

(a)            To the extent permitted by law, the Corporation will indemnify and hold harmless each selling Holder included in any registration, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Corporation will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred. Notwithstanding the foregoing, the indemnity agreement contained in this Section 2.10(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Corporation, which consent shall not be unreasonably withheld, nor shall the Corporation be liable for any Damages to the extent that (i) they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration, except to the extent such information has been corrected in a subsequent writing prior to the sale of Registrable Securities to the Person asserting the claim, or (ii) such Damages result solely from the failure of such Holder to deliver a copy of the registration statement, prospectus, offering circular or any amendments or supplements thereto after the Corporation has furnished such Holder with a sufficient number of copies thereof.

 

 

(b)            To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Corporation, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Corporation within the meaning of the Securities Act, legal counsel and accountants for the Corporation, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration and that has not been corrected in a subsequent writing prior to the sale of Registrable Securities to the Person asserting the claim; and each such selling Holder will pay to the Corporation and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred. Notwithstanding the foregoing, at the indemnity agreement contained in this Section 2.10(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld. In no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Section 2.10(b) and 2.10(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

 

(c)            Promptly after receipt by an indemnified party under this Section 2.10 (the “Indemnified Party”) of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification under this Agreement, such Indemnified Party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.10 (the “Indemnifying Party”), give the Indemnifying Party notice of the commencement thereof. The Indemnifying Party shall have the right to participate in such action and, to the extent the Indemnifying Party so desires, participate jointly with any other Indemnifying Party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties. Notwithstanding the foregoing, an Indemnified Party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such action. The failure to give notice to the Indemnifying Party within a reasonable time of the commencement of any such action shall relieve such Indemnifying Party of any liability to the Indemnified Party under this Section 2.10, to the extent that such failure materially prejudices the Indemnifying Party’s ability to defend such action. The failure to give notice to the Indemnifying Party will not relieve it of any liability that it may have to any Indemnified Party otherwise than under this Section 2.10.

 

(d)            To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification under this Agreement makes a claim for indemnification pursuant to this Section 2.10 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.10 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party to this Agreement for which indemnification is provided under this Section 2.10, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the Indemnifying Party and the Indemnified Party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. Notwithstanding the foregoing, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. In no event shall a Holder’s liability pursuant to this Section 2.10(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.10(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

 

(e)            Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. Notwithstanding anything to the contrary in this Agreement, the foregoing provisions shall control as to any matter provided for or addressed thereby that is not provided for or addressed by the underwriting agreement.

 

(f)             Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Corporation and Holders under this Section 2.10 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement or any provision(s) of this Agreement.

 

2.11        Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Corporation to the public without registration or pursuant to a registration on Form S-3 (or any successor form), the Corporation shall:

 

(a)            make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Corporation for the IPO;

 

(b)            use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Corporation under the Securities Act and the Exchange Act (at any time after the Corporation has become subject to such reporting requirements); and

 

(c)            furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Corporation that it has complied with the reporting requirements of SEC Rule 144 (at any time after 90 days after the effective date of the registration statement filed by the Corporation for the IPO), the Securities Act, and the Exchange Act (at any time after the Corporation has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Long-Form Registration (at any time after the Corporation so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Corporation has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Corporation so qualifies to use such form).

 

 

2.12        Limitations on Subsequent Registration Rights; Joinder. From and after the date of this Agreement, the Corporation shall not, without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Corporation that would (i) provide to such holder or prospective holder the right to include securities in any registration on other than either a pro rata basis with respect to the Registrable Securities or on a subordinate basis after all Holders have had the opportunity to include in the registration and offering all shares of Registrable Securities that they wish to so include, (ii) allow such holder or prospective holder to include such securities in any registration unless, under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the number of the Registrable Securities of the Holders that are included, or (iii) allow such holder or prospective holder to initiate a demand for registration of securities held by such holder or prospective holder other than in compliance with Section 2.1(a). This limitation shall not apply to Registrable Securities acquired by any additional Holder that becomes a party to this Agreement in accordance with Section 2.12. The Corporation represents and warrants that it has not granted any Person other than the parties hereto the right to require the Corporation to initiate the registration of any securities or include in any registration any securities owned by such Person.

 

2.13         Restrictions on Transfer.

 

(a)            Notwithstanding anything to the contrary contained herein, except in the case of (i) a transfer to the Corporation, (ii) a transfer by any Original Equity Owner or any of its Affiliates to its respective equityholders, (iii) a Public Offering, (iv) a sale pursuant to Rule 144 after the completion of the IPO or (v) a transfer in connection with a sale of the Corporation, prior to transferring any Registrable Securities to any Person (including, without limitation, by operation of law), the transferring Holder shall cause the prospective transferee to execute and deliver to the Corporation a Joinder agreeing to be bound by the terms of this Agreement. Any transfer or attempted transfer of any Registrable Securities in violation of any provision of this Agreement shall be void, and the Corporation shall not record such transfer on its books or treat any purported transferee of such Registrable Securities as the owner thereof for any purpose.

 

2.14        Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Sections 2.1 or 2.2 shall terminate upon the earliest to occur of:

 

(a)            the closing of a Deemed Liquidation Event (as defined in the LLC Agreement);

 

(b)            such time after consummation of the IPO as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without limitation during a three-month period without registration; or

 

(c)            the fifth anniversary of the IPO.

 

3.            MNPI Provisions.

 

3.1          Each Holder acknowledges that the provisions of this Agreement that require communications by the Corporation or other Holders to such Holder may result in such Holder and its Representatives (as defined below) acquiring MNPI (which may include, solely by way of illustration, the fact that an offering of the Corporation’s securities is pending or the number of Corporation securities or the identity of the selling Holders).

 

 

3.2          Each Holder agrees that it will maintain the confidentiality of such MNPI and, to the extent such Holder is not a natural person, such confidential treatment shall be in accordance with procedures adopted by it in good faith to protect confidential information of third parties delivered to such Holder (“Policies”). Notwithstanding the foregoing, a holder may deliver or disclose MNPI to (i) its directors, officers, employees, agents, attorneys, affiliates and financial and other advisors (collectively, the “Representatives”), but solely to the extent such disclosure reasonably relates to its evaluation of exercise of its rights under this Agreement and the sale of any Registrable Securities in connection with the subject of the notice, (ii) any federal or state regulatory authority having jurisdiction over such Holder, (iii) any Person if necessary to effect compliance with any law, rule, regulation or order applicable to such Holder, (iv) in response to any subpoena or other legal process, or (v) in connection with any litigation to which such Holder is a party. Further notwithstanding the foregoing, in the case of clause (i) of the prior sentence, the recipients of such MNPI are subject to the Policies or are informed of the confidentiality obligations regarding MNPI in a offset forth in this Section 3.2 and that in the case of clauses (ii) through (v) of the prior sentence, such disclosure is required by law and such Holder shall promptly notify the Corporation of such disclosure to the extent such Holder is legally permitted to give such notice.

 

Each Holder shall have the right, at any time and from time to time (including after receiving information regarding any potential Public Offering), to elect to not receive any notice that the Corporation or any other Holders otherwise are required to deliver pursuant to this Agreement by delivering to the Corporation a written statement signed by such Holder that it does not want to receive any notices hereunder (an “Opt-Out Request”); in which case and notwithstanding anything to the contrary in this Agreement the Corporation and other Holders shall not be required to, and shall not, deliver any notice or other information required to be provided to Holders hereunder to the extent that the Corporation or such other Holders reasonably expect would result in a Holder acquiring MNPI. An Opt-Out Request may state a date on which it expires or, if no such date is specified, shall remain in effect indefinitely. A Holder who previously has given the Corporation an Opt-Out Request may revoke such request at any time, and there shall be no limit on the ability of a Holder to issue and revoke subsequent Opt-Out Requests. Each Holder shall use commercially reasonable efforts to minimize the administrative burden on the Corporation arising in connection with any such Opt-Out Requests.

 

4.            Black-Out Periods. Notwithstanding anything in this Section 4 to the contrary, if the Corporation shall furnish to the Holders initiating a registration pursuant to Section 2.1 or 2.2 of this Agreement a certificate signed by the President or Chief Executive Officer of the Corporation stating that the Corporation’s board of directors has made the good faith determination (after consultation with counsel) (i) that use by the Holders of such proposed registration statement for purposes of effecting offers or sales of Registrable Securities pursuant thereto would require, under the Securities Act, premature disclosure in such registration statement of material, nonpublic information concerning any proposed material transaction involving the Corporation; (ii) that such premature disclosure would be materially adverse to the Corporation or such proposed material transaction or would make the successful consummation by the Corporation of any such material transaction significantly less likely; and (iii) that it is therefore essential to defer the filing of such registration statement for purposes of effecting offers or sales of Registrable Securities pursuant thereto, then the right of the Holders to require the Corporation to file such registration statement for purposes of effecting offers or sales of Registrable Securities pursuant thereto shall be suspended for a period (the “Black Out Period”) of not more than 60 days after delivery by the Corporation of the certificate referred to above. Notwithstanding the foregoing, (A) if the public announcement of such material transaction is made during a Black Out Period, then the Black Out Period shall terminate without any further action of the parties and the Corporation shall immediately notify such Holders of such termination, and (B) the Corporation may not exercise the right to initiate a Black Out Period more than once in any twelve month period.

 

 

5.            Miscellaneous.

 

5.1          Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (a) is an Affiliate of a Holder; (b) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (c) after such transfer, holds at least 100,000 shares of Registrable Securities (subject to appropriate adjustment for equity interest splits, equity interest dividends, combinations, and other recapitalizations). Notwithstanding the foregoing, (x) the Corporation is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Corporation to be bound by and subject to the terms and conditions of this Agreement. For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of a transferee (i) that is an Affiliate or stockholder of a Holder; (ii) who is a Holder’s Immediate Family Member; or (iii) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those of the transferring Holder. Further notwithstanding the foregoing, all transferees who would not qualify individually for assignment of rights shall, as a condition to the applicable transfer, establish a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties to this Agreement or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

5.2          Business Days. If any time period for giving notice or taking action hereunder expires on a day that is not a business day, the time period shall automatically be extended to the immediately following business day.

 

5.3          Governing Law. This Agreement shall be governed by the internal law of the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.

 

5.4          Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, the Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

5.5          Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

 

5.6          No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.

 

 

5.7          Notices.

 

(a)            All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth on Schedule A to this Agreement, or to the principal office of the Corporation and to the attention of the Chief Executive Officer, in the case of the Corporation, or to such email address, or address as subsequently modified by written notice given in accordance with this Section 5.7. If notice is given to the Corporation, a copy (which shall not constitute notice) shall also be sent to Latham & Watkins LLP, 555 Eleventh Street, NW, Suite 1000, Washington, DC 20041, Attention: Paul Sheridan.

 

(b)            Consent to Electronic Notice. Each Holder consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by electronic transmission pursuant to Section 232 of the DGCL (or any successor thereto) at the electronic mail address set forth below such Holder’s name on the Schedules to this Agreement, as updated from time to time by notice to the Corporation, or as on the books of the Corporation. To the extent that any notice given by means of electronic transmission is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected electronic mail address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each Holder agrees to promptly notify the Corporation of any change in such stockholder’s electronic mail address, and that failure to do so shall not affect the foregoing.

 

5.8          Amendments and Waivers. Any term of this Agreement may be amended, modified or terminated and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Corporation and the holders of a majority of the Registrable Securities then outstanding. Notwithstanding the foregoing, no such amendment, modification, termination or waiver that would materially and adversely affect a Holder in a manner materially different than any other Holder, shall be effective against such Holder without the consent of such Holder that is materially and adversely affected thereby. Notwithstanding the foregoing, this Agreement may not be amended, modified or terminated and the observance of any term of this Agreement may not be waived with respect to any Holder without the written consent of such Holder, unless such amendment, modification, termination, or waiver applies to all Holders in the same fashion. Notwithstanding the foregoing, Schedule A to this Agreement may be amended by the Corporation from time to time to add transferees of any Registrable Securities in compliance with the terms of this Agreement without the consent of the other parties; and Schedule A to this Agreement may also be amended by the Corporation after the date of this Agreement without the consent of the other parties to add information regarding any additional Holder who becomes a party to this Agreement in accordance with Section 2.12. The Corporation shall give prompt notice of any amendment, modification or termination of this Agreement or waiver under this Agreement to any party to this Agreement that did not consent in writing to such amendment, modification, termination, or waiver. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

 

5.9          Remedies. The parties to this Agreement shall be entitled to enforce their rights under this Agreement specifically (without posting a bond or other security), to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that a breach of this Agreement would cause irreparable harm and money damages would not be an adequate remedy for any such breach and that, in addition to any other rights and remedies existing hereunder, any party shall be entitled to specific performance and/or other injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or other security) in order to enforce or prevent violation of the provisions of this Agreement.

 

5.10        Severability. In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

 

5.11        Entire Agreement. Upon the effectiveness of this Agreement, the Prior Agreement shall be deemed amended and restated and superseded and replaced in its entirety by this Agreement and shall be of no further force or effect. This Agreement (including any Schedules and Exhibits to this Agreement) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter of this Agreement, and any other written or oral agreement relating to the subject matter of this Agreement existing between the parties is expressly canceled.

 

5.12        Dispute Resolution. The parties (a) irrevocably and unconditionally submit to the jurisdiction of the state courts of the State of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of the State of Delaware or the United States District Court for the District of Delaware, and (c) waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter of this Agreement may not be enforced in or by such court.

 

(a)            WAIVER OF JURY TRIAL: EACH PARTY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER OF THIS AGREEMENT OR OF THE TRANSACTION DOCUMENTS AND THE SECURITIES. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES TO THIS AGREEMENT AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY TO THIS AGREEMENT FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

 

5.13        No Recourse. Notwithstanding anything to the contrary in this Agreement, the Corporation and each Holder agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement, shall be had against any current or future director, officer, employee, general or limited partner or member of any Holder or of any Affiliate or assignee thereof, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of any Holder or any current or future member of any Holder or any current or future director, officer, employee, partner or member of any Holder or of any Affiliate or assignee thereof, as such for any obligation of any Holder under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

 

5.14        Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each Holder shall execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and the transactions contemplated hereby.

 

[Remainder of Page Intentionally Left Blank]

 

 

The parties have executed this Agreement as of the date first written above.

 

	CORPORATION:
	X-ENERGY, INC.
	By:
		Name:	Steven Miller
		Title:	Executive Vice President

 

 

The parties have executed this Agreement as of the date first written above.

 

	HOLDER:
	By:
		Name:
		Title:

 

 

Schedule A

 

HOLDERS

 

Name

Address

Email

 

 

EXHIBIT A

 

REGISTRATION RIGHTS AGREEMENT JOINDER

 

The undersigned is executing and delivering this Joinder pursuant to the Registration Rights Agreement dated as of _______________, 20__ (as the same may hereafter be amended, the “Registration Rights Agreement”), among X-Energy, Inc., a Delaware corporation (the “Corporation”), and the other person named as parties to the Registration Rights Agreement.

 

By executing and delivering this Joinder to the Corporation, and upon acceptance hereof by the Corporation upon the execution of a counterpart hereof, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the provisions of the Registration Rights Agreement as a Holder of Registrable Securities in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement, and the undersigned’s shares of Class A Common Stock (or shares of Class A Common Stock to be issued upon the conversion of the undersigned’s shares of Class B Common Stock) shall be included as Registrable Securities under the Registration Rights Agreement to the extent provided in the Registration Rights Agreement. The Corporation is directed to add the address below the undersigned’s signature on this Joinder to the Schedule of Holders attached to the Registration Rights Agreement.

 

Accordingly, the undersigned has executed and delivered this Joinder as of the day of _______________, 20__.

 

	Signature of Stockholder
	Print Name of Stockholder
	Its:
	Address:

 

Agreed and Accepted as of _______________, 20__

 

X-Energy, Inc.
By:
Name:
Its:

 

 

Exhibit 10.16

 

JOINT VENTURE AGREEMENT

 

THIS JOINT VENTURE AGREEMENT ("Agreement"), effective as of November 23, 2021 ("Effective Date"), is entered into by and between INTUITIVE MACHINES, LLC, a Texas limited liability company with offices at 3700 Bay Area Blvd.,#100, Houston, Texas 77058 ("IM") and X-ENERGY, LLC, a Maryland limited liability company with offices at 801 Thompson Avenue, Rockville, Maryland 20852 ("X-ENERGY"). IM and X-ENERGY are hereinafter sometimes referred to individually as a "Member" and collectively as the "Members."

 

WITNESSETH:

 

WHEREAS, the Government of the United States of America, acting through the National Aeronautics and Space Administration and Department of Energy ("Client") anticipates issuance of a request for proposals for selection of a funding award/contract for lunar Fission Surface Power ("FSP") as a Full and Open competitive procurement ("Solicitation"); and

 

WHEREAS, IM and X-ENERGY believe that, given IM's aerospace know-how and X-ENERGY's nuclear reactor and fuels expertise, formation of a joint venture ("Joint Venture") to submit a proposal in response to the Solicitation, and if awarded, to perform the resulting contract, will be to their mutual benefit, and in the best interest of the Client;

 

NOW, THEREFORE, in consideration of these mutual covenants and conditions and the other good and valuable consideration set forth herein, IM and X-ENERGY agree as follows.

 

1.0

Purpose

 

The purpose of the Joint Venture is to bid upon and, if successful, perform the contract awarded pursuant to the Solicitation ("Contract"), and to do any and all things necessary, and/or incidental to that purpose.

 

2.0	Limited Liability Company

 

The Joint Venture shall submit its proposal via IX, LLC, a Delaware limited liability company with offices at 3700 Bay Area Blvd., #100, Houston, Texas 77058 ("LLC"). This Agreement shall be subject to the Members' negotiation and execution of a Limited Liability Company Agreement, which shall contain terms and conditions consistent with the terms and conditions set forth in this Agreement, unless otherwise mutually agreed upon by the Members, and as further limited by Section 12.6 of this Agreement. The LLC shall register in SAM.gov and obtain a separate DUNS number. The LLC has obtained CAGE Code No. 8UU91.

 

 

3.0	Profit Interests

 

The Members shall share profits and losses in the Joint Venture in proportion to their Profit Interests. IM shall have a Profit Interest of fifty-one percent (51%) in the Joint Venture. X-ENERGY shall have a Profit Interest of forty-nine percent (49%) in the Joint Venture. Profit Interests in the Joint Venture shall not be subject to assignment or transfer without the approval of both Members. Should the FSP requirements result in a materially disproportionate share of the work being performed by one Member, and thus not reasonably reflective of the 51/49 Profit Interest split, the Members shall equitably adjust the Profit Interest to more reasonably reflect such disproportionate performance.

 

Each Member shall submit invoices to the LLC "at cost" and without fee. Fee will be billed to the Client at the LLC/Joint Venture level and shared by the Members in accordance with the Profit Interests set forth above.

 

4.0	Project Management

 

4.1            Joint Venture Committee. The Joint Venture shall be governed by a Joint Venture Committee, consisting of two (2) members appointed by IM, two (2) members appointed by X-ENERGY, and one (1) member appointed by IBX, LLC ("IBX"). Joint Venture Committee decisions shall be made by affirmative vote of the majority of Committee members, with the exception of extraordinary decisions identified herein that shall require unanimous approval of the Members.

 

4.2            Project Manager. The Joint Venture shall have a Project Manager, who shall be appointed by the Joint Venture Committee and be responsible for, among other things: (i) if a Contract is awarded to the LLC, day-to-day performance of the Contract, as well as negotiation of modifications and amendments to the Contract; and (ii) reporting to and implementing direction provided by the Joint Venture Committee.

 

5.0	Responsibilities

 

5.1            Proposal Efforts. The Joint Venture shall have a Capture Manager, who shall be appointed by the Joint Venture Committee and be the primary liaison with the Client during the proposal process. The Members shall work together in preparing proposal submissions in connection with the Solicitation. All proposal submissions shall be in the name of the LLC/Joint Venture and shall be approved and signed by both Members. Any decision to protest the award decision, or other procurement decision, shall also require approval of both Members. The Members shall approve the content of their respective proposal contributions submitted in connection with the Solicitation. Unless otherwise agreed, each Member shall be responsible for its own costs incurred in connection with proposal preparation efforts in response to the Solicitation.

 

5.2            IBX Capture and Proposal Services. Notwithstanding Section 5.1, IM and X-ENERGY agree that the reasonable fees of IBX and/or its consultants or affiliates in connection with capture and proposal preparation efforts shall be apportioned among them in proportion to their total proposed costs, as reflected in the final Phase I FSP cost proposal submitted in response to the Solicitation.

 

5.3            Negotiation of the Contract. The Project Manager shall be responsible for negotiating the Contract and any subsequent negotiation of task orders or modifications to the Contract.

 

 

5.4            Source of Labor. The Joint Venture shall be unpopulated and staffed with existing personnel of IM and X-ENERGY, and other individuals, as applicable. IM and X-ENERGY shall be responsible for their respective labor costs, which will be passed through to the LLC. If desired, the Members may mutually agree on an alternative staffing approach to improve the Joint Venture's competitive position. The Joint Venture may also utilize existing labor markets to maintain the necessary staffing throughout the duration of Contract performance.

 

5.5            Performance of Contract. The Project Manager shall perform the day-to-day management and administration of the Contract and shall have overall responsibility for performance, subject to oversight and direction of the Joint Venture Committee.

 

5.6            Service Agreements. The Joint Venture may enter into Service Agreements with individual Members and other third party providers for back-office and/or support services on terms and conditions set forth therein. All Service Agreements shall be subject to approval of the Joint Venture Committee.

 

5.7            Equipment and Facilities. Any equipment or facilities acquired by the Joint Venture will be held in the name of the Joint Venture and considered Joint Venture property.

 

6.0	Bank Account

 

An operating account in the name of the Joint Venture shall be established at a banking institution designated by the Joint Venture Committee. All receipts of the Joint Venture shall be deposited into the bank account, and all expenses of the Joint Venture shall be paid from the bank account. The Joint Venture Committee shall designate in writing the person or persons who may sign on behalf of the Joint Venture.

 

7.0	Accounting and Records

 

Accounting and other administrative records relating to the Joint Venture shall be kept in the offices of IM at 3700 Bay Area Blvd., #100, Houston, Texas 77058. Upon completion of the Contract or sooner termination of this Agreement, the final records of the Joint Venture will be retained by IM. X-ENERGY may inspect the records of the Joint Venture during normal business hours upon reasonable advance notice to IM.

 

8.0	Term and Termination

 

8.1            Term. The term of this Agreement shall commence on the Effective Date and, unless sooner terminated in accordance with the provisions hereof, or otherwise mutually agreed in writing, shall continue through completion and closeout of the Contract, including all options, modifications and extensions thereto.

 

8.2            Termination Based on Unsuccessful Proposal. This Agreement shall terminate upon occurrence of the any of the following events: (i) the inability of the Members to agree, despite good faith efforts, on the terms and conditions of an LLC Agreement; (ii) the inability of the Members to agree, despite good faith efforts, on a proposal to be submitted by the Joint Venture in response to the Solicitation; (iii) a final decision by the Client to cancel the Solicitation; or (iv) award of a Contract to an offeror other than the LLC and final resolution of any and all challenges upholding such award.

 

 

8.3            Termination for Cause. Either Member may terminate this Agreement if: (i) the other Member fails to correct and cure a material breach of this Agreement within thirty (30) days after receipt of written notice from the non-breaching Member describing the breach in reasonable detail, (ii) the other Member engages in illegal or criminal conduct in connection with performance of this Agreement; (iii) the other Member is suspended or debarred from doing business with the United States Government or otherwise becomes ineligible to perform the Contract for any reason; (iv) the other Member files, or has filed against it, a voluntary or involuntary petition in bankruptcy that is not dismissed within sixty (60) days; or (v) the other Member dissolves or ceases business operations for any reason. Termination hereunder shall be without prejudice to any rights or remedies that a Member may have under this Agreement or applicable law.

 

8.4            Force Majeure. Neither Member shall be liable for any delay or failure of performance caused by: (i) acts of God; (ii) fires; (iii) floods; (iv) epidemics or pandemics, including without limitation, COVID-19; (v) quarantine restrictions; (vi) strikes; (vii) freight embargoes; (viii) unusually severe weather; or (ix) any other circumstance beyond its reasonable control and without its fault or negligence.

 

9.0

Disputes

 

The Members shall submit any unresolved dispute arising out of or relating to this Agreement to the managing executive officer of each Member for resolution. If a dispute cannot be resolved by negotiation, it shall be submitted to the American Arbitration Association ("AAA") for arbitration under the Commercial Arbitration Rules before a single arbitrator. The arbitration shall take place in Delaware unless the Members agree to a different venue. This provision to arbitrate shall be specifically enforceable in any court of competent jurisdiction. The written decision of the arbitrator shall be final and conclusive on the Members and judgment thereon may be entered in a court of competent jurisdiction. The pendency of any arbitration proceeding shall not relieve either Member from continued performance in accordance with this Agreement.

 

10.0	Continued Performance

 

Each Member agrees to continue and complete performance of the Contract despite the withdrawal of the other Member.

 

11.0	Proprietary Information

 

The Nondisclosure Agreement between the Members dated November 23, 2021 is hereby incorporated into this Agreement by reference, and shall survive termination hereon in accordance with its terms.

 

 

12.0	Other Provisions

 

12.1          Entire Agreement. This Agreement, together with the LLC Agreement, embodies the complete agreement and understanding among the Members with respect to the subject matter hereof and supersedes any prior understandings, agreement, and representations, written or oral, by or among the Members related to the subject matter hereof.

 

12.2           Amendment. Any amendment to this Agreement shall not be effective unless it is in a writing executed by both Members.

 

12.3           Applicable Law. All questions concerning the construction, validity, and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the laws of the State of Delaware, exclusive of conflicts of law principles.

 

12.4          Assignment. Neither Member shall delegate or assign any of its rights, duties or responsibilities in and to this Agreement or any interest arising hereunder without the prior written consent of the other Member. Any attempted assignment in violation of this paragraph shall be null and void.

 

12.5          Severability. If any provision of this Agreement or part of such provision is or becomes invalid or unenforceable, then the remaining provisions hereof shall continue to be effective.

 

12.6           Precedence/Conflict. To the extent there is a conflict between the terms of this Agreement and those of the Limited Liability Company Agreement, the terms of this Agreement shall control.

 

12.7          Waivers. No waiver by a Member of any of its rights or remedies shall be construed as a waiver by such Member of any other rights or remedies that such Member may have under this Agreement.

 

12.8          Authority. The person signing below on behalf of each Member represents and warrants that he/she has the authority to execute this Agreement on behalf of such Member and bind such Member to the terms hereof.

 

12.9          Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which, when taken together, constitute one and the same document. The signature of any Member to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart. The Members agree to accept the authenticity of electronic signatures in lieu of originals.

 

 

IN WITNESS WHEREOF, the following authorized representatives of the Members have executed this Agreement as of the Effective Date.

 

INTUITIVE MACHINES, LLC			X-ENERGY, LLC
By:	/s/ Erik Sallee		By:	/s/ Steven L. Miller
Title:	Chief Financial Officer		Title:	Senior Vice President and General Counsel

 

IX, LLC
By:	/s/ Steve Altemus
Title:	President & CEO

 

 

 

Exhibit 10.17

 

 

 

Professional Services Agreement

 

No. 21-41

 

This Professional Services Agreement (“PSA” or “Agreement”), effective December 19, 2021 is made and entered into by and between X Energy, LLC (“X- energy”), a Maryland limited liability company, having an office at 801 Thompson Avenue, Suite 200, Rockville, MD, 20852 and IBX ("Company"), having an office at 801 Thompson Avenue, Suite 400, Rockville, MD, 20852.

 

WHEREAS X-energy wishes to secure Company’s performance of consulting and other professional services (“Project”) and;

 

WHEREAS, Company wishes to enter into an agreement with X-energy for the performance of said services in exchange for the fees set forth herein;

 

NOW THEREFORE, in consideration of the mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

I.       DESCRIPTION OF PROFESSIONAL SERVICES

 

Company shall provide to X-energy consulting and professional services (“Services”) subject to the Terms and Conditions attached hereto as Exhibit A. Services are described in specific Task Assignment Order(s).

 

II.       TASK ORDERS AND PURCHASE ORDERS

 

X-energy shall direct Company to perform services to be provided based on individual Purchase Order(s) issued by an authorized member of the X-energy Procurement Department. Any costs incurred by Company on behalf of X-energy without an authorized X-energy shall be borne by Company. The Company shall provide all resources necessary to deliver and/or perform the Purchase Order(s). Company is not authorized to incur expenses or make commitments in excess of the Total Value Not to Exceed listed in each Task Order/Purchase Order and X-energy is not obligated to compensate Company beyond the Total Task Order/Purchase Order Value Not to Exceed listed in each Task Order or Purchase Order. The Total Task Order/Purchase Order Value Not to Exceed listed in each Task Order or Purchase Order may be increased only by a written instrument signed by an authorized Procurement Representative of X-energy.

 

III.       CONTRACT VALUE AND FUNDING

 

The Contract Value and Funding limits of this PSA are the sum of all awarded Task Orders or Purchase Orders in U.S. Dollars.

 

IV.       LABOR RATES

 

Company’s fully loaded labor rates and approved labor categories are set forth in Exhibit C. All labor rates include direct costs and indirect costs, including without limitation, G&A and profit, and shall remain fixed for the term of this PSA. All Company Labor Rates shall be in U.S. Dollars.

 

 

V.       CONTRACTOR AND X ENERGY ADMINISTRATIVE CONTACTS

 

IBX	X Energy, LLC
801 Thompson Avenue.	801 Thompson Avenue
Suite 400	Suite 200
Rockville MD 20852	Rockville, MD 20852
Tel: [**]	Tel. [**]
Email: [**]	E-Mail: [**]

 

IN WITNESS WHEREOF, the parties have, through their authorized representatives, executed this Agreement, which consists of the Terms and Conditions and all Exhibits and attachments hereto, to be effective as of the date first set forth above.

 

IBX			X Energy, LLC
By:	/s/Shelley Johnson		By:	/s/Edward Morris
Name:	Shelley Johnson		Name:	Edward Morris
Title:	Vice President		Title:	Subcontracts Manager
Date:	February 8, 2022		Date:	February 9, 2022

 

 

Exhibit A

 

TERMS AND CONDITIONS

 

1.

Services.

 

(a)          Company will perform the Services described in the Statement of Work (“SOW”), set forth in Exhibit D. Company shall perform the Services in a competent, diligent, good faith, timely and professional manner and in accordance with the SOW. Company shall comply with applicable policies and standards of X-energy, as well as all applicable federal, state or local laws and regulations. Company shall comply with the additional terms and conditions of the contract between X-energy and the customer of client for whom the Services are performed (“Customer”).

 

(b)         Company agrees not to subcontract or assign any portion of the Services or this Agreement, or use any subcontractor, Company or independent contractor (collectively, “Subcontractor”) to perform the Services, without X-energy’s prior written consent. If X-energy provides written consent for the Company to use a Subcontractor: (i) Company shall be responsible in all respects for compliance by the Subcontractor with all terms and conditions of this Agreement; and (ii) Company shall obtain Subcontractor’s written consent to be bound by the confidentiality obligations herein prior to the commencement of performance.

 

2.         Effective Date; Term. This Agreement shall be effective as of the date first above written ("Effective Date") and shall continue in full force and effect until the first of the following to occur: (a) X-energy notifies Company that the Services have been completed; (b) the Contract Value has been reached and has not been increased in accordance with this Agreement; or (c) this Agreement has been terminated in accordance with Section 11 hereof.

 

3.        Invoicing Invoices shall be submitted no more or less than once a month, by the 15-calendar day of the month, for the number of hours worked by individual, by labor category through the end of the month. To the extent that Subcontractor submits its invoices by the 5^th calendar day of the month, X-energy will pay Subcontractor Net 30 days from receipt of an approved invoice.

 

	(a)	A separate, distinct invoice number.
	(b)	Separate invoices shall be submitted for each Purchase Order;
	(c)	The current and cumulative charges for the billing period, with hours and dollars provided for each authorized individual by labor category at the rates provided in this Agreement;
	(d)	Charges captured in submitted invoices shall be within the confines the Period of Performance and/or the Exhibit D – Statement of Work described in the Purchase Order (if applicable);
	(e)	Copy of each individual timesheet, Receipts of all ODCs & travel;
	(f)	Invoices shall be signed and dated by an authorized employee of the Company, verifying that the costs included are correct.
	(g)	All invoices shall be sent to AccountsPayable@X-energy.com by the 15th calendar day of the month.

 

 

(h)

X-energy shall reimburse Subcontractor for all expenses reasonably incurred in accordance with the Purchase Order, provided that reimbursement for such types of expenses have been pre-approved in writing by the X-energy Subcontract Administrator. All Subcontractor expenses not pre-approved by the X-energy Subcontract Administrator or not otherwise meeting the requirements of this Agreement or the Purchase Order to which it applies shall be reimbursed at the sole discretion of X-energy. Travel shall be reimbursed based on actual costs incurred in accordance with the Federal Travel Regulations (FTR) https://www.gsa.gov/policy-regulations/regulations/federal- travel-regulation-ftr

 

(h)

X-energy shall reimburse Subcontractor for all expenses reasonably incurred in accordance with the Purchase Order, provided that reimbursement for such types of expenses have been pre-approved in writing by the X-energy Subcontract Administrator. All Subcontractor expenses not pre-approved by the X-energy Subcontract Administrator or not otherwise meeting the requirements of this Agreement or the Purchase Order to which it applies shall be reimbursed at the sole discretion of X-energy.

 

4.

Payment Terms

 

(a)         The amount to be paid to Company for labor shall be computed by multiplying the applicable hourly billing rate set forth in Exhibit C by the number of direct hours performed, unless on a monthly retainer. Fractional parts of an hour shall be payable on a prorated basis as rounded to quarter-hours.

 

(b)         Company Invoiced amounts are due and payable by X-energy no later than thirty (30) days after receipt of an approved, complete and accurate invoice. X-energy shall have the right to offset against invoices any amounts due from Company to X-energy.

 

(c)          All Company invoices shall be paid in U.S. Dollars.

 

5.         Confidentiality. In the event either party determines that it is necessary to provide confidential, proprietary, or trade secret information to the other party with respect to the Services performed under this Agreement, such disclosure will be made only after advance written notice, and only under the terms of a separate non-disclosure agreement.

 

6.        Ownership of Work Product. Company agrees that all work product developed by her alone or in conjunction with others in connection with the performance of services pursuant to this Agreement is and shall be the sole property of Client, and Company shall retain no ownership, interest, or rights therein. Work product includes but is not limited to reports, graphics, memoranda, slogans, and taglines.

 

7.        Contractor Relationship. Company's relationship with Client will be that of an independent contractor, and nothing in this Agreement is intended to, or should be construed to, create a partnership, agency, joint venture, or employment relationship. No part of Company’s compensation will be subject to withholding by Client for the payment of any social security, federal, state, or any other employee payroll taxes.

 

 

8.        Termination. Either party may terminate this agreement at any time by written notice to the other party. This agreement may be terminated by either party by giving (30) thirty days written notice to the other party. Termination under this paragraph shall be without prejudice to any sums therefore accrued, provided however, that X Energy LLC may retain any final payment otherwise due to Company pending Company's satisfactory completion of any work remaining under assigned TAO(s), or such other satisfactory completion as may be agreed to by X Energy LLC.

 

9.        Suspension of Work. X Energy shall have the right to suspend the performance of the Work at any time by giving twenty-four (24) hours prior notice in writing of such action plus such reasonable time as may be required for the suspension of the Work so as to beneficially conserve what Work has been done or is actually in progress for future use. No prior notice in writing is required if suspension is necessary as a result of Contractor violating safety procedures. Suspension of the Work shall be made without prejudice to the claims of either party respect of any antecedent breach of the terms of this Contract. Contractor shall, during the period of suspension, minimize all costs associated with the suspension. Upon receipt of any notice of suspension, Contractor shall, unless the notice requires otherwise:

 

(a)         Immediately discontinue the performance of the Work to the extent specified in the notice;

 

(b)         Take no further action relative to subcontractors or suppliers with respect to suspended Work other than to the extent required in the notice;

 

(c)         Promptly make every reasonable effort to obtain suspension upon terms satisfactory to X-Energy of all subcontracts and purchase agreements to the extent they relate to portions of the Work suspended; and

 

(d)         Upon receipt of notice to resume the suspended Work, promptly as practicable resume the suspended Work to the extent required in the notice.

 

As compensation to Contractor for any suspension, Contractor shall be reimbursed for reasonable costs incurred as a result of the suspension, such as mobilization and demobilization of Contractor and its subcontractors and reasonable costs in bringing the Work to an orderly state of suspension, as well as cancellation costs and any expenses reasonably incurred, including escalation costs. Any suspension or Work stoppage due to Contractor’s or Contractor’s subcontractors’ or agents’ safety violations shall be at Contractor’s expense. In addition, standby costs incurred by Contractor during the period of suspension (except for safety violations) incurred in keeping itself or its subcontractors committed to the Work in a standby status shall be paid by X Energy on a reimbursable basis.

 

10.      Limitation of Liability. In no event shall X-energy be liable for any special, indirect, incidental or consequential damages (including, but not limited to, lost profits, lost business opportunities, loss of use or equipment down time, and loss of or corruption to data) arising out of or relating to this Agreement, regardless of the legal theory under which such damages are sought, and even if Company has been advised of the possibility of such damages or loss.

 

 

11.      Indemnification. Company shall indemnify, defend and hold harmless X-energy and its affiliates, as well as X-energy’s and its affiliates’ members, managers, officers, directors, employees, agents, representatives from and against any and all claims, suits, causes of action, proceedings, liabilities, injuries to persons or property, cost and expenses (including reasonable attorneys’ fees) arising out of or relating to any breach of this Agreement by, or violation of law or regulation, negligence, or willful misconduct of, Company, its owners, directors, officers, employees, agents, representatives, subcontractors and/or suppliers. Such damages include but are not limited to injury or death of persons, loss of or damage to property (including loss of use thereof), and economic loss, including lost profit or opportunity, pollution, and environmental impairment, and natural resource damages.

 

(b)      X-energy shall promptly notify Company of any claim for which indemnification is sought under this Agreement.

 

12.      Non-Waiver of Rights. The failure of either party to insist upon performance of any provision of this Agreement, or to exercise any right, remedy or option provided herein, shall neither be construed as a waiver of the right to assert any of the same or to rely on any such terms or conditions at any time thereafter, nor in any way affect the validity of this Agreement.

 

13.      Severability. If any covenant, condition, term, or provision contained in this Agreement is held or finally determined to be invalid, illegal, or unenforceable in any respect, in whole or in part, such covenant, condition, term, or provision shall be severed from this Agreement, and the remaining covenants, conditions, terms and provisions contained herein shall continue in force and effect, and shall in no way be affected, prejudiced or disturbed thereby.

 

14.      Assignment. Neither party may sell, assign, transfer, or otherwise convey any of its rights or delegate any of its duties under this Agreement without the prior written consent of the other party, which consent may not be unreasonably withheld. Notwithstanding the foregoing, X-energy may transfer or assign its rights hereunder to any successor in interest to all or substantially all of its assets

 

15.      Applicable Law. This Agreement shall be governed by and construed under the laws of the State of Maryland.

 

16.      Disputes. X-energy and the Company agree to enter into negotiations to resolve any dispute arising under or relating to this Agreement. Both parties agree to negotiate in good faith to attempt to reach a mutually agreeable settlement within a reasonable amount of time.

 

If negotiations are unsuccessful, either Party may initiate litigation in a state or federal court of competent jurisdiction within Montgomery County of the State of Maryland. By its signature below, each party submits to personal jurisdiction and venue in such courts.

 

Pending any decision, appeal or judgment referred to in this provision or the settlement of any dispute arising under this Agreement, Company shall proceed diligently with the performance of this Agreement.

 

 

17.      Waiver or Modification. This Agreement may be modified, or part or parts hereof waived, only by an instrument in writing specifically referencing this Agreement and signed by an authorized representative of the party against whom enforcement of the purported modification or waiver is sought.

 

18.      Conflicting Obligations. Company agrees to immediately inform X-energy in writing of any apparent conflicts between Company’s work for X-energy and any obligations Company may have to preserve the confidentiality of another’s proprietary information or materials. Otherwise, X-energy may conclude that no such conflict exists and Company agrees thereafter to make no such claim against X-energy. During the term hereof, Company will not engage in outside activities which create a conflict of interest with X-energy business activities. During the term of this Agreement and the six-month period thereafter, Company shall not solicit, hire or retain any X-energy employee.

 

19.      Export Control. Company acknowledges that the performance of this Agreement is subject to compliance with applicable United States laws, regulations, and/or orders, including those that relate to the export of materials, equipment, software, or technology, such as the U.S. Department of Energy regulations found in 10 C.F.R. Part 810, the U.S. Nuclear Regulatory Commission regulations in 10 C.F.R. Part 110, the International Traffic in Arms Regulations (“ITAR”) found in 22 C.F.R. Parts 120-130 controlled by the U.S. Department of State or the Export Administration Regulations found in 15 C.F.R. Part 730 et seq. (“EAR”) controlled by the U.S. Department of Commerce, as may be amended (collectively, “Export Control Laws”). Company shall comply with all Export Control Laws. Company shall not export, re-export, transfer, or retransfer, directly or indirectly, any technology, data, services, or hardware, except as permitted by such Export Control Laws. Company further acknowledges that exports of technology and items subject to the Export Control laws may require prior written approval from the U.S. government and that exports or re-exports of any U.S. technology to any destination under U.S. sanction or embargo are forbidden.

 

 

EXHIBIT C

 

Approved Labor Rate

 

Period of Performance
From: December 19, 2021	To: March 25, 2022

 

Skill/Person/Resource		Name		Hours				Hourly Rate				Total Funding
Consultant		Dave Wolt			120			$	291.60			$	34,992.00

 

 

Exhibit D

 

Statement of Work – Schedule Development 

Task Assignment Orders (TAOs)

 

Task Order Number: 01

 

Task Monitor: Georgette Alexander-Morrison

 

Period of Performance: December 19, 2021 – March 25, 2022

 

Total Task Value Not to Exceed (Including Travel):

 

LABOR:		$	34,992.00
TRAVEL:		$
TOTAL:		$	34,992.00

 

Statement of Work:

 

Background: X-energy is pursuing the Phase 2 procurement for the Project Pele opportunity for Office of the Secretary of Defense, Strategic Capabilities Office (SCO). The Customer sent Request for Prototype Proposal (RPP) to X-energy with a proposal due date of March 11, 2022, 4 pm EDT. The RPP requires an electronic submittal which will be performed by X-energy contracts personnel. On January 13, the customer updated all RPP documents and answered questions.

 

The RFP documentation is labeled CUI (controlled unclassified information). The staff must be US Citizens to work on this activity. The RFP will be provided once the candidate is confirmed as a US Citizen.

 

Scope:

 

Provide proposal review support services to the X-energy Government R&D Division regarding in support of the ACME proposal. This includes, but is not limited to:

 

Review all RPP documentation and background documentation provided

 

Support periodic meetings with X-energy leadership personnel to define approaches and answers to RPP instructions, “building blocks” of the bid (WBS, Program Organization Chart, Roles and Authorities Matrix (RAM), Key Personnel identification, program schedule, win themes).

 

Participate in Pink Team Review, Red Team Review, and possibly Red 2 Team Review

 

Deliverables:

 

Monthly - NA

 

As Required – Review comment summaries and detailed proposal review comments for the ACME Red Review and ACME Red 2 Review. Recommendations on how to make this a winning proposal.

 

 

Travel

 

·

One trip to Rockville Maryland to participate in the Red Team Review – if we request live meeting.

 

 

 

 

 

Exhibit 10.18

 

 

 

Professional Services Agreement 

 

 This Professional Services Agreement (“PSA” or “Agreement”), effective April 19, 2025, is made and entered into by and between X Energy, LLC (“X-energy” or “Client”), a Maryland limited liability company, having an office at 530 Gaither Road, Suite 800, Rockville, MD, 20850 and Outpost Consulting Inc. (“Consultant”), having an office at 752 Wendy Culbert Crescent, Newmarket, Ontario, Canada, L3X 0A3.

 

WHEREAS X-energy wishes to secure Consultant’s performance of consulting and other professional services as defined herein (“Services”);

 

WHEREAS, Consultant wishes to enter into an agreement with X-energy for the performance of the Services set forth herein;

 

NOW THEREFORE, in consideration of the mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

I.              DESCRIPTION OF PROFESSIONAL SERVICES

 

Consultant shall provide Services to X-energy subject to the Terms and Conditions attached hereto as Exhibit A. Services are described in specific Purchase Order(s) and are generally described in the Statement of Work (“SOW”) set forth in Exhibit B.

 

II.            PURCHASE ORDERS

 

Consultant will perform Services pursuant to individual Purchase Order(s) issued by an authorized member of the X-energy Procurement Department. The Consultant shall provide all resources necessary to deliver and/or perform the Services in the Purchase Order(s).

 

Consultant is authorized to provide up to $30,000 of Services per month. Amounts exceeding $30,000 will require prior written approval by X-energy. The total amount of Services invoiced shall not exceed the Total Value Not to Exceed listed in each Purchase Order. X-energy is not obligated to compensate Consultant beyond the Total Purchase Order Value Not to Exceed listed in each Purchase Order. The Total Purchase Order Value Not to Exceed listed in each Purchase Order may be increased only by a written instrument signed by an authorized Procurement Representative of X-energy.

 

III.           CONTRACT VALUE AND FUNDING

 

The Contract Value and Funding limits of this PSA are the sum of all awarded Purchase Orders.

 

IV.           CONSULTANT FEES AND PERIOD OF PERFROMANCE

 

Consultant’s fully loaded hourly fees for its principals are set forth below. All fees include direct costs and indirect costs, including without limitation, G&A and profit, and shall remain fixed for the term of this PSA. Consultant will provide X-energy the rates or fees for others not listed below who Consultant may retain to assist in the performance of the Services.

 

 

Principal Consultant	Hourly Rate
Ken Hartwick	USD $700
Chris Ginther	USD $500

 

The initial period of performance is twelve (12) months from the Effective Date.

 

V.            EXCLUSIVITY

 

Neither Consultant nor any Principal of Consultant shall perform or contract for the provision of services, or serve in an advisory or governance capacity to any advanced or small modular nuclear reactor company or advanced nuclear fuels company while providing Services to X-energy under this Agreement. Upon termination of this Agreement, but subject to Consultant’s ongoing confidentiality obligations as set forth in Paragraph 5 of Exhibit A, Consultant’s exclusivity obligations shall also terminate.

 

VI.           CONSULTANT AND X-ENERGY ADMINISTRATIVE CONTACTS

 

Christopher Ginther  Outpost Consulting Inc.  752 Wendy Culbert Crescent  Newmarket, Ontario  Canada L3X 0A3    Phone: [**] E-mail: [**]

Attention: Steve Miller  X Energy, LLC (X-energy/XE)  530 Gaither Road  Suite 800  Rockville, MD 20850   Phone: [**] E-mail: [**]

 

IN WITNESS WHEREOF, the parties have, through their authorized representatives, executed this Agreement, which consists of the Terms and Conditions and all Exhibits and attachments hereto, to be effective as of the date first set forth above.

 

Outpost Consulting, Inc.			X Energy, LLC
/s/ Christopher Ginther			/s/ Steven L. Miller
Christopher Ginther			Steven L. Miller
Principal			Executive Vice President
Date:	April 23, 2025 | 3:06 PM PDT		Date:	April 23, 2025 | 7:53 PM EDT

 

 

Exhibit A

 

TERMS AND CONDITIONS

 

1.             Services.

 

(a)            Consultant will perform the Services described in the Statement of Work (“SOW”), set forth in Exhibit B.

 

(b)            Consultant agrees not to subcontract or assign any portion of the Services or this Agreement, or use any subcontractor, independent contractor or other third party (collectively, “Subcontractor”) to perform the Services, without X-energy’s prior written consent, which will be reasonably provided. If X-energy provides written consent for the Consultant to use a Subcontractor: (i) Consultant shall be responsible in all respects for compliance by the Subcontractor with all terms and conditions of this Agreement; and (ii) Consultant shall obtain Subcontractor’s written consent to be bound by the confidentiality obligations herein prior to the commencement of performance.

 

2.             Representations and Warranties.

 

Consultant hereby acknowledges, represents and warrants that:

 

(a)

it is legally authorized to do business in the country wherein the Services are rendered and will take, at its own cost, such action as, from time to time hereafter, may be necessary to remain so legally authorized;

 

(b)

it has the capability, expertise, and means required to perform the Services under the SOW;

 

(c)

it shall obtain, at its expense, all licenses, permits, insurance, and governmental approvals as required for the execution of its obligations under this Agreement;

 

(d)

it shall perform the Services under the SOW in accordance therewith and, using its full knowledge to the best of its ability, with the degree of skill and care ordinarily used by competent practitioners of the same professional discipline when performing similar services under similar circumstances, taking into consideration the contemporary state of the practice;

 

(e)

it shall at all times comply with any and all laws, ordinances, statutes, executive orders and regulations, federal, state, county and municipal, insofar as applicable to Consultant’s performance of the Services under this Agreement;

 

(f)

it shall have no right or authority to act or make any promise, warranty, guarantee, or representation, incur any liability, commence legal proceedings, negotiate or execute any contract, hold itself out to have the right to accept any official or formal notices from anyone, or otherwise assume any obligation or responsibility, in the name of or on behalf of X-energy, unless specifically authorized in writing by an authorized officer of X-energy; and

 

 

(g)

it shall consider this Agreement and Services performed pursuant thereto as confidential information in accordance with Paragraph 5.

 

3.

Effective Date; Term.

 

This Agreement shall be effective as of the date first above written (“Effective Date”) and shall continue in full force and effect for a period of 12 months, unless sooner terminated in accordance with Paragraph 10 hereof.

 

4.

Invoicing and Payment.

 

Invoices shall be submitted once a month, by the 5th calendar day of the month, reporting the number of hours of work that Consultant has performed for X-energy through the end of the previous month. Each invoice will include:

 

(a)

A separate, distinct invoice number;

 

(b)

The current and cumulative charges for the billing period, with hours and dollars owed at the rates provided in this Agreement;

 

(c)

Copies of timesheets with descriptions of the Services performed;

 

(d)

Receipts for all other necessary and reasonably incurred costs to support performance of the Services; and

 

(e)

Consultant’s signature, date of submittal and a statement affirming that the costs included are true correct.

 

All invoices shall be sent to accountspayablefx-energy.com by the 5^th calendar day of the month subsequent to the month that the work is performed.

 

5.

Confidentiality and Proprietary Information.

 

(a)

Confidential Information as used in this Agreement shall mean any and all information of X-energy, in any form, including but not limited to, all data, compilations, summaries, programs, devices, strategies, or methods concerning or related to:

 

i.

X-energy’s finances, financial condition, results of operations, employee relations, and any other data or information relating to internal affairs and policies of X-energy;

 

ii.

X-energy’s marketing and business plans, future plans, concepts, competitive strategies, pricing, margins, designs, models, apparatus, disclosed customer and supplier lists;

 

iii.

the terms and conditions of X-energy’s purchases, sales and offers regarding potential or actual projects contemplated or evaluated hereunder;

 

iv.

the terms, conditions, and current status of X-energy’s agreements and relationships with any customer, supplier, or business associate, affiliate or partner whether or not in writing;

 

v.

X-energy’s trade secrets as defined by state and federal law, and/or as defined by the jurisdictions, whether foreign or domestic, in which X-energy operates;

 

vi.

X-energy’s pricing structure, including its costs, margins and mark-ups;

 

 

vii

any other information and knowledge with respect to all projects or plans of X-energy in any stage of development or evaluation by X-energy; and

 

viii.

any communication between X-energy and its officers, directors, employees, consultants and attorneys.

 

(b)

Confidential Information does not include information that: (1) is or becomes part of the public domain other than as a result of disclosure by Consultant; (2) becomes available to Consultant on a non-confidential basis from a source other than X-energy, provided that source is not bound with respect to that information by a confidentiality agreement with X-energy or otherwise prohibited from transmitting that information by a contractual, legal or other obligation; (3) is compelled to be disclosed by a legal, governmental or public authority, or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that of X-energy; or (4) is not included in paragraph 5 (a), above.

 

(c)

The parties acknowledge and agree that in the course of the provision of the Services, Consultant shall have access to Confidential Information. Consultant agrees that, during the term of this Agreement and at any time thereafter, except as required by X-energy, Consultant will not knowingly use, publish, disclose, appropriate or communicate, directly or indirectly, any Confidential Information. Consultant acknowledges and agrees that all Confidential Information is valuable proprietary information of X-energy, and that it is solely due to Consultant’s Services under this Agreement that Consultant has or will gain access to the Confidential Information.

 

(d)

Upon the expiration of the Term of the agreement provided in Paragraph 3 or sooner if requested/demanded by X-energy in writing pursuant to Paragraph 10, Consultant shall return to X-energy, or destroy and confirm such destruction, to X-energy, at X-energy’s option, all records, documents, proposals, notes, lists, files and any and all other materials including, without limitations, computerized and/or electronic information, that refers, relates or otherwise pertains to X-energy, its parent and subsidiary corporations, their affiliates, and/or each of their respective officers, directors, shareholders, agents, employees, and successors or assigns, and any and all business dealings of said persons and entities (the “X-energy Documents”). In addition, upon the expiration of the Term of the agreement provided in Paragraph 3 or sooner if requested/demanded by X-energy in writing pursuant to Paragraph 10, Consultant shall return to X-energy all property and equipment issued by X-energy during the course of this relationship, including, but not limited to, computers, mobile telephones and other smart technology communication devices and related hardware (the “X-energy Property”) by personally delivering the X-energy Property to X-energy’s office.

 

 

(e)

The Confidentiality requirements of this Agreement shall expire twelve (12) months from the later of the date of Termination of this Agreement, and the date of return of, or confirmation of the destruction of, all Confidential Information to X-energy; provided that Consultant’s obligations under paragraph 5 (c) not to disclose X-energy’s Confidential Information shall survive the termination of this Agreement.

 

6.

Ownership of Work Product and Data.

 

(a) Consultant agrees that all work product developed by Consultant alone or in conjunction with others in connection with the performance of services pursuant to this Agreement is and shall be the sole property of X-energy, and Consultant shall retain no ownership, interest, or rights therein except to the extent of any Consultant Background IP which may be embodied in the work product as further defined in paragraph 6 (b). Work product includes but is not limited to reports, graphics, memoranda, slogans, and taglines. X-energy shall have the full title and all rights in and to (including the sole right to obtain patents on) any inventions, ideas, discoveries, methods, processes, designs, drawings, calculations, data, information, reports, computer programs and concepts of any nature (“Data”) whatsoever made or conceived by Consultant during the performance of the Services in this Agreement. Consultant shall keep confidential and shall not publish or otherwise disclose any such Data without X-energy ’s prior written consent or retain copies of such Data after the termination of this Agreement. Works of authorship created in performing the services hereunder shall be considered as specially ordered or commissioned “work for hire” and all copyrights for such works of authorship shall belong to X-energy. Consultant agrees to provide such Data to X-energy and to execute all documents and comply with any reasonable request of X-energy in connection with patents or patent applications which may be undertaken at X-energy’s expense.

 

Notwithstanding the above, X-energy understands that special techniques in the arts and sciences, developed or accumulated by Consultant at its own time and expense, may be employed to benefit X-energy under this Agreement (“Background IP”), and agrees that such special techniques are proprietary to Consultant and shall not be disclosed to any third party during or subsequent to the term of this Agreement without Consultant’s prior written consent; provided, however, that to the extent any such Background IP is embodied in work product, Consultant hereby grants to X-energy a perpetual, royalty-free, fully paid license right of use with respect to such Background IP such that X-energy shall not be restricted in any way from utilizing the work product for its intended use.

 

7.

Independent Contractor.

 

(a) Consultant’s relationship with Client will be that of an independent contractor, and nothing in this Agreement is intended to, or should be construed to, create a partnership, agency, joint venture, or employment relationship. Consultant is retained by X-energy only for the purposes and to the extent set forth in this Agreement for the performance of the Services. Consultant is not required to provide services exclusively to X-energy and Consultant is free to undertake other engagements with other business entities in accordance with the confidentiality and conflict of interest provisions herein. Consultant shall be solely responsible for the performance of the Services, and subject to the terms of this Agreement, shall have sole discretion and control to determine the method, details and means of performing the Services, subject to the specifications and limitations of X-energy. X-energy shall have no right to, and shall not, control the manner or determine the method of accomplishing the Services, but X-energy retains the right to control the overall objectives regarding the duties and/or work to be performed by Consultant pursuant hereto.

 

 

 

(b) Consultant hereby represents and warrants that Consultant is solely and exclusively responsible for paying all federal, state and/or local taxes and withholdings with respect to any fees Consultant receives as a result of the performance of the Services. In addition, Consultant represents and warrants that it will comply with any other applicable statutory or contractual obligations, including but not limited to, workers’ compensation insurance, health insurance, and unemployment insurance as part of Consultant’s status as an independent business. Consultant on behalf of its officers, directors, employees and agents if any, represents and warrants that it is not eligible, and will have no claim against X-energy, for employee benefits, including but not limited to vacation or holiday pay, sick leave, health insurance, retirement benefits, unemployment insurance benefits, separation payments or other employee benefits of any kind (collectively, Benefits). If any government agency or court determines that Consultant should be reclassified as an employee, Consultant hereby waives any right to X-energy Benefits and acknowledges and understands that such reclassification shall not entitle Consultant to any Benefits offered to X-energy’s employees.

 

8.             Export Control.

 

Consultant acknowledges that the performance of this Agreement is subject to compliance with applicable United States laws, regulations, and/or orders, including those that relate to the export of materials, equipment, software, or technology, such as the U.S. Department of Energy regulations found in 10 C.F.R. Part 810, the U.S. Nuclear Regulatory Commission regulations in 10 C.F.R. Part 110, the International Traffic in Arms Regulations (“ITAR”) found in 22 C.F.R. Parts 120-130 controlled by the U.S. Department of State or the Export Administration Regulations found in 15 C.F.R. Part 730 et seq. (“EAR”) controlled by the U.S. Department of Commerce, as may be amended (collectively, “Export Control Laws”). Consultant shall comply with all Export Control Laws. Consultant shall not export, re-export, transfer, or retransfer, directly or indirectly, any technology, data, services, or hardware, except as permitted by such Export Control Laws. Consultant further acknowledges that exports of technology and items subject to the Export Control laws may require prior written approval from the U.S. government and that exports or re-exports of any U.S. technology to any destination under U.S. sanction or embargo are forbidden. Compliance with the foregoing provisions shall be supported and/or provided by X-energy.

 

 

9.             No Unlawful Payments.

 

Consultant is aware of and familiar with the provisions of the Foreign Corrupt Practices Act and analogous laws (e.g., UK Bribery Act) that are applicable to X-energy under its laws of incorporation, as well as any other applicable laws that otherwise subject X-energy, including without limitation any laws implementing the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions, as these laws may be amended or interpreted from time to time (the “Corrupt Payment Laws”) and their purposes.

 

Consultant hereby represents and warrants that it has complied, and undertakes that, in performing this Agreement, the Consultant shall comply with and do all things necessary to comply with the Corrupt Payment Laws that apply to this Agreement and the performance thereof.

 

10.           Termination.

 

(a) This agreement may be terminated by either party by giving (60) sixty days written notice to the other party. Termination under this Paragraph shall be without prejudice to any sums therefore accrued, provided however, that X-energy may retain any final payment otherwise due to Consultant pending Consultant’s satisfactory completion of any work remaining under assigned PO(s), or such other satisfactory completion as may be agreed to by X-energy.

 

(b) X-energy may immediately terminate this Agreement and Consultant’s Services at any time if Consultant engages in misconduct or any fraudulent or dishonest act against X-energy or in connection with providing services to X-energy; Consultant violates any applicable law or regulation relating to dishonesty or respecting X-energy’s business, or that disqualifies Consultant from being affiliated with Consultant; Consultant habitually neglects his duties or provides substandard service; or Consultant otherwise violates any of the terms of this Agreement. If Consultant’s services are terminated for misconduct, fraudulent or dishonest acts, or violation of laws or regulations, any fees that have not been paid will be forfeited and not paid to Consultant. If any of the other events identified in this Paragraph occur, payments will end on the date Consultant’s services are terminated.

 

11.           Suspension of Work.

 

X-energy shall have the right to suspend the performance of the work at any time by giving twenty-four (24) hours prior notice in writing of such action plus such reasonable time as may be required for the suspension of the work so as to beneficially conserve what work has been done or is actually in progress for future use. No prior notice in writing is required if suspension is necessary as a result of Consultant violating safety procedures. Suspension of the work shall be made without prejudice to the claims of either party respect of any antecedent breach of the terms of this Contract. Consultant shall, during the period of suspension, minimize all costs associated with the suspension. Upon receipt of any notice of suspension, Consultant shall, unless the notice requires otherwise:

 

i.

Immediately discontinue the performance of the work to the extent specified in the notice;

 

 

ii.

Take no further action relative to subcontractors or suppliers with respect to suspended work other than to the extent required in the notice;

 

iii.

Promptly make every reasonable effort to obtain suspension upon terms satisfactory to X-energy of all subcontracts and purchase agreements to the extent they relate to portions of the work suspended; and

 

iv.

Upon receipt of notice to resume the suspended work, promptly as practicable resume the suspended work to the extent required in the notice.

 

As compensation to Consultant for any suspension, Consultant shall be reimbursed for reasonable costs incurred as a result of the suspension, such as mobilization and demobilization of Consultant and its subcontractors and reasonable costs in bringing the work to an orderly state of suspension, as well as cancellation costs and any expenses reasonably incurred, including escalation costs. Any suspension or work stoppage due to Consultant’s or Consultant’s subcontractors’ or agents’ safety violations shall be at Consultant’s expense. In addition, standby costs incurred by Consultant during the period of suspension (except for safety violations) incurred in keeping itself or its subcontractors committed to the work in a standby status shall be paid by X-energy on a reimbursable basis.

 

12.           Limitation of Liability.

 

Other than damages due to breaches of confidentiality, in no event shall the Parties be liable for any special, indirect, incidental or consequential damages (including, but not limited to, lost profits, lost business opportunities, loss of use or equipment down time, and loss of or corruption to data) arising out of or relating to this Agreement, regardless of the legal theory under which such damages are sought.

 

13.           Indemnification.

 

(a) Consultant shall indemnify, defend and hold harmless X-energy and its affiliates, as well as X-energy’s and its affiliates’ members, managers, officers, directors, employees, agents, representatives from and against any and all third party claims, suits, causes of action, proceedings, liabilities, injuries to persons or property, cost and expenses (including reasonable attorneys’ fees) arising from Consultant’s grossly negligent or worse conduct except to the extent any such liability, damage, loss, cost or expense is caused by X-energy’s gross negligence or worse conduct. Such damages include but are not limited to injury or death of persons, loss of or damage to property (including loss of use thereof), and economic loss, including lost profit or opportunity, pollution, and environmental impairment, and natural resource damages.

 

 

 

(b) X-energy shall indemnify, defend and hold harmless Consultant and its affiliates, as well as Consultant's and its affiliates' members,managers, officers, directors, employees, agents, representatives from and against any and all third party claims, suits, causes of action, proceedings, liabilities, injuries to persons or property, cost and expenses (including reasonable attorneys' fees) arising from X-energy's grossly negligent or worse conduct except to the extent any such liability, damage, loss, cost or expense is caused by Consultant's gross negligence or worse conduct. Such damages include but are not limited to injury or death of persons, loss of or damage to property (including loss of use thereof), and economic loss, including lost profit or opportunity, pollution, and environmental impairment, and natural resource damages.

 

(c) Consultant agrees to indemnify, protect and hold X-energy harmless from any and all tax liabilities and responsibilities for payment of all federal, state and local taxes, including, but not limited to all payroll taxes, self-employment taxes, and for payment of any workers' compensation premiums or other contributions imposed or required under federal, state and local laws, with respect to Consultant.

 

(d) Each party will notify the other of any claim for which indemnification is sought under this Agreement.

 

14.            Insurance.

 

Consultant shall maintain automobile bodily injury and property damage liability insurance covering automobiles, whether owned, non-owned, leased, or hired, with a combined single limit of not less than $500,000.00. When required by X-energy, Consultant will furnish certificates of insurance as evidence of the above-required policies.

 

15.            Non-Waiver of Rights.

 

The failure of either party to insist upon performance of any provision of this Agreement, or to exercise any right, remedy or option provided herein, shall neither be construed as a waiver of the right to assert any of the same or to rely on any such terms or conditions at any time thereafter, nor in any way affect the validity of this Agreement.

 

16.            Severability.

 

If any covenant, condition, term, or provision contained in this Agreement is held or finally determined to be invalid, illegal, or unenforceable in any respect, in whole or in part, such covenant, condition, term, or provision shall be severed from this Agreement, and the remaining covenants, conditions, terms and provisions contained herein shall continue in force and effect, and shall in no way be affected, prejudiced or disturbed thereby.

 

 

17.            Assignment.

 

Neither party may sell, assign, transfer, or otherwise convey any of its rights or delegate any of its duties under this Agreement without the prior written consent of the other party, which consent may not be unreasonably withheld. Notwithstanding the foregoing, X-energy may transfer or assign its rights hereunder to any successor in interest to all or substantially all of its assets.

 

18.            Governing Law.

 

This Agreement and all matters relating to the meaning, validity or enforceability thereof and the performance of Services hereunder shall be governed by and construed under the laws of the State of Maryland.

 

19.            Disputes.

 

X-energy and the Consultant agree to resolve any dispute arising under or relating to this Agreement via negotiation in good faith to attempt to reach a mutually agreeable resolution within a reasonable amount of time.

 

20.            Modification.

 

This Agreement may be modified, or part or parts hereof waived, only by an instrument in writing specifically referencing this Agreement and signed by an authorized representative of the party against whom enforcement of the purported modification is sought.

 

21.            Conflicting Obligations.

 

Notwithstanding that Consultant may be, during the term hereof, an employee, consultant, board member, etc. of another company, Consultant will not engage in outside activities that would create a direct conflict of interest with X-energy's business. During the term of this Agreement and the six-month period thereafter, Consultant shall not solicit, hire or retain any X-energy employee.

 

22.            Entire Agreement.

 

This Agreement constitutes the entire agreement between the Parties with respect to the Services to be performed by Consultant under this Agreement.

 

23.            Headings.

 

Headings used throughout this Agreement are for administrative convenience only and shall be disregarded for the purpose of construing and enforcing this Agreement.

 

24.            Waiver of Breach or Violation Not Deemed Continuing.

 

The waiver by either party of a breach or violation of any provision of this Agreement shall not operate as, or be construed to be, a waiver of any subsequent breach or violation.

 

 

25.            Notices.

 

Any notice required or permitted to be given by one party to the other pursuant to this Agreement shall be in writing and may be given by e-mail or other means of electronic transmission (all subject to receipt being acknowledged) or certified letter (postage prepaid) addressed to the individual identified in Section V of this Agreement for the party intended as the recipient.

 

26.            Counterparts.

 

This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same Agreement. A signed copy of this Agreement delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

 

Exhibit B

 

Statement of work

 

·     Project Long Mott ("PLM") and other Xe-100 projects:

 

·

Ken Hartwick to serve as XE's senior representative on the soon-to-be-established PLM oversight committee. This may involve serving as Committee Chairman.

 

·

Advise XE on PLM and other projects' contractual framework and structure (not legal advice, per se, but more best practices that have successfully been employed in other mega projects) with the goal of standardizing contractual framework.

 

·

Provide general project monitoring and advice to XE team, including advice on construction progress and trends.

 

·

Assist in cost and schedule validation of technology development and project execution.

 

·

Present periodic project reports to the XE Board of Directors, as requested by XE.

 

·     XE DevCo support and strategic advice:

 

·

Advise senior XE leadership on DevCo organizational structure and effectiveness.

 

·

Advise XE DevCo organization in support of non-PLM project commercial negotiations, business development, and project management.

 

·

Support external facing meetings on behalf of XE for senior-level meetings with current and future external partners (e.g., strategic partners, project owners, institutional investors, government investors, debt finance investors, etc.).

 

·     Canadian Market Support:

 

·

Strategically engage with senior government officials in Canada to drive policies favorable to deploying an Xe-100 Canadian fleet.

 

·

Strategically advise XE and engage with Canadian senior/executive-level customers/partners in support of XE Canadian business development.

 

·

Advise XE Canada team on overall market strategy for customer targeting, cost competitiveness, project development, project finance, and government engagement to deliver a fleet of Xe-100s in Canada.

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the reference to our firm under the caption "Experts" and to the use of our report dated March 20, 2026, with respect to the consolidated financial statements of X-Energy Reactor Company, LLC included in Amendment No. 1 to the Registration Statement (Form S-1) and related Prospectus of X-Energy, Inc. dated April 3, 2026.

 

/s/ Ernst & Young LLP

 

Tysons, Virginia

 

April 3, 2026

 

Exhibit 23.2

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the reference to our firm under the caption "Experts" and to the use of our report dated March 20, 2026 with respect to the financial statements of X-Energy, Inc. included in Amendment No. 1 to the Registration Statement (Form S-1) and related Prospectus of X-Energy, Inc dated April 3, 2026.

 

/s/ Ernst & Young LLP

 

Tysons, Virginia

 

April 3, 2026