Exhibit 1.1

 

 

X-Energy, Inc.

 

        Shares of Class A Common Stock

 

Underwriting Agreement

 

        , 2026 

J.P. Morgan Securities LLC 

Jefferies LLC 

Moelis & Company LLC 

Morgan Stanley & Co. LLC

As Representatives of the

several Underwriters listed

in Schedule 1 hereto

 

c/o J.P. Morgan Securities LLC 

270 Park Avenue 

New York, New York 10017

 

c/o Jefferies LLC 

520 Madison Avenue

New York, New York 10022

 

c/o Moelis & Company LLC 

399 Park Avenue, 4^th Floor 

New York, New York 10022

 

c/o Morgan Stanley & Co. LLC 

1585 Broadway 

New York, New York 10036

 

Ladies and Gentlemen:

 

X-Energy, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting as representatives (the “Representatives”), an aggregate of          shares of Class A Common Stock, par value $0.0001 per share (such stock, “Class A Common Stock” and, collectively, the “Underwritten Shares”), of the Company. In addition, the Company proposes to issue and sell, at the option of the Underwriters, up to an additional          shares of Class A Common Stock of the Company (the “Option Shares”). The Underwritten Shares and the Option Shares are herein referred to as the “Shares”. The shares of Class A Common Stock of the Company to be outstanding after giving effect to the sale of the Shares are referred to herein as the “Stock”.

 

It is understood and agreed to by all parties that the Company has entered, or will prior to the Closing Date (as defined below) enter, into the Reorganization Transactions (as defined in the Preliminary Prospectus (as defined below)), pursuant to which the Company will become the sole managing member of X-Energy Reactor Company, LLC, a Delaware limited liability company (“XERC” and, together with the Company, the “X-Energy Parties” and each, an “X-Energy Party”).

 

 

Following the Reorganization Transactions, the Company will be a holding company whose sole material asset will consist of limited liability company interests in XERC, and XERC will wholly own, directly or indirectly, all of the Company’s operating assets. References herein to the “Company and its subsidiaries” refer to the Company and its subsidiaries following the consummation of the Reorganization Transactions.

 

Morgan Stanley & Co. LLC (the “Directed Share Underwriter”) has agreed to reserve a portion of the Shares to be purchased by it under this Agreement, up to          Shares, for sale to the Company’s directors, officers, and certain employees and other parties related to the Company (collectively, “Participants”), as set forth in the Prospectus (as hereinafter defined) under the heading “Underwriting” (the “Directed Share Program”). The Shares to be sold by the Directed Share Underwriter and its affiliates pursuant to the Directed Share Program are referred to hereinafter as the “Directed Shares”. Any Directed Shares not orally confirmed for purchase by any Participant by          [A/P].M., New York City time on the business day on which this Agreement is executed will be offered to the public by the Underwriters as set forth in the Prospectus.

 

Each of the X-Energy Parties hereby confirms its agreement with the several Underwriters concerning the purchase and sale of the Shares, as follows:

 

1.             Registration Statement. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration statement on Form S-1 (File No. 333-294508), including a prospectus, relating to the Shares. Such registration statement, as amended at the time it became effective, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the registration statement at the time of its effectiveness (“Rule 430 Information”), is referred to herein as the “Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each prospectus included in such registration statement (and any amendments thereto) before effectiveness, any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the Registration Statement at the time of its effectiveness that omits Rule 430 Information, and the term “Prospectus” means the prospectus in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Shares. If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus.

 

At or prior to the Applicable Time (as defined below), the Company had prepared the following information (collectively with the pricing information set forth on Annex A, the “Pricing Disclosure Package”): a Preliminary Prospectus dated         , 2026 and each “free-writing prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on Annex A hereto.

 

 

“Applicable Time” means          [A/P].M., New York City time, on         , 2026.

 

2.            Purchase of the Shares.

 

(a)          The Company agrees to issue and sell the Underwritten Shares to the several Underwriters as provided in this underwriting agreement (this “Agreement”), and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase at a price per share of $         (the “Purchase Price”) from the Company the respective number of Underwritten Shares set forth opposite such Underwriter’s name in Schedule 1 hereto.

 

In addition, the Company agrees to issue and sell the Option Shares to the several Underwriters as provided in this Agreement, and the Underwriters, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, shall have the option to purchase, severally and not jointly, from each of the Company the Option Shares at the Purchase Price less an amount per share equal to any dividends or distributions declared by the Company and payable on the Underwritten Shares but not payable on the Option Shares.

 

If any Option Shares are to be purchased, the number of Option Shares to be purchased by each Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name of such Underwriter in Schedule 1 hereto (or such number increased as set forth in Section 12 hereof) bears to the aggregate number of Underwritten Shares being purchased from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional Shares as the Representatives in their sole discretion shall make.

 

The Underwriters may exercise the option to purchase Option Shares at any time in whole, or from time to time in part, on or before the thirtieth (30^th) day following the date of the Prospectus, by written notice from the Representatives to the Company and the Attorneys-in-Fact (as defined below) (with a courtesy copy of such notice delivered to Latham & Watkins LLP). Such notice shall set forth the aggregate number of Option Shares as to which the option is being exercised and the date and time when the Option Shares are to be delivered and paid for, which may be the same date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date nor later than the tenth full business day (as hereinafter defined) after the date of such notice (unless such time and date are postponed in accordance with the provisions of Section 12 hereof). Any such notice shall be given at least two business days prior to the date and time of delivery specified therein.

 

(b)          Each of the X-Energy Parties understands that the Underwriters intend to make a public offering of the Shares, and initially to offer the Shares on the terms set forth in the Pricing Disclosure Package. Each of the X-Energy Parties acknowledges and agrees that the Underwriters may offer and sell Shares to or through any affiliate of an Underwriter.

 

(c)          Payment for the Shares shall be made by wire transfer in immediately available funds to the accounts specified by the Company to the Representatives in the case of the Underwritten Shares, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, One Manhattan West, New York, New York 10001 at 10:00 A.M. New York City time on         , 2026, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives, the Company and the Attorneys-in-Fact may agree upon in writing or, in the case of the Option Shares, on the date and at the time and place specified by the Representatives in the written notice of the Underwriters’ election to purchase such Option Shares. The time and date of such payment for the Underwritten Shares is referred to herein as the “Closing Date”, and the time and date for such payment for the Option Shares, if other than the Closing Date, is herein referred to as the “Additional Closing Date”.

 

 

(d)          Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as the case may be, shall be made against delivery to the Representatives for the respective accounts of the several Underwriters of the Shares to be purchased on the Closing Date or the Additional Closing Date, as the case may be, with any transfer taxes payable in connection with the initial sale of such Shares duly paid by the Company. Delivery of the Shares shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct.

 

(e)          Each of the X-Energy Parties acknowledges and agrees that the Representatives and the other Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the X-Energy Parties with respect to the offering of Shares contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the X-Energy Parties or any other person. Additionally, neither the Representatives nor any other Underwriter is advising the X-Energy Parties or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The X-Energy Parties shall consult with their own advisors concerning such matters and each shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representatives nor any other Underwriter shall have any responsibility or liability to the X-Energy Parties with respect thereto. Any review by the Representatives and the other Underwriters of the X-Energy Parties, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representatives and the other Underwriters and shall not be on behalf of the X-Energy Parties.

 

3.            Representations and Warranties of the X-Energy Parties. The X-Energy Parties represent and warrant to each Underwriter that:

 

(a)            Preliminary Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus included in the Pricing Disclosure Package, at the time of filing thereof, complied in all material respects with the applicable requirements of the Securities Act, and no Preliminary Prospectus, at the time of filing thereof, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the X-Energy Parties make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the X-Energy Parties in writing by such Underwriter through the Representatives expressly for use in any Preliminary Prospectus, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(c) hereof.

 

 

(b)            Pricing Disclosure Package. The Pricing Disclosure Package as of the Applicable Time did not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the X-Energy Parties make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the X-Energy Parties in writing by such Underwriter through the Representatives expressly for use in such Pricing Disclosure Package, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(c) hereof. No statement of material fact included in the Prospectus has been omitted from the Pricing Disclosure Package and no statement of material fact included in the Pricing Disclosure Package that is required to be included in the Prospectus has been omitted therefrom.

 

(c)            Issuer Free Writing Prospectus. Other than the Registration Statement, the Preliminary Prospectus and the Prospectus, the Company (including its agents and representatives, other than the Underwriters in their capacity as such) has not prepared, made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Shares (each such communication by the Company or its agents and representatives (other than a communication referred to in clause (i) below) an “Issuer Free Writing Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or any oral or written communication with potential investors undertaken in reliance on Rule 163B under the Securities Act (each, a “Testing-the-Waters Communication”), or (ii) the documents listed on Annex A hereto, each electronic road show and any other written communications approved in writing in advance by the Representatives. Each such Issuer Free Writing Prospectus complies in all material respects with the applicable provisions of the Securities Act, has been or will be (within the time period specified in Rule 433) filed in accordance with the Securities Act (to the extent required thereby) and does not conflict with the information contained in the Registration Statement or the Pricing Disclosure Package, and, when taken together with the Preliminary Prospectus accompanying, or delivered prior to delivery of, such Issuer Free Writing Prospectus, did not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the X-Energy Parties make no representation or warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus or Preliminary Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the X-Energy Parties in writing by such Underwriter through the Representatives expressly for use in such Issuer Free Writing Prospectus or Preliminary Prospectus, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(c) hereof.

 

 

(d)            Emerging Growth Company. From the time of initial confidential submission of a registration statement relating to the Shares with the Commission (or, if earlier, the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication undertaken in reliance on Section 5(d) of the Securities Act) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”).

 

(e)            Testing-the-Waters Materials. The Company (i) has not alone engaged in any Testing-the-Waters Communications other than Testing-the-Waters Communications with the consent of the Representatives (x) with entities that are qualified institutional buyers (“QIBs”) within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act (“IAIs”) and otherwise in compliance with the requirements of Section 5(d) of the Securities Act or (y) with entities that the Company reasonably believed to be QIBs or IAIs and otherwise in compliance with the requirements of Rule 163B under the Securities Act and (ii) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that the Representatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications by virtue of a writing substantially in the form of Exhibit A hereto. The Company has not distributed or approved for distribution any Written Testing-the-Waters Communications other than those listed on Annex B hereto. “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act. Any individual Written Testing-the-Waters Communication prepared or authorized by the Company does not conflict with the information contained in the Registration Statement or the Pricing Disclosure Package, complied in all material respects with the applicable provisions of the Securities Act, and when taken together with the Pricing Disclosure Package as of the Applicable Time, did not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(f)             Registration Statement and Prospectus. The Registration Statement has been declared effective by the Commission. No order suspending the effectiveness of the Registration Statement has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering of the Shares has been initiated or, to the knowledge of the Company, threatened by the Commission; as of the applicable effective date of the Registration Statement and any post-effective amendment thereto, the Registration Statement and any such post-effective amendment complied and, as of the Closing Date or any Additional Closing Date, will comply in all material respects with the Securities Act, and did not, as of the applicable effective date, and will not, as of the Closing Date or any Additional Closing Date, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the Additional Closing Date, as the case may be, the Prospectus will comply in all material respects with the applicable provisions of the Securities Act and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the X-Energy Parties make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the X-Energy Parties in writing by such Underwriter through the Representatives expressly for use in the Registration Statement and the Prospectus and any amendment or supplement thereto, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(c) hereof.

 

 

(g)            Financial Statements. The financial statements (including the related notes thereto) of the X-Energy Parties included in the Registration Statement, the Pricing Disclosure Package and the Prospectus comply in all material respects with the applicable requirements of the Securities Act and present fairly, in all material respects, the financial position of the X-Energy Parties and their respective consolidated subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States applied on a consistent basis throughout the periods covered thereby, and any supporting schedules included in the Registration Statement present fairly, in all material respects, the information required to be stated therein; and the other financial information included in the Registration Statement, the Pricing Disclosure Package and the Prospectus has been derived from the accounting records of the X-Energy Parties and their respective consolidated subsidiaries and presents fairly, in all material respects, the information shown thereby; all disclosures included in the Registration Statement, the Pricing Disclosure Package and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of Commission) comply in all material respects with Regulation G of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”) and Item 10 of Regulation S-K of the Securities Act, to the extent applicable; and the pro forma financial information and the related notes thereto included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been prepared in accordance with the applicable requirements of the Securities Act and the assumptions underlying such pro forma financial information are reasonable and are set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

 

(h)            No Material Adverse Change. Other than (1) the issuance of shares of Common Stock upon exercise of stock options and warrants described as outstanding in, and the grant of options and awards under existing equity incentive plans described in, the Registration Statement, the Pricing Disclosure Package and the Prospectus, (2) the issuance, if any, of shares upon conversion of Company securities as described in the Preliminary Prospectus and the Prospectus or (3) the Reorganization Transactions, since the date of the most recent financial statements included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (i) there has not been any material change in the capital stock or material change in the long-term debt of the X-Energy Parties or any of their respective subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the X-Energy Parties on any class of capital stock, or any material adverse change, or any development that would reasonably be expected to involve a material adverse change, in or affecting the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the X-Energy Parties and their respective subsidiaries taken as a whole; (ii) neither the X-Energy Parties nor any of their respective subsidiaries has entered into any transaction or agreement that is material to the X-Energy Parties and their respective subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the X-Energy Parties and their respective subsidiaries taken as a whole; and (iii) neither the X-Energy Parties nor any of their respective subsidiaries has sustained any loss or interference with its business that is material to the X-Energy Parties and their respective subsidiaries taken as a whole and that is either from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

 

 

(i)             Organization and Good Standing. Each of the X-Energy Parties and each of their respective subsidiaries has been duly organized and is validly existing and in good standing under the laws of its respective jurisdiction of organization, is duly qualified to do business and is in good standing in each jurisdiction in which its respective ownership or lease of property or the conduct of its respective businesses requires such qualification, and has all power and authority necessary to own or hold its respective properties and to conduct the businesses in which it is engaged, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the X-Energy Parties and their respective subsidiaries taken as a whole or on the performance by the X-Energy Parties of their obligations under this Agreement (a “Material Adverse Effect”). After giving effect to the Reorganization Transactions, the X-Energy Parties do not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Exhibit 21 to the Registration Statement. The subsidiaries listed in Schedule 2 to this Agreement are the only significant subsidiaries of the X-Energy Parties.

 

(j)             Capitalization. Immediately following the Reorganization Transactions, the X-Energy Parties have an authorized capitalization as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus under the headings “Capitalization” and “Description of Capital Stock”; all the outstanding shares of capital stock of the X-Energy Parties have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; except as described in or expressly contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the X-Energy Parties or any of their respective subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of any X-Energy Party or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock of each X-Energy Party conforms in all material respects to the description thereof contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each significant subsidiary owned, directly or indirectly, by each X-Energy Party have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the X-Energy Parties, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.

 

 

(k)            Stock Options. With respect to the stock options (the “Stock Options”) granted pursuant to the stock-based compensation plans of the Company and its subsidiaries (the “Company Stock Plans”), (i) except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each Stock Option intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) so qualifies, (ii) each grant of a Stock Option was duly authorized no later than the date on which the grant of such Stock Option was by its terms to be effective by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, (iii) each such grant was made in accordance with the terms of the Company Stock Plans, the Exchange Act and all other applicable laws and regulatory rules or requirements, including, as applicable, the rules of the Nasdaq Global Select Market (the “Exchange”) and any other exchange on which Company securities are traded and (iv) each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company. The X-Energy Parties have not knowingly granted, and there is no and has been no policy or practice of the X-Energy Parties of granting, Stock Options prior to, or otherwise coordinating the grant of Stock Options with, the release or other public announcement of material information regarding the X-Energy Parties or their respective subsidiaries or their results of operations or prospects.

 

(l)             Due Authorization. The X-Energy Parties have the full right, power and authority to execute and deliver this Agreement and to perform their respective obligations hereunder; and all action required to be taken for the due and proper authorization, execution and delivery by the X-Energy Parties of this Agreement and the consummation by the X-Energy Parties of the transactions contemplated hereby has been duly and validly taken.

 

(m)           Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by the X-Energy Parties.

 

(n)            The Shares. Immediately following the Reorganization Transactions, the Shares to be issued and sold by the Company to the Underwriters hereunder have been duly authorized by the Company and, when issued and delivered and paid for as provided herein, will be duly and validly issued, will be fully paid and nonassessable and will conform in all material respects to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus; and the issuance of the Shares is not subject to any preemptive or similar rights.

 

 

(o)            Descriptions of the Underwriting Agreement. This Agreement conforms in all material respects to the description thereof contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

 

(p)            No Violation or Default. Neither the X-Energy Parties nor any of their respective subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the X-Energy Parties or any of their respective subsidiaries is a party or by which the X-Energy Parties or any of their respective subsidiaries is bound or to which any property or asset of the X-Energy Parties or any of their respective subsidiaries is subject; or (iii) in violation of any applicable law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the X-Energy Parties or any of their respective subsidiaries, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(q)            No Conflicts. The execution, delivery and performance by the X-Energy Parties of this Agreement, the issuance and sale of the Shares by the Company, the issuance by the Company of the Shares to be issued upon the exercise of the Options (as hereinafter defined) and the consummation by the X-Energy Parties of the transactions contemplated by this Agreement or the Pricing Disclosure Package and the Prospectus, including the Reorganization Transactions, will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, result in the termination, modification or acceleration of, or result in the creation or imposition of any lien, charge or encumbrance upon any property, right or asset of the X-Energy Parties or any of their respective subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the X-Energy Parties or any of their respective subsidiaries is a party or by which the X-Energy Parties or any of their respective subsidiaries is bound or to which any property, right or asset of the X-Energy Parties or any of their respective subsidiaries is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the X-Energy Parties or any of their respective subsidiaries or (iii) result in the violation of any applicable law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the X-Energy Parties or any of their respective subsidiaries, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation, default, lien, charge or encumbrance that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

 

(r)             No Unregistered Offering. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the X-Energy Parties have not sold, issued or distributed any shares of Class A Common Stock during the six-month period preceding the date of this Agreement, including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.

 

(s)             No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the X-Energy Parties of this Agreement, the issuance by the Company of the Shares to be issued upon the exercise of the Options (as defined below) and the consummation of the transactions contemplated by this Agreement, including the Reorganization Transactions, except for the registration of the Shares under the Securities Act and such consents, approvals, authorizations, orders and registrations or qualifications (i) as may be required by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and under applicable state securities laws in connection with the purchase and distribution of the Shares by the Underwriters or (ii) as would not, individually or in the aggregate, reasonably be expected to materially adversely affect the consummation of the transactions contemplated by this Agreement, including the Reorganization Transactions.

 

(t)             Legal Proceedings. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no legal, governmental or regulatory investigations, actions, demands, claims, suits, arbitrations, inquiries or proceedings (“Actions”) pending to which the X-Energy Parties or any of their respective subsidiaries is or may be a party or to which any property of the X-Energy Parties or any of their respective subsidiaries is the subject that, individually or in the aggregate, if determined adversely to the X-Energy Parties or any of their respective subsidiaries, could reasonably be expected to have a Material Adverse Effect; to the knowledge of the X-Energy Parties, (i) no such Actions are threatened or contemplated by any governmental or regulatory authority or by others; (ii) there are no current or pending Actions that are required under the Securities Act to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus that are not so described in the Registration Statement, the Pricing Disclosure Package and the Prospectus and (iii) there are no statutes, regulations or contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement or described in the Registration Statement, the Pricing Disclosure Package or the Prospectus that are not so filed as exhibits to the Registration Statement or described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

 

(u)            Independent Accountants. Ernst & Young LLP, who has certified certain financial statements of the X-Energy Parties and their respective subsidiaries, is an independent registered public accounting firm with respect to the applicable X-Energy Parties and their respective subsidiaries within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.

 

 

(v)            Title to Real and Personal Property. The X-Energy Parties and their respective subsidiaries have good and marketable title in fee simple or other comparable valid title to, or have valid rights to lease or otherwise use, all items of real and personal property (other than with respect to Intellectual Property (as defined below), which is addressed exclusively in paragraph 3(w) below) that are material to the respective businesses of the X-Energy Parties and their respective subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the X-Energy Parties and their respective subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

(w)            Intellectual Property. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and except as would not, individually or in the aggregate, have a Material Adverse Effect (i) the X-Energy Parties and their respective subsidiaries own or have the right to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, domain names and other source indicators, copyrights, know-how, trade secrets, proprietary or confidential information and all other worldwide intellectual property and proprietary rights (collectively, “Intellectual Property”) used in the conduct of their respective businesses; (ii) the X-Energy Parties’ and their respective subsidiaries’ conduct of their respective businesses does not infringe, misappropriate or otherwise violate any Intellectual Property of any person; (iii) the X-Energy Parties and their respective subsidiaries have not received any written notice of any claim alleging any infringement, misappropriation or other violation of Intellectual Property by the X-Energy Parties or any of their respective subsidiaries; and (iv) to the knowledge of the X-Energy Parties, the Intellectual Property of the X-Energy Parties and their respective subsidiaries is not being infringed, misappropriated or otherwise violated by any person.

 

(x)             No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the X-Energy Parties or any of their respective subsidiaries, on the one hand, and the directors, officers, stockholders, customers, suppliers or other affiliates of the X-Energy Parties or any of their respective subsidiaries, on the other, that is required by the Securities Act to be described in each of the Registration Statement and the Prospectus and that is not so described in such documents and in the Pricing Disclosure Package.

 

(y)            Investment Company Act. Each X-Energy Party is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof received by the Company as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be required to register as an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Investment Company Act”).

 

(z)            Taxes. Except as would not, individually or in the aggregate, result in a Material Adverse Effect or is otherwise disclosed in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus, (i) the X-Energy Parties and their respective subsidiaries have paid all federal, state, local and foreign taxes (except assessments against which appeals have been or will be properly taken and as to which adequate reserves have been provided) and filed all tax returns required to be paid or filed through the date hereof; and (ii)  there is no tax deficiency that has been asserted against the X-Energy Parties or any of their respective subsidiaries or any of their respective properties or assets (nor do the X-Energy Parties have any notice or knowledge of any tax deficiency which could reasonably be expected to be determined adversely to the X-Energy Parties or any of their respective subsidiaries or any of their respective properties or assets).

 

 

(aa)          Licenses and Permits. The X-Energy Parties and their respective subsidiaries possess all licenses, sub-licenses, certificates, permits and other authorizations issued by, and have made all filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and except as described in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus, neither the X-Energy Parties nor any of their respective subsidiaries have received written notice of any revocation or modification of any such license, sub-license, certificate, permit or authorization or has any reason to believe that any such license, sub-license, certificate, permit or authorization will not be renewed in the ordinary course, except where such revocation, modification or failure to renew would not, individually or in the aggregate, have a Material Adverse Effect.

 

(bb)          No Labor Disputes. No labor disturbance by or dispute with employees of the X-Energy Parties or any of their respective subsidiaries exists or, to the knowledge of the X-Energy Parties, is contemplated or threatened, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the X-Energy Parties nor any of their respective subsidiaries has received any notice of cancellation or termination with respect to any collective bargaining agreement to which it is a party.

 

(cc)          Certain Environmental Matters. (i) The X-Energy Parties and their respective subsidiaries (x) are in compliance with all applicable federal, state, local and foreign laws (including common law), rules, regulations, statutes, decisions, judgments, decrees, orders and other legally enforceable requirements relating to pollution or the protection of occupational health or safety, the environment, natural resources, hazardous, toxic or radioactive substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (y) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under any Environmental Laws to conduct their respective businesses; and (z) have not received written notice of any actual or potential liability or obligation under or relating to, or any actual or potential violation of, any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous, toxic or radioactive substances or wastes, pollutants or contaminants, and have no knowledge of any event or condition that would reasonably be expected to form the basis of any such notice; (ii) there are no costs or liabilities associated with Environmental Laws and relating to the X-Energy Parties or their respective subsidiaries, except in the case of each of (i) and (ii) above, for any such matter as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iii) except as described in each of the Pricing Disclosure Package and the Prospectus, (x) there is no proceeding that is pending or, to the knowledge of the X-Energy Parties, threatened in writing against the X-Energy Parties or any of their respective subsidiaries under any Environmental Laws in which a governmental entity is also a party, other than such proceeding regarding which it is reasonably believed no monetary sanctions of $300,000 or more will be imposed, (y) the X-Energy Parties and their respective subsidiaries are not aware of any facts or issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous, toxic or radioactive substances or wastes, pollutants or contaminants, that could reasonably be expected to have a Material Adverse Effect on the capital expenditures, earnings or competitive position of the X-Energy Parties and their respective subsidiaries, and (z) none of the X-Energy Parties or their respective subsidiaries anticipates material capital expenditures required by any Environmental Laws.

 

 

(dd)          Compliance with ERISA. (i) Each employee pension benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), excluding any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA, for which any X-Energy Party or any member of its “Controlled Group” (defined as any entity, whether or not incorporated, that is under common control with such X-Energy Party within the meaning of Section 4001(a)(14) of ERISA or any entity that would be regarded as a single employer with such X-Energy Party under Section 414(b),(c),(m) or (o) of the Code could have any liability (each, a “Plan”)) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no Plan has failed (whether or not waived), or is reasonably expected to fail, to satisfy the minimum funding standards (within the meaning of Section 302 of ERISA or Section 412 of the Code) applicable to such Plan; (iv) no Plan is, or is reasonably expected to be, in “at risk status” (within the meaning of Section 303(i) of ERISA); (v) the fair market value of the assets of each Plan subject to Title IV of ERISA or Section 412 of the Code exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan); (vi) no “reportable event” (within the meaning of Section 4043(c) of ERISA and the regulations promulgated thereunder) has occurred or is reasonably expected to occur; (vii) each Plan that is intended to be qualified under Section 401(a) of the Code is entitled to rely on a favorable determination letter or opinion letter issued by the Internal Revenue Service indicating that such Plan is so qualified, and nothing has occurred, whether by action or by failure to act, which would reasonably be expected to cause the loss of such qualification; (viii) neither the X-Energy Parties nor any member of the Controlled Group has incurred within the past six (6) years, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guarantee Corporation, in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA); and (ix) none of the following events has occurred or is reasonably likely to occur: (A) a material increase in the aggregate amount of contributions required to be made to all Plans by any X-Energy Party or its Controlled Group affiliates in the current fiscal year of such X-Energy Party and its Controlled Group affiliates compared to the amount of such contributions made in such X-Energy Party’s and its Controlled Group affiliates’ most recently completed fiscal year; or (B) a material increase in the X-Energy Parties and their respective subsidiaries’ “accumulated post-retirement benefit obligations” (within the meaning of Accounting Standards Codification Topic 715-60) compared to the amount of such obligations in the X-Energy Parties and their respective subsidiaries’ most recently completed fiscal year, except in each case with respect to the events or conditions set forth in (i) through (ix) hereof, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

 

(ee)           Disclosure Controls. The Company and its subsidiaries taken as a whole maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act applicable to the Company and that has been designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

 

(ff)            Accounting Controls. The Company and its subsidiaries taken as a whole maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act applicable to the Company and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company and its subsidiaries taken as a whole maintain internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (i) there are no material weaknesses in the Company’s internal controls and (ii) since the end of the Company’s most recent audited fiscal year, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which have adversely affected or are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting (it being understood that this subsection shall not require the Company to comply with Section 404 of the Sarbanes-Oxley Act of 2002, as amended, as of an earlier date than it would otherwise be required to so comply under applicable law).

 

 

(gg)          Insurance. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the X-Energy Parties and their respective subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, as is customary in their respective industry, which insurance is in amounts and insures against such losses and risks as are customarily deemed adequate to protect the X-Energy Parties and their respective subsidiaries and their respective businesses; and neither the X-Energy Parties nor any of their respective subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.

 

(hh)          Cybersecurity; Data Protection. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) the X-Energy Parties and their respective subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform as required in connection with the operation of the business of the X-Energy Parties and their respective subsidiaries as currently conducted, free and clear of all bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants; (ii) the X-Energy Parties and their respective subsidiaries have implemented and maintained commercially reasonable safeguards designed to (A) protect confidential or sensitive information stored on their IT Systems, including any such information that constitutes “personal data,” “personal information,” or any similar term under applicable law (collectively, “Personal Data”), and (B) maintain the integrity, continuous operation, redundancy and security of all IT Systems used in connection with their businesses. To the knowledge of the X-Energy Parties, there have been no breaches, violations, outages or unauthorized uses of or accesses to the same, except for those that have been remedied without cost or liability or the statutory duty to notify any other person, and the X-Energy Parties and their respective subsidiaries are presently in compliance in all material respects with (A) all applicable laws or statutes and all binding judgments, orders, rules and regulations of any court or governmental authority, in each case, related to the privacy and security of Personal Data, and (B) external policies and contractual obligations relating to the privacy and security of Personal Data and the protection of IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.

 

 

(ii)             No Unlawful Payments. Neither the X-Energy Parties nor any of their respective subsidiaries nor any director or officer of the X-Energy Parties or any of their respective subsidiaries nor, to the knowledge of the X-Energy Parties, any employee, agent, affiliate or other person acting on behalf of the X-Energy Parties or any of their respective subsidiaries (in each case in their capacity as such) has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The X-Energy Parties and their respective subsidiaries have instituted, maintain and enforce, and will continue to maintain and enforce policies and procedures reasonably designed to promote and achieve compliance with all applicable anti-bribery and anti-corruption laws.

 

(jj)            Compliance with Anti-Money Laundering Laws. The operations of the X-Energy Parties and their respective subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the X-Energy Parties or any of their respective subsidiaries conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the X-Energy Parties or any of their respective subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the X-Energy Parties, threatened.

 

(kk)           No Conflicts with Sanctions Laws. Neither the X-Energy Parties nor any of their respective subsidiaries, directors or officers, nor, to the knowledge of the X-Energy Parties, any agent, affiliate, employee or other person acting on behalf of the X-Energy Parties or any of their respective subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury, the Department of Energy National Nuclear Security Administration, or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any X-Energy Party or any of its respective subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions, including, without limitation, Cuba, Iran, North Korea, the Kherson, Zaporizhzhia and Crimea regions of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic and any other covered region of Ukraine identified pursuant to Executive Order 14065 (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. Since April 24, 2019, the X-Energy Parties and their respective subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.

 

 

(ll)             No Restrictions on Subsidiaries. No subsidiary of any X-Energy Party is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to any X-Energy Party, from making any other distribution on such subsidiary’s capital stock or similar ownership interest, from repaying to any X-Energy Party any loans or advances to such subsidiary from any X-Energy Party or from transferring any of such subsidiary’s properties or assets to any X-Energy Party or any other subsidiary of any X-Energy Party.

 

(mm)         No Broker’s Fees. Neither the X-Energy Parties nor any of their respective subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any of them or any Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares.

 

(nn)          No Registration Rights. No person has the right to require the X-Energy Parties or any of their respective subsidiaries to register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Shares by the Company that have not been duly waived or satisfied.

 

(oo)          No Stabilization. Neither the X-Energy Parties nor any of their respective subsidiaries or affiliates has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.

 

(pp)          Margin Rules. Neither the issuance, sale and delivery of the Shares nor the application of the proceeds thereof by the X-Energy Parties as described in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

 

 

(qq)          Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) included or incorporated by reference in any of the Registration Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith as of the date when such statement was made or reaffirmed, as applicable.

 

(rr)            Statistical and Market Data. Nothing has come to the attention of the X-Energy Parties that has caused the X-Energy Parties to believe that the statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects.

 

(ss)          [Reserved].

 

(tt)            [Reserved].

 

(uu)          Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications (it being understood that this subsection shall not require the Company to comply with sections of the Sarbanes-Oxley Act as of an earlier day than it would otherwise be required to so comply under applicable law).

 

(vv)          Status under the Securities Act. At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or any offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Shares and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act.

 

(ww)         Directed Share Program. The Company represents and warrants that (i) the Registration Statement, the Pricing Disclosure Package and the Prospectus, any Preliminary Prospectus and any Issuer Free Writing Prospectuses comply in all material respects, and any further amendments or supplements thereto will comply in all material respects, with any applicable laws or regulations of foreign jurisdictions in which the Pricing Disclosure Package, the Prospectus, any Preliminary Prospectus and any Issuer Free Writing Prospectus, as amended or supplemented, if applicable, are distributed in connection with the Directed Share Program, and that (ii) no authorization, approval, consent, license, order, registration or qualification of or with any government, governmental instrumentality or court, other than such as have been obtained, is necessary under the securities laws and regulations of foreign jurisdictions in which the Directed Shares are offered outside the United States. The Company has not offered, or caused the underwriters to offer, Shares to any person pursuant to the Directed Share Program with the specific intent to unlawfully influence (i) a customer or supplier of the Company to alter the customer or supplier’s level or type of business with the Company, or (ii) a trade journalist or publication to write or publish favorable information about the Company or its products.

 

 

4.            [Reserved].

 

5.            Further Agreements of the X-Energy Parties. The X-Energy Parties covenant and agree with each Underwriter that:

 

(a)            Required Filings. The Company will file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act, will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the Securities Act.

 

(b)            Delivery of Copies. The Company will, if requested, deliver, without charge, (i) to the Representatives, two signed copies of the Registration Statement as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith; and (ii) to each Underwriter (A) a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) and (B) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and supplements thereto and each Issuer Free Writing Prospectus) as the Representatives may reasonably request. As used herein, the term “Prospectus Delivery Period” means such period of time after the first date of the public offering of the Shares as in the opinion of counsel for the Underwriters a prospectus relating to the Shares is required by law to be delivered (or required to be delivered but for Rule 172 under the Securities Act) in connection with sales of the Shares by any Underwriter or dealer.

 

(c)             Amendments or Supplements, Issuer Free Writing Prospectuses. Before using, authorizing, approving, referring to or filing any Issuer Free Writing Prospectus, and before filing any amendment or supplement to the Registration Statement, the Pricing Disclosure Package or the Prospectus, the Company will furnish to the Representatives and counsel for the Underwriters a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review (which may be by electronic mail) and will not use, authorize, approve, refer to or file any such Issuer Free Writing Prospectus or file any such proposed amendment or supplement to which the Representatives reasonably and timely object by written notice (which may be by electronic mail) to the Company.

 

 

(d)            Notice to the Representatives. The Company will advise the Representatives promptly after it receives notice of any of the following, and confirm such advice in writing (which may be by electronic mail), (i) when the Registration Statement has become effective; (ii) when any amendment to the Registration Statement has been filed or becomes effective; (iii) when any supplement to the Pricing Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication or any amendment to the Prospectus has been filed or distributed; (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information including, but not limited to, any request for information concerning any Testing-the-Waters Communication; (v) of the issuance by the Commission or any other governmental or regulatory authority of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus, any of the Pricing Disclosure Package, the Prospectus or any Written Testing-the-Waters Communication or, to the Company’s knowledge, the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act; (vi) of the occurrence of any event or development within the Prospectus Delivery Period as a result of which the Prospectus, any of the Pricing Disclosure Package, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus, the Pricing Disclosure Package, any such Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication is delivered to a purchaser, not misleading; and (vii) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Shares for offer and sale in any jurisdiction or, to the Company’s knowledge, the initiation or threatening of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus, any of the Pricing Disclosure Package or the Prospectus or any Written Testing-the-Waters Communication or suspending any such qualification of the Shares and, if any such order is issued, will use its reasonable best efforts to obtain as soon as possible the withdrawal thereof.

 

(e)            Ongoing Compliance. (1) If during the Prospectus Delivery Period (i) any event or development shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with applicable law, the Company will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission and furnish to the Underwriters and to such dealers as the Representatives may designate such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law and (2) if at any time prior to the Closing Date (i) any event or development shall occur or condition shall exist as a result of which the Pricing Disclosure Package as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Pricing Disclosure Package is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Pricing Disclosure Package to comply with applicable law, the Company will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission (to the extent required) and furnish to the Underwriters and to such dealers as the Representatives may designate such amendments or supplements to the Pricing Disclosure Package as may be necessary so that the statements in the Pricing Disclosure Package as so amended or supplemented will not, in the light of the circumstances existing when the Pricing Disclosure Package is delivered to a purchaser, be misleading or so that the Pricing Disclosure Package will comply with law.

 

 

(f)             Blue Sky Compliance. If required by applicable law, the Company will qualify the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as required for distribution of the Shares; provided that each X-Energy Party shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.

 

(g)            Earning Statement. The Company will make generally available to its security holders and the Representatives as soon as practicable an earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158) of the Registration Statement, provided that the Company will be deemed to have furnished such statement to its security holders and the Representatives to the extent such statement is made available via the Commission’s Electronic Data Gathering, Analysis, and Retrieval system (EDGAR), or any successor system of the Commission.

 

(h)            Clear Market. For a period of 180 days after the date of the Prospectus, the X-Energy Parties will not (i) 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, or submit to, or file with, the Commission a registration statement under the Securities Act relating to, any shares of Stock or any securities convertible into or exercisable or exchangeable for Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, or publicly disclose the intention to undertake any such transaction described in clause (i) or (ii) above, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise, without the prior written consent of J.P. Morgan Securities LLC, other than the Shares to be sold hereunder.

 

 

The restrictions described above do not apply to (i) the issuance of shares of Stock or securities convertible into or exercisable for shares of Stock (including, without limitation, options, restricted shares, profits interest units, performance share units or restricted share units) pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of warrants or options (including net exercise) or the vesting and/or settlement of RSUs (including net settlement), in each case outstanding on the date of this Agreement and described in the Prospectus; (ii) grants of stock options, stock awards, restricted stock, RSUs, or other compensatory equity-based awards and the issuance of shares of Stock or securities convertible into or exercisable or exchangeable for shares of Stock with respect thereto (whether upon the exercise of stock options or otherwise) to the Company’s employees, officers, directors, advisors, or consultants pursuant to the terms of any equity-based compensation plan in effect as of the Closing Date and described in the Prospectus; (iii) the issuance of securities in connection with the Reorganization Transactions (as described in the Registration Statement and the Pricing Disclosure Package); (iv) the confidential submission by the Company of a resale shelf draft registration statement on Form S-1 with the Commission as contemplated by the Stockholders’ Agreement referred to in the Prospectus (provided, in the case of any such confidential submission, (1) the Company shall give written notice to the Representatives at least three business days prior to such submission, (2) no public announcement of such confidential submission shall be made and (3) no such confidential submission shall become a publicly available registration statement during the Lock-Up Period); (v) facilitating the establishment of a trading plan on behalf of a shareholder, officer or director of the Company pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Class A shares (provided that (i) such plan does not provide for the transfer of Class A shares during the Lock-Up Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by the Company regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of Class A shares may be made under such plan during the Lock-Up Period); or (vi) the filing of any registration statement on Form S-8 relating to securities granted or to be granted pursuant to any plan in effect on the date of this Agreement and described in the Prospectus or any assumed benefit plan pursuant to an acquisition or similar strategic transaction.

 

If the Representatives, in their sole discretion, agree to release or waive the restrictions set forth in a lock-up letter described in Section 8(m) hereof for an officer or director of the Company and provide the Company with notice of the impending release or waiver substantially in the form of Exhibit B hereto at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver substantially in the form of Exhibit C hereto through a major news service at least two business days before the effective date of the release or waiver.

 

(i)             Use of Proceeds. The Company will apply the net proceeds from the sale of the Shares as described in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus under the heading “Use of Proceeds”.

 

(j)             No Stabilization. Neither the X-Energy Parties nor their respective subsidiaries or affiliates will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Stock.

 

(k)            Exchange Listing. The Company will use its reasonable best efforts to list, subject to notice of issuance, the Shares on the Exchange.

 

 

(l)             Reports. For a period of three years of this Agreement, so long as the Shares are outstanding, the Company will furnish to the Representatives, as soon as they are available, copies of all reports or other communications (financial or other) furnished to holders of the Shares, and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange or automatic quotation system; provided the Company will be deemed to have furnished such reports and financial statements to the Representatives to the extent they are filed on the Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system, or any successor system of the Commission.

 

(m)           Record Retention. The Company will, pursuant to reasonable procedures developed in good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission in accordance with Rule 433 under the Securities Act.

 

(n)            Filings. The Company will file with the Commission such reports as may be required by Rule 463 under the Securities Act.

 

(o)            Emerging Growth Company. The Company will promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of Shares within the meaning of the Securities Act and (ii) completion of the 180-day restricted period referred to in Section 5(h) hereof.

 

(p)            Certification Regarding Beneficial Owners. The Company will deliver to each Underwriter (or its agent), on the date of execution of this Agreement, a properly completed and executed Certification Regarding Beneficial Owners of Legal Entity Customers, together with copies of identifying documentation, and the Company undertakes to provide such additional supporting documentation as each Underwriter may reasonably request in connection with the verification of the foregoing certification.

 

(q)            Directed Share Program. The Company will comply with all applicable securities and other laws, rules and regulations in each jurisdiction in which the Directed Shares are offered in connection with the Directed Share Program.

 

6.            [Reserved].

 

7.            Certain Agreements of the Underwriters. Each Underwriter hereby severally represents and agrees that:

 

(a)            It has not and will not use, authorize use of, refer to or participate in the planning for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which term includes use of any written information furnished to the Commission by the Company and not incorporated by reference into the Registration Statement and any press release issued by the Company) other than (i) a free writing prospectus that contains no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation by reference) in the Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus, (ii) any Issuer Free Writing Prospectus listed on Annex A or prepared pursuant to Section 3(c) or Section 4(f) above (including any electronic road show), or (iii) any free writing prospectus prepared by such underwriter and approved by the Company in advance in writing.

 

 

(b)            It has not and will not, without the prior written consent of the Company, use any free writing prospectus that contains the final terms of the Shares unless such terms have previously been included in a free writing prospectus filed with the Commission.

 

(c)            It is not subject to any pending proceeding under Section 8A of the Securities Act with respect to the offering (and will promptly notify the Company if any such proceeding against it is initiated during the Prospectus Delivery Period).

 

8.            Conditions of Underwriters’ Obligations. The obligation of each Underwriter to purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing Date, as the case may be, as provided herein is subject to the performance by the X-Energy Parties of their respective covenants and other obligations hereunder and to the following additional conditions:

 

(a)            Registration Compliance; No Stop Order. No order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 5(a) hereof; and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representatives.

 

(b)            Representations and Warranties. The respective representations and warranties of the X-Energy Parties contained herein shall be true and correct on the date hereof and on and as of the Closing Date or the Additional Closing Date, as the case may be; and the statements of the X-Energy Parties and its officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date or the Additional Closing Date, as the case may be.

 

(c)            No Downgrade. Subsequent to the earlier of (A) the Applicable Time and (B) the execution and delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded any debt securities, convertible securities or preferred stock issued, or guaranteed by, the X-Energy Parties or any of their respective subsidiaries by any “nationally recognized statistical rating organization,” as such term is defined under Section 3(a)(62) under the Exchange Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of any such debt securities or preferred stock issued or guaranteed by the X-Energy Parties or any of their respective subsidiaries (other than an announcement with positive implications of a possible upgrading).

 

(d)            No Material Adverse Change. No event or condition of a type described in Section 3(h) hereof shall have occurred or shall exist, which event or condition is not described in the Pricing Disclosure Package (excluding any amendment or supplement thereto) and the Prospectus (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.

 

 

(e)            Officer’s Certificate. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, (x) a certificate of the chief financial officer or chief accounting officer of each X-Energy Party and one additional senior executive officer of each X-Energy Party who is satisfactory to the Representatives (i) confirming that such officers have carefully reviewed the Registration Statement, the Pricing Disclosure Package and the Prospectus and, to the knowledge of such officers, the representations of the X-Energy Parties set forth in Sections 3(b) and 3(d) hereof are true and correct, (ii) confirming that the other representations and warranties of the X-Energy Parties in this Agreement are true and correct and that the X-Energy Parties have complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the case may be, and (iii) to the effect set forth in paragraphs (a), (c) and (d) above.

 

(f)             Comfort Letters. (i) On the date of this Agreement and on the Closing Date or the Additional Closing Date, as the case may be, Ernst & Young LLP shall have furnished to the Representatives, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus, as applicable; provided, that the letter delivered on the Closing Date or the Additional Closing Date, as the case may be, shall use a “cut-off” date no more than two business days prior to such Closing Date or such Additional Closing Date, as the case may be.

 

(ii) On the date of this Agreement and on the Closing Date or the Additional Closing Date, as the case may be, the X-Energy Parties shall have furnished to the Representatives a certificate, dated the respective dates of delivery thereof and addressed to the Underwriters, of the chief financial officer of each X-Energy Party with respect to certain financial data contained in the Pricing Disclosure Package and the Prospectus, providing “management comfort” with respect to such information, in form and substance reasonably satisfactory to the Representatives.

 

(g)            Opinion and 10b-5 Statement of Counsel for the Company. Latham & Watkins LLP, counsel for the X-Energy Parties, shall have furnished to the Representatives, at the request of the Company, their written opinion and 10b-5 statement, dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives.

 

(h)            [Reserved].

 

 

(i)             Opinion and 10b-5 Statement of Counsel for the Underwriters. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, an opinion and 10b-5 statement, addressed to the Underwriters, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

 

(j)             No Legal Impediment to Issuance and/or Sale. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares by the Company; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares by the Company.

 

(k)            Good Standing. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, satisfactory evidence of the good standing of the X-Energy Parties and their respective subsidiaries in their respective jurisdictions of organization and their good standing in such other jurisdictions as the Representatives may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions.

 

(l)             Exchange Listing. The Shares to be delivered on the Closing Date or the Additional Closing Date, as the case may be, shall have been approved for listing on the Exchange, subject to official notice of issuance.

 

(m)            Lock-up Agreements. The “lock-up” agreements, each substantially in the form of Exhibit D hereto, between you and certain shareholders, officers and directors of the Company relating to sales and certain other dispositions of shares of Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date or the Additional Closing Date, as the case may be.

 

(n)            Additional Documents. On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Company shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.

 

All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.

 

 

9.            Indemnification and Contribution.

 

(a)           Indemnification of the Underwriters by the X-Energy Parties. The X-Energy Parties agree to indemnify and hold harmless each Underwriter, its affiliates, directors and officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable and documented legal fees and other reasonable and documented expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), any Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Securities Act, any Testing-the-Waters Communication prepared or authorized by the Company, any road show as defined in Rule 433(h) under the Securities Act (a “road show”) or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended), or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in paragraph (c) below.

 

(b)          [Reserved].

 

(c)          Indemnification of the X-Energy Parties. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the X-Energy Parties, their respective directors, their respective officers who signed the Registration Statement and each person, if any, who controls the X-Energy Parties within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, the Prospectus (or any amendment or supplement thereto), any Preliminary Prospectus, any Issuer Free Writing Prospectus, any Written Testing-the-Waters Communication, any road show or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended), it being understood and agreed upon that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the concession and reallowance figures appearing in the          paragraph under the caption “Underwriting”, the information contained in the          paragraph under the caption “Underwriting”.

 

 

(d)          Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to the preceding paragraphs of this Section 9, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 9 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under the preceding paragraphs of this Section 9. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section that the Indemnifying Person may designate in such proceeding and shall pay the reasonable and documented fees and expenses in such proceeding and shall pay the reasonable and documented fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by J.P. Morgan Securities LLC and any such separate firm for the X-Energy Parties, their respective directors, their respective officers who signed the Registration Statement and any control persons of the X-Energy Parties shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

 

 

(e)           Contribution. If the indemnification provided for in paragraphs (a), (b) or (c) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the X-Energy Parties, on the one hand, and the Underwriters on the other, from the offering of the Shares or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the X-Energy Parties, on the one hand, and the Underwriters on the other, in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the X-Energy Parties, on the one hand, and the Underwriters on the other, shall be deemed to be in the same respective proportions as the net proceeds (after deducting underwriting commissions and discounts, but before deducting expenses) received by the X-Energy Parties from the sale of the Shares and the total underwriting discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Shares. The relative fault of the X-Energy Parties, on the one hand, and the Underwriters on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the X-Energy Parties or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

(f)           Limitation on Liability. The X-Energy Parties and the Underwriters agree that it would not be just and equitable if contribution pursuant to paragraph (e) above were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (e) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (e) above shall be deemed to include, subject to the limitations set forth above, any reasonable and documented legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of paragraphs (e) and (f), in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Shares exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to paragraphs (e) and (f) are several in proportion to their respective purchase obligations hereunder and not joint.

 

(g)          Non-Exclusive Remedies. The remedies provided for in this Section 9 paragraphs (a) through (f) are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity.

 

(h)          Directed Share Program Indemnification. The X-Energy Parties agree to indemnify and hold harmless the Directed Share Underwriter, its affiliates, directors and officers and each person, if any, who controls the Directed Share Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (each a “Directed Share Underwriter Entity”) from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal fees and other expenses incurred in connection with defending or investigating any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred) (i) that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in any material prepared by or with the consent of any X-Energy Party for distribution to Participants in connection with the Directed Share Program or that arise out of, or are based upon, any omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) that arise out of, or are based upon, by the failure of any Participant to pay for and accept delivery of Directed Shares that the Participant agreed to purchase; or (iii) related to, arising out of, or in connection with the Directed Share Program, other than losses, claims, damages or liabilities (or expenses relating thereto) that are finally judicially determined to have resulted from the bad faith or gross negligence of the Directed Share Underwriter Entities.

 

 

(i)           In case any proceeding (including any governmental investigation) shall be instituted involving any Directed Share Underwriter Entity in respect of which indemnity may be sought pursuant to paragraph (g) above, the Directed Share Underwriter Entity seeking indemnity shall promptly notify the X-Energy Parties in writing and the X-Energy Parties, upon request of the Directed Share Underwriter Entity, shall retain counsel reasonably satisfactory to the Directed Share Underwriter Entity to represent the Directed Share Underwriter Entity and any others the X-Energy Parties may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any Directed Share Underwriter Entity shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Directed Share Underwriter Entity unless (i) the X-Energy Parties and such Directed Share Underwriter Entity shall have mutually agreed to the retention of such counsel, (ii) the X-Energy Parties have failed within a reasonable time to retain counsel reasonably satisfactory to such Directed Share Underwriter Entity, (iii) the Directed Share Underwriter Entity shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the X-Energy Parties or (iv) the named parties to any such proceeding (including any impleaded parties) include both the X-Energy Parties and the Directed Share Underwriter Entity and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The X-Energy Parties shall not, in respect of the legal expenses of the Directed Share Underwriter Entities in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Directed Share Underwriter Entities. Each X-Energy Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, such X-Energy Party agrees to indemnify the Directed Share Underwriter Entities from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time any Directed Share Underwriter Entity shall have requested any X-Energy Party to reimburse such Directed Share Underwriter Entity for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, each X-Energy Party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such X-Energy Party of the aforesaid request and (ii) such X-Energy Party shall not have reimbursed such Directed Share Underwriter Entity in accordance with such request prior to the date of such settlement. The X-Energy Parties shall not, without the prior written consent of the Directed Share Underwriter, effect any settlement of any pending or threatened proceeding in respect of which any Directed Share Underwriter Entity is or could have been a party and indemnity could have been sought hereunder by such Directed Share Underwriter Entity, unless (x) such settlement includes an unconditional release of the Directed Share Underwriter Entities from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of the Directed Share Underwriter Entity.

 

 

(j)           To the extent the indemnification provided for in paragraph (h) above is unavailable to a Directed Share Underwriter Entity or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then the X-Energy Parties in lieu of indemnifying the Directed Share Underwriter Entity thereunder, shall contribute to the amount paid or payable by the Directed Share Underwriter Entity as a result of such losses, claims, damages or liabilities (1) in such proportion as is appropriate to reflect the relative benefits received by the X-Energy Parties on the one hand and the Directed Share Underwriter Entities on the other hand from the offering of the Directed Shares or (2) if the allocation provided by clause 9(j)(1) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 9(j)(1) above but also the relative fault of the X-Energy Parties on the one hand and of the Directed Share Underwriter Entities on the other hand in connection with any statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the X-Energy Parties on the one hand and the Directed Share Underwriter Entities on the other hand in connection with the offering of the Directed Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Directed Shares (before deducting expenses) and the total underwriting discounts and commissions received by the Directed Share Underwriter Entities for the Directed Shares, bear to the aggregate public offering price of the Directed Shares. If the loss, claim, damage or liability is caused by an untrue or alleged untrue statement of material fact or the omission or alleged omission to state a material fact, the relative fault of the X-Energy Parties on the one hand and the Directed Share Underwriter Entities on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement or the omission or alleged omission relates to information supplied by the X-Energy Parties or by the Directed Share Underwriter Entities and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

(k)          The X-Energy Parties and the Directed Share Underwriter Entities agree that it would be not just or equitable if contribution pursuant to paragraph (j) above were determined by pro rata allocation (even if the Directed Share Underwriter Entities were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (j) above. The amount paid or payable by the Directed Share Underwriter Entities as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by the Directed Share Underwriter Entities in connection with investigating or defending such any action or claim. Notwithstanding the provisions of paragraph (i) above, no Directed Share Underwriter Entity shall be required to contribute any amount in excess of the amount by which the total price at which the Directed Shares distributed to the public were offered to the public exceeds the amount of any damages that such Directed Share Underwriter Entity has otherwise been required to pay. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in paragraphs (h) through (k) are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 

 

(l)           The indemnity and contribution provisions contained in paragraphs (h) through (k) shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Directed Share Underwriter Entity or any X-Energy Party, its officers or directors or any person controlling such X-Energy Party and (iii) acceptance of and payment for any of the Directed Shares.

 

10.          Effectiveness of Agreement. This Agreement shall become effective as of the date first written above.

 

11.          Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by written notice to the Company, if after the execution and delivery of this Agreement and on or prior to the Closing Date or, in the case of the Option Shares, prior to the Additional Closing Date (i) trading generally shall have been suspended or materially limited on or by any of the New York Stock Exchange or The Nasdaq Stock Market;(ii) trading of any securities issued or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.

 

12.          Defaulting Underwriter.

 

(a)          If, on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter defaults on its obligation to purchase the Shares that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Shares by other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Shares, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such Shares on such terms. If other persons become obligated or agree to purchase the Shares of a defaulting Underwriter, either the non-defaulting Underwriters or the Company may postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement and the Prospectus or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Registration Statement and the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 12, purchases Shares that a defaulting Underwriter agreed but failed to purchase.

 

 

(b)          If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters, the Company as provided in paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be, does not exceed one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Shares that such Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of Shares that such Underwriter agreed to purchase on such date) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made.

 

(c)          If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters, the Company as provided in paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to purchase Shares on the Additional Closing Date, as the case may be, shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 12 shall be without liability on the part of the X-Energy Parties, except that the X-Energy Parties will continue to be liable for the payment of expenses as set forth in Section 13 hereof and except that the provisions of Section 9 hereof shall not terminate and shall remain in effect.

 

(d)          Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the X-Energy Parties or any non-defaulting Underwriter for damages caused by its default.

 

13.          Payment of Expenses.

 

(a)          Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the X-Energy Parties will pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Shares and any taxes payable by the Company in that connection; (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free Writing Prospectus, any Pricing Disclosure Package and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the fees and expenses of the X-Energy Parties’ counsel and independent accountants; (iv) the reasonable and documented fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Shares under the laws of such jurisdictions as the Representatives may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including reasonable and documented related fees and expenses of counsel for the Underwriters); (v) the cost of preparing stock certificates; (vi) the costs and charges of any transfer agent and any registrar; (vii) all expenses and application fees incurred in connection with any filing with, and clearance of the offering by, FINRA, provided that the Underwriters’ counsel fees and expenses pursuant to this clause (vii) shall not, in the aggregate, exceed $50,000; (viii) all expenses incurred by the Company in connection with any “road show” presentation to potential investors provided, however, that the Underwriters shall pay one-half of the cost of any aircraft chartered in connection with the road show; (ix) all expenses and application fees related to the listing of the Shares on the Exchange; and (x) all of the fees and disbursements of counsel incurred by the Underwriters in connection with the Directed Share Program and stamp duties, similar taxes or duties or other taxes, if any, incurred by the Underwriters in connection with the Directed Share Program.

 

 

(b)          If (i) this Agreement is terminated pursuant to Section 11, (ii) the Company for any reason fail to tender the Shares for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Shares for any reason permitted under this Agreement, the Company agrees to reimburse the Underwriters for all reasonable and documented out-of-pocket costs and expenses (including the reasonable and documented fees and expenses of their counsel), other than those of a defaulting Underwriter in connection with a termination under Section 12 hereof, reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereby.

 

14.          Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and any controlling persons referred to herein, and the affiliates of each Underwriter referred to in Section 9 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such purchase.

 

15.          Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the X-Energy Parties and the Underwriters contained in this Agreement or made by or on behalf of the X-Energy Parties or the Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Shares and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the X-Energy Parties or the Underwriters or the directors, officers, controlling persons or affiliates referred to in Section 9 hereof.

 

16.          Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act; and (d) the term “significant subsidiary” has the meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act.

 

 

17.          Compliance with USA Patriot Act. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the X-Energy Parties, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.

 

18.          Miscellaneous.

 

(a)          Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives c/o:

 

J.P. Morgan Securities LLC
270 Park Avenue
New York, New York 10017
Attention: Equity Syndicate Desk
Fax: (212) 622-8358

 

Jefferies LLC
520 Madison Avenue
New York, New York 10022
Attention: General Counsel
Fax: (646) 619-4437

 

Moelis & Company LLC
399 Park Avenue, 4^th Floor
New York, New York 10022
Attention: General Counsel

 

Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
Attention: Equity Syndicate Desk

 

With a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
2000 Avenue of the Stars
Los Angeles, CA 90067
Attention: Michelle Gasaway

 

Notices to the X-Energy Parties shall be given to it at:

 

X-Energy, Inc.
530 Gaither Road, Suite 700
Rockville, Maryland 20850

 

 

With a copy to:

 

Latham & Watkins LLP
555 Eleventh Street, NW Suite 1000
Washington, D.C. 20004
Attention: Paul F. Sheridan Jr., Ian Schuman and John Slater

 

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

 

(c)          Submission to Jurisdiction. Each of the X-Energy Parties hereby submits to the exclusive jurisdiction of the U.S. federal and New York state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the X-Energy Parties waives any objection which it may now or hereafter have to the laying of venue of any such suit or proceeding in such courts. Each of the X-Energy Parties agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon such X-Energy Party and may be enforced in any court to the jurisdiction of which such X-Energy Party is subject by a suit upon such judgment.

 

(d)          [Reserved].

 

(e)          [Reserved].

 

(f)           Waiver of Jury Trial. Each of the parties hereto hereby waives any right to trial by jury in any suit or proceeding arising out of or relating to this Agreement.

 

(g)          Recognition of the U.S. Special Resolution Regimes.

 

(i) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

 

(ii) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

 

 As used in this Section 18(g):

 

“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

 

 

“Covered Entity” means any of the following:

 

(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

 

(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

 

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

 

“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

 

(h)            Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument. The parties agree to electronic contracting and signatures with respect to this Agreement. Delivery of an electronic signature to, or a signed copy of, this Agreement by facsimile, email or other electronic transmission shall be fully binding on the parties to the same extent as the delivery of the signed originals and shall be admissible into evidence for all purposes. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the parties hereto, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

(i)            Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.

 

(j)            Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

 

 

If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.

 

	Very truly yours,
	X-ENERGY, INC.
	By:
		Name:
		Title:

 

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

 

 

Accepted: As of the date first written above

 

J.P. MORGAN SECURITIES LLC

 

For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.

 

By:
	Authorized Signatory

 

JEFFERIES LLC

 

For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.

 

By:
	Authorized Signatory

 

MOELIS & COMPANY LLC

 

For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.

 

By:
	Authorized Signatory

 

MORGAN STANLEY & CO. LLC

 

For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.

 

By:
	Authorized Signatory

 

 

Schedule 1

 

Underwriter	Number of Shares
J.P. Morgan Securities LLC
Morgan Stanley & Co. LLC
Jefferies LLC
Moelis & Company LLC
Cantor Fitzgerald & Co.
UBS Securities LLC
TD Securities (USA) LLC
Guggenheim Securities, LLC
Nomura Securities International, Inc.
WR Securities, LLC
Total

 

 

Schedule 2

 

Significant Subsidiaries

 

 

Annex A

 

a.

Pricing Information Provided Orally by Underwriters

 

Initial Public Offering Price Per Share: $        

 

Number of Underwritten Shares: (         primary shares;          secondary shares)

 

Number of Option Shares:         

 

b.

Issuer Free Writing Prospectus Included in the Pricing Disclosure Package

 

[None.]

 

 

Annex B

 

Written Testing-the-Waters Communications

 

1.

Testing-the-Waters Presentation dated         .

 

 

Exhibit A

 

Testing the waters authorization (to be delivered by the issuer to J.P. Morgan, Jefferies, Moelis and Morgan Stanley in email or letter form)

 

In reliance on Section 5(d) and/or Rule 163B of the Securities Act of 1933, as amended (the “Act”), X-Energy, Inc. (the “Issuer”) hereby authorizes J.P. Morgan Securities LLC (“J.P. Morgan”), Jefferies LLC (“Jefferies”), Moelis & Company LLC (“Moelis”) and Morgan Stanley & Co. LLC (“Morgan Stanley”), their respective affiliates and their respective employees, to engage on behalf of the Issuer in oral and written communications with potential investors that are “qualified institutional buyers”, as defined in Rule 144A under the Act, or institutions that are “accredited investors”, within the meaning of Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12) or (a)(13) under the Act, to determine whether such investors might have an interest in the Issuer’s contemplated initial public offering (“Testing-the-Waters Communications”).

 

A “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Act. Each of J.P. Morgan, Jefferies, Moelis and Morgan Stanley, individually and not jointly, agrees that it shall not distribute any Written Testing-the-Waters Communication that has not been approved by J.P. Morgan, Jefferies, Moelis, Morgan Stanley and the Issuer; provided, however, that no such approval shall be required for any written communication that is administrative in nature (i.e., scheduling meetings) or that solely contains information already contained in a communication previously approved.

 

The Issuer represents that (i) except as disclosed to J.P. Morgan, Jefferies, Moelis and Morgan Stanley, it has not alone engaged in any Testing-the-Waters Communication, (ii) it has not authorized anyone other than J.P. Morgan, Jefferies, Moelis and Morgan Stanley to engage in Testing-the-Waters Communications and (iii) it is an “emerging growth company” as defined in Section 2(a)(19) of the Act (“Emerging Growth Company”). The Issuer agrees that it shall not authorize any other third party to engage on its behalf in oral or written communications with potential investors without the written consent of J.P. Morgan, Jefferies, Moelis and Morgan Stanley. The Issuer further agrees to promptly notify J.P. Morgan, Jefferies, Moelis and Morgan Stanley in writing if the Issuer hereafter ceases to be an Emerging Growth Company while this authorization is in effect. If at any time following the distribution of any Written Testing-the-Waters Communication there occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Issuer will promptly notify J.P. Morgan, Jefferies, Moelis and Morgan Stanley and will promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.

 

Nothing in this authorization is intended to limit or otherwise affect the ability of J.P. Morgan, Jefferies, Moelis, Morgan Stanley, their respective affiliates and their respective employees, to engage in communications in which they could otherwise lawfully engage in the absence of this authorization, including, without limitation, any written communication containing only one or more of the statements specified under Rule 134(a) under the Act. This authorization shall remain in effect until the Issuer has provided to J.P. Morgan, Jefferies, Moelis and Morgan Stanley a written notice revoking this authorization. All notices as described herein shall be sent by email to the attention of Lucy Brash at lucy.j.brash@jpmorgan.com, George O’Leary at goleary@jefferies.com, Angus Whelchel at Angus.Whelchel@moelis.com and Mauricio Dominguez at Mauricio.Dominguez@morganstanley.com, with copies to Michelle Gasaway at michelle.gasaway@skadden.com.

 

 

Exhibit B

 

Form of Waiver of Lock-up

 

J.P. MORGAN SECURITIES LLC

 

X-Energy, Inc.
Public Offering of Common Stock

 

,

20__

 

[Name and Address of
Officer or Director
Requesting Waiver]

 

Dear Mr./Ms. [Name]:

 

This letter is being delivered to you in connection with the offering by X-Energy, Inc. (the “Company”) of ______ shares of Class A common stock, $0.0001 par value (the “Common Stock”), of the Company and the lock-up letter dated__________________, 20__ (the “Lock-up Letter”), executed by you in connection with such offering, and your request for a [waiver] [release] dated__________________, 20__, with respect to ______ shares of Common Stock (the “Shares”).

 

The Representatives hereby agree to [waive] [release] the transfer restrictions set forth in the Lock-up Letter, but only with respect to the Shares, effective __________________, 20__ ; provided, however, that such [waiver] [release] is conditioned on the Company announcing the impending [waiver] [release] by press release through a major news service at least two business days before effectiveness of such [waiver] [release]. This letter will serve as notice to the Company of the impending [waiver] [release].

 

Except as expressly [waived] [released] hereby, the Lock-up Letter shall remain in full force and effect.

 

Yours very truly,

 

[Signature]

 

cc: Company

 

 

Exhibit C

 

Form of Press Release

 

X-Energy, Inc.
[Date]

 

X-Energy, Inc. (“Company”) announced today that J.P. Morgan Securities LLC, as Representative of the lead book-running managers in the Company’s recent public sale of shares of Class A common stock, is [waiving] [releasing] a lock-up restriction with respect to shares of the Company’s Class A common stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on , 20__, and the shares may be sold on or after such date.

 

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

 

 

 

Exhibit 5.1

  

	811 Main Street, Suite 3700
	Houston, TX 77002
	Tel: +1.713.546.5400 Fax: +1.713.546.5401
	www.lw.com

 

	FIRM / AFFILIATE OFFICES
	Austin	Milan
	Beijing	Munich
	Boston	New York
	Brussels	Orange County
	Chicago	Paris
, 2026	Dubai	Riyadh
	Düsseldorf	San Diego
	Frankfurt	San Francisco
	Hamburg	Seoul
	Hong Kong	Silicon Valley
	Houston	Singapore
	London	Tel Aviv
	Los Angeles	Tokyo
	Madrid	Washington, D.C.

 

X-Energy, Inc. 

530 Gaither Road, Suite 700 

Rockville, Maryland 20850

 

Re:

Registration Statement No. 333-294508 49,285,714 shares of Class A common stock, par value $0.0001 per share.

 

To the addressee set forth above:

 

We have acted as special counsel to X-Energy, Inc., a Delaware corporation (the “Company”), in connection with the proposed issuance of up to 49,285,714 shares (the “Shares”) of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”), which includes 6,428,571 shares of Common Stock issuable upon the exercise of the underwriters’ option to purchase additional shares of Common Stock. The Shares are included in a registration statement on Form S-1 under the Securities Act of 1933, as amended (the “Act”), initially filed with the Securities and Exchange Commission (the “Commission”) on March 20, 2026 (Registration No. 333-294508) (as amended, the “Registration Statement”). The term “Shares” shall include any additional shares of common stock registered by the Company pursuant to Rule 462(b) under the Act in connection with the offering contemplated by the Registration Statement. This opinion is being furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related prospectus, other than as expressly stated herein with respect to the issue of the Shares.

 

As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters. We are opining herein as to General Corporation Law of the State of Delaware and we express no opinion with respect to any other laws.

 

 

             , 2026

Page 2

 

 

Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof, when the amended and restated certificate of incorporation of the Company, substantially in the form most recently filed as an exhibit to the Registration Statement has been duly filed with the Secretary of State of the State of Delaware and when such Shares shall have been duly registered on the books of the transfer agent and registrar therefor in the name or on behalf of the purchasers and have been issued by the Company against payment therefor (not less than par value) in the circumstances contemplated by the form of underwriting agreement most recently filed as an exhibit to the Registration Statement, the issue and sale of the Shares will have been duly authorized by all necessary corporate action of the Company and the Shares will be validly issued, fully paid and nonassessable. In rendering the foregoing opinion, we have assumed that the Company will comply with all applicable notice requirements regarding uncertificated shares provided in the General Corporation Law of the State of Delaware.

 

This opinion is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the Act. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm in the related prospectus under the heading “Legal Matters.” We further consent to the incorporation by reference of this letter and consent into any registration statement filed pursuant to Rule 462(b) with respect to the Shares. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

 

Sincerely,

 

DRAFT

 

 

 

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	5
Section 1.3	Headings; References; Interpretation	5
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         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”), (iv) X-Energy Management, LLC, a Delaware limited liability company (“Management Holdings”) and (v) 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 Restructuring 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.

 

“A&R Charter of PubCo” means the Amended and Restated Certificate of Incorporation of X-Energy, Inc. substantially in the form attached hereto as Exhibit A.

 

 

“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 “Applicable Time” specified in the Underwriting Agreement.

 

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

 

 

“Exchange Act Effective Time” means the effective date and time of the registration on Form 8-A of the Class A Common Stock of PubCo pursuant to the Securities Exchange Act of 1934, as amended.

 

“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, IBX Opportunity GP, Inc.; X-energy Holdings, LLC; GM Enterprises, LLC; Ares X-Energy Holdings LP; Ares X-Energy Co-Invest LP; ACIP Investments Pooling LLC - Series 31; Jane Street Global Trading, LLC; and 1001094431 Ontario Limited.

 

“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 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
Certificate of Merger	Section 2.3(b)
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 2.6
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, and shall occur following and on the same Business Day as the Effectiveness, but prior to the Exchange Act Effective Time.

 

Section 2.1           Recapitalization.

 

(a)               XERC Recapitalization.

 

(i)                 Following and on the same Business Day as the Effectiveness, but prior to the Exchange Act Effective Time, all of XERC’s outstanding Units are hereby converted, effective as of the Recapitalization Effective Time, into the number of Common Units 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, but prior to the Exchange Act Effective Time, 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 Holder 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 Holder 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. Effective as of the Blocker Merger Effective Time (as defined below), (a) 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 prior to the Recapitalization Effective Time as an exhibit to the Certificate of Merger (as defined below), and (b) 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 2.3 immediately following the consummation of the XERC Recapitalization.

 

(b)               Pursuant to the Certificate of Merger in the form attached hereto as Exhibit C (the Certificate of Merger”), which will be filed with the Delaware Secretary of State prior to 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 (collectively, 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 Certificate of Merger, which shall be on the same Business Day as the Effectiveness and following the XERC Recapitalization, but prior to the Exchange Act Effective Time (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 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.

 

(iii)            The one share of PubCo’s common 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.

 

(f)                This Section 2.3, together with any related definitions and other provisions of this Agreement, constitutes an “agreement of merger” for purposes of the 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 opposite 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 Contribution, 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 Holdings will have the same provisions with respect to vesting, forfeiture and/or transfer restrictions that applied to the corresponding Common Unit contributed by Management Holdings.

 

(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(c)(i).

 

(ii)              Immediately following the transactions contemplated in Section 2.3, Section 2.5(a)(i) and Section 2.5(c)(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) $0.0001 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 date of the initial closing of the Initial Public Offering (the “IPO Closing”), each of the Continuing Equity Owners and PubCo hereby agree that the Seventh A&R LLC Agreement of XERC 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           Underwriting 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 its 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, taking into account any applicable extensions, 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 Contributions, 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 Certificate 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 (other than the Blockers) and each Blocker Investor hereto shall deliver a duly executed Internal Revenue Service Form W-9 of such Party to PubCo and XERC; provided, if a Blocker Investor is not eligible to deliver such a Form W-9, the Blocker in which such Blocker Investor holds Blocker Equity Interests shall deliver, in substantially the form attached hereto as Exhibit G (A) a duly executed certification satisfying the requirements of Treasury Regulations Sections 1.897-2(h) and 1.1445-2(c)(3), that such Blocker is not, nor has it been within the period described in Section 897(c)(1)(A)(ii) of the Code, a “United States real property holding corporation” as defined in Section 897(c)(2) of the Code and (B) an accompanying notice to the IRS satisfying the requirements of Treasury Regulations Section 1.897-2(h)(2)). XERC will provide a duly executed certification pursuant to Treasury Regulation Section 1.1445-11T(d)(2) in substantially the form attached hereto as Exhibit H, dated as of the date hereof.

 

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

 

 

BLOCKERS

 

XENON REACTOR COMPANY HOLDCO LLC

 

	By:
		Name:
		Title:

 

 

SAO BLOCKER, INC.

 

	By:
		Name:
		Title:

 

 

BE TECH VENTURES, INC.

 

	By:
		Name:
		Title:

 

 

BARRA HOLDINGS, L.L.C.

 

	By:
		Name:
		Title:

 

 

MULL HOLDINGS, L.L.C.

 

	By:
		Name:
		Title:

 

 

GIE FUND I X-ENERGY HOLDCO, LLC

 

	By:
		Name:
		Title:

 

 

72 X-ENERGY BLOCKER, LLC

 

	By:
		Name:
		Title:

 

 

VALORINA LLC

 

	By:
		Name:
		Title:

 

 

MANAGEMENT HOLDINGS

 

X-ENERGY MANAGEMENT, LLC

 

	By:
		Name:
		Title:

 

 

OTHER INVESTORS

 

	By:
		Name:
		Title:

 

 

 

Schedule 1

 

Investors

 

 

Schedule 2 

 

PubCo Board of Directors

 

 

Schedule 3 

 

PubCo Officers

 

 

Exhibit A 

 

A&R Certificate of Incorporation of PubCo

 

 

Exhibit B

 

A&R Bylaws of PubCo

 

 

Exhibit C

 

Certificate of Merger

 

 

Exhibit D 

 

Eighth A&R LLCA of XERC

 

 

Exhibit E 

 

Tax Receivable Agreement

 

 

Exhibit F 

 

Registration Rights Agreement

 

 

Exhibit G 

 

Form of Blocker FIRPTA Certificate and Accompanying Notice

 

Pursuant to Treasury Regulations Sections 1.897-2(h), 1.1445-2(c)(3) and 1.897-2(h)(2)

 

 

Exhibit H

 

Form of FIRPTA Certificate

 

Pursuant to Treasury Regulations Section 1.1445-11T(d)(2)(i)

 

 

 

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	13
Section 2.1.    Basis Adjustments; XERC 754 Election	13
Section 2.2.    Attribute Schedules	14
Section 2.3.    Tax Benefit Schedules	14
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	20
Section 4.1.    Early Termination of Agreement; Acceleration Events	20
Section 4.2.    Early Termination Notice	21
Section 4.3.    Payment upon Early Termination	22
Article V Subordination and Late Payments	22
Section 5.1.    Subordination	22
Section 5.2.    Late Payments by the Corporation	23
Article VI Tax Matters; Consistency; Cooperation	23
Section 6.1.    Participation in the Corporation’s and XERC’s Tax Matters	23
Section 6.2.    Consistency	24
Section 6.3.    Cooperation	24
Article VII Miscellaneous	24
Section 7.1.    Notices	24
Section 7.2.    Counterparts	25
Section 7.3.    Entire Agreement; No Third-Party Beneficiaries	25
Section 7.4.    Severability	26
Section 7.5.    Assignments; Amendments; Successors; No Waiver	26
Section 7.6.    Resolution of Disputes; Governing Law	27

 

 

Section 7.7.     Reconciliation Procedures	29
Section 7.8.     Withholding	29
Section 7.9.     Admission of the Corporation into a Consolidated Group; Transfers of Corporate Assets	30
Section 7.10.   Confidentiality	30
Section 7.11.   Change in Law	31
Section 7.12.   Interest Rate Limitation	31
Section 7.13.   Independent Nature of Rights and Obligations	32
Section 7.14.   Tax Characterization	32

 

 

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) and 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, Xenon Reactor Company Holdco LLC and certain other former Members of XERC (each a “Blocker Company” and collectively, the “Blocker Companies”) were taxable as corporations for U.S. federal income tax purposes immediately prior to the applicable Merger;

 

WHEREAS, as a result of certain reorganization transactions undertaken in connection with the IPO of the Corporation, (i) each Blocker Company merged with and into 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, in connection with 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 (i) the Corporation’s proportionate share of the XERC Group’s tax basis in the Reference Assets that is 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, in each case, attributable to the Common Units acquired by the Corporation from the Blocker Companies in the Mergers and (ii) any increase or decrease (if any) to such tax basis referred to in clause (i) pursuant to Treasury Regulations Section 1.743-1(f) to the extent attributable to the applicable Blocker Company’s existing tax basis (determined immediately prior to the Merger); 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,(v) Imputed Interest and (vi) the TRA Accounting and Legal Expenses. 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, (ii) with respect to a Change of Control event pursuant to Section 4.1(b), the date of the applicable Change of Control and (ii) with respect to a Material Breach event 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 that is 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) pursuant to Treasury Regulations Section 1.743-1(f) to the extent attributable to the Exchange TRA Party’s existing tax basis; 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 depreciable or amortizable (without taking into account Section 704(c) of the Code) (including assets that will eventually be subject to deprecation or amortization, once placed in service) for U.S. federal income tax purposes 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 7.7(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-Basis Adjusted and Non-Blocker Transferred Basis and, without duplication, exclude any Blocker Tax Attributes, (iii) the Corporation shall not take into account any deductions from Imputed Interest or TRA Accounting and Legal Expenses 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-Basis Adjusted” 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 attributable to Common Units transferred 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 attributable to Common Units transferred 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 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, 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).

 

“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.

 

“Penalty Rate” means a rate per annum equal to 12%.

 

“Permitted Time” is defined in Section 4.1(c).

 

 

“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 7.7(a).

 

“Reconciliation Procedures” is defined in Section 7.7(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, IPO or the Common Unit Contribution). 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.

 

“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 the TRA Representative shall be (i) 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) and (ii) if no TRA Party meets the criteria in clause (i), then such TRA Party that is an Affiliate of a TRA Party that was an original signatory of this Agreement; provided, that, in the event multiple TRA Parties fulfill the criteria in clause (ii), the TRA Representative shall be the TRA Party that meets the criteria in clause (ii) and has the greatest economic rights under this Agreement at such time.

 

“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 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).

 

“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) 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. For the avoidance of doubt, 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 the Taxable Year of the IPO and 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 the Taxable Year of the IPO and 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)). 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 allocation method set forth in Section 5.04(b) of the Operating Agreement.

 

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 TRA Representative shall employ the Reconciliation Procedures described in Section 7.7and 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 applicable Blocker Company 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 determined in accordance with the percentage interest of Common Units held by such Exchange TRA Party 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 Exchange TRA Party to the extent it is attributable to Common Units that were transferred in an Exchange or the Common Unit Contribution by such Exchange TRA Party;

 

(D) any Basis Adjustments shall be determined separately with respect to each Exchange TRA Party and are Attributable to each Exchange TRA Party in an amount equal to the total Basis Adjustment relating to Common Units delivered to the Corporation by such Exchange TRA Party in the Exchange or the Common Unit Contribution or such total Basis Adjustment attributable to any distribution (or deemed distribution) to such Exchange TRA Party; and

 

(E) any deduction to the Corporation in respect of Imputed Interest and the TRA Accounting and Legal Expenses 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) or bear such TRA Accounting and Legal Expenses pursuant to this Agreement.

 

(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 each case, 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)) (A) with respect to any transfer of Common Units by an Exchange TRA Party pursuant to the Common Unit Contribution or 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 Common Unit Contribution or 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 Common Unit Contribution or Exchange plus the Assumed State and Local Tax Rate for such Taxable Year and (2) 85% of (x) the Existing Basis that is Attributable to Exchange TRA Party and allocable to the Common Unit Contribution or the Exchange, as applicable and (y) without duplication of any amounts reflected in (x), the Covered Tax Assets relating to the Common Unit Contribution or the Exchange, as applicable, 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 or the Exchange shall not exceed the amount described in this clause (A)(II) and (B) 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 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 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 (B)(II). Reasonable estimates of the expected TRA Accounting and Legal Expenses shall be made for purposes of determining the amount of Covered Tax Assets for purposes of this Section 3.1.

 

 

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 or Subordination 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 no interest rate, the Agreed Rate, or the Penalty Rate, as applicable, shall apply) in such certain circumstances described in the 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 7.7.

 

 

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 upon such Change of Control, a majority of the Independent Directors may approve in writing to terminate this Agreement under the terms and conditions (including the amount of any payment obligations, if any) determined in the sole judgement of such Independent Directors and such written approval shall be considered a written approval by the Corporation of an amendment of this Agreement in accordance with Section 7.5(b), which amendment is subject to the written approval of the TRA Representative under Section 7.5(b). Subject to an amendment of this Agreement as described in the preceding sentence, 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; provided, however, to avoid double-counting, any Covered Tax Asset that was deemed utilized under the Valuation Assumptions shall be excluded from the determination of the Hypothetical Tax Liability thereafter. 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 (any such time when clause (i) or this clause (ii) is applicable, the “Permitted Time”), such failure to make a Tax Benefit Payment will not constitute a Material Breach and such payment obligation will not accrue any interest for the benefit of the TRA Parties during the Permitted Time; provided that (A) [reserved], (B) the Corporation shall promptly 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) within thirty (30) days will result in the Default Interest Rate applying to such payment obligation for the benefit of the TRA Parties in accordance with Section 5.2, provided that the Default Rate shall be replaced by the Penalty Rate. 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 paragraph (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 Change of Control pursuant to Section 4.1(a) or a Material Breach pursuant to Section 4.1(c), as soon as reasonably practicable following the occurrence of the Change of Control or Material Breach giving rise to the use of the Valuation Assumptions. 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, the “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 Representative, such consent not to be unreasonably withheld, conditioned or delayed. If the TRA Representative fail to respond to any notice with respect to the settlement of any such issue within ten (10) calendar days of its receipt of the applicable notice, the TRA Representative shall be deemed to have consented to the proposed settlement or other disposition. Notwithstanding the foregoing, (i) the Corporation shall notify the TRA Representative of, and keep it 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 Representative shall have the right to participate in and to monitor at its 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 the Initial TRA Representative, to:

 

X-Energy Holding, LLC
801 Thompson Ave.

Rockville, MD 20852
Attn: Chief Legal Officer
Email: ted@ibx-llc.com

 

With a copy (which will not constitute notice) to:

 

Simpson Thacher & Bartlett LLP
425 Lexington Avenue

New York, New York 10017
Attn: Will Golden
Email: wgolden@stblaw.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 Parties and delivered to the other Parties, it being understood that all 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 (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 the TRA Representative’s 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 7.6(b)or 7.6(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 the 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 Corporation and the 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 TRA Representative (on behalf of the TRA Parties) incurred in the conduct of such resolution process shall be allocated between the Corporation, on the one hand, and the TRA Representative (on behalf of the TRA Parties), 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 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 the TRA Representative, 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 7.09(b), 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 7.09(a) transfers its assets (i) 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, (ii) pursuant to a contribution described in Section 351(a) of the Code or (iii) pursuant to any other transaction to which Section 381(a) of the Code applies, the transfer shall 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 7.09(b), so long as such entity transfers assets to a corporation with which the Corporation or any member of the group described in Section 7.09(a) files a consolidated Tax Return pursuant to Section 1501 of the Code.

 

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 7.10 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 7.10, the Corporation shall have the right and remedy to have the provisions of this Section 7.10 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 Parties 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 Party pursuant hereto or thereto, shall be deemed to constitute the Parties acting as a partnership, association, joint venture or any other kind of entity, or create a presumption that the 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) with respect to XERC and such members of XERC.

 

[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:
	By:
	Name:
	Title:
	By:
	Name:
	Title:
	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, 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:
X-ENERGY REACTOR COMPANY, LLC
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 and any additional investor that becomes a party to this Agreement in accordance with Section 2.12 of this Agreement, each of which is referred to in this Agreement as a “Holder”.

 

RECITALS:

 

A.            The Corporation is contemplating an offer and sale of shares of its 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 of such Units 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 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 to this Agreement as a “Holder” and certain other Existing Holders will 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 who hold Common Units in the Company 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 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, 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, the Corporation and the Company agree that the Prior Agreement is amended and restated in its entirety by this Agreement, and the Parties further agree as follows:

 

1.            Definitions. For purposes of this Agreement:

 

1.1            “Affiliate” with respect to any specified Person means 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 after this Agreement 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            “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.

 

1.8            “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 of such equity interests 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.

 

1.9            “Class A Common Stock” has the meaning set forth in the recitals.

 

 

1.10            “Class B Common Stock” means the Corporation’s Class B common stock, par value $0.0001 per share.

 

1.11            “Common Units” has the meaning set forth in the recitals.

 

1.12            “Company” has the meaning set forth in the recitals.

 

1.13            “Continuing Equity Owners” has the meaning set forth in the recitals.

 

1.14            “Corporation” has the meaning set forth in the recitals.

 

1.15            “Damages” means any loss, damage, claim or liability (joint or several) to which a Party 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 of such loss, damage, claim or liability) 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 in such registration statement or any amendments or supplements to such registration statement; (ii) an omission or alleged omission to state in any such registration statement a material fact required to be stated in any such registration statement, or necessary to make the statements in such registration statement 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.

 

1.16            “Demand Registration” means a request for registration made pursuant to Section 2.1(a) or Section 2.1(b)).

 

1.17            “End of Suspension Notice” has the meaning set forth in Section 2(c)(i).

 

1.18            “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended.

 

1.19            “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.

 

1.20            “FINRA” means the Financial Industry Regulatory Authority.

 

1.21            “Free Writing Prospectus” means a free writing prospectus, as defined in Rule 405.

 

1.22            “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.

 

1.23            “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.

 

 

1.24            “Holder” has the meaning set forth in the recitals.

 

1.25            “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.

 

1.26            “Indemnified Party” has the meaning set forth in Section 2.10.

 

1.27            “Indemnifying Party” has the meaning set forth in Section 2.10.

 

1.28            “Initiating Holders” collectively means Holders who properly initiate a registration request under Section 2.1(a) and 2.1(b) of this Agreement.

 

1.29            “IPO” has the meaning set forth in the recitals.

 

1.30            “LLC Agreement” has the meaning set forth in the recitals.

 

1.31            “Long-Form Registrations” has the meaning set forth in Section 2.1(a).

 

1.32            “Majority of the Registrable Securities” with respect to any group of Registrable Securities described in this Agreement, means the Holders of a majority of such group of Registrable Securities.

 

1.33            “MNPI” means material non-public information within the meaning of Regulation FD promulgated under the Exchange Act.

 

1.34            “Opt-Out Request” has the meaning set forth in Section 3.2..

 

1.35            “Original Equity Owners” has the meaning set forth in the recitals.

 

1.36            “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 of the foregoing, or any other entity.

 

1.37            “Piggyback Registration” has the meaning set forth in Section 2.2.

 

1.38            “Policies” has the meaning set forth in Section 3.2..

 

1.39            “Preferred Units” collectively means 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 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 other shares of Class A Common Stock owned (or which may be acquired upon exercise or conversion of any securities held), directly or indirectly, by Holders, and (iii) 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 (ii) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization or similar transaction. As to any particular Registrable Securities owned by any Holder, 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 under Rule 144, 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 shares of Class B Common Stock may constitute Registrable Securities, under no circumstances shall the Corporation be obligated to register shares of Class B Common Stock, and only shares of Class A Common Stock 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 under the Securities Act of 1933, as amended.

 

 

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            “Shelf Offering” has the meaning set forth in Section 2.1(e)(ii).

 

1.53            “Shelf Offering Notice” has the meaning set forth in Section 2.1(e)(ii).

 

1.54            “Shelf Offering Request” has the meaning set forth in Section 2.1(e)(ii).

 

1.55            “Shelf Registrable Securities” has the meaning set forth in Section 2.1(e)(ii).

 

1.56            “Shelf Registration” has the meaning set forth in Section 2.1(e)(i).

 

1.57            “Shelf Registration Statement” has the meaning set forth in Section 2.1(e)(i).

 

1.58            “Short-Form Registrations” has the meaning set forth in Section 2.1(a).

 

1.59            “Subsidiary” with respect to the Corporation, means 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.

 

1.60            “Suspension Event” has the meaning set forth in Section 2.1(c)(i).

 

1.61            “Suspension Notice” has the meaning set forth in Section 2.1(c)(i).

 

1.62            “Suspension Period” has the meaning set forth in Section 2.1(c)(i).

 

1.63            “Underwritten Takedown” has the meaning set forth in Section 2.1(e)(ii).

 

1.64            “WKSI” means a “well-known seasoned issuer” as defined under Rule 405.

 

 

2.             Registration Rights. The Corporation covenants and agrees as follows:

 

2.1            Demand Registration.

 

(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 Amazon; or (ii) holders of at least a majority of the Registrable Securities held by Ares; that the Corporation file a Form S-1 registration statement or any similar long-form registration statement (“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 within 10 days after the date such request is given, give notice of such request (the “Demand Notice”) to all Holders other than the Initiating Holders. In addition and as soon as practicable, and in any event within 60 days after the date such request is given by the Initiating Holders, the Corporation shall 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 Amazon, Ares and all other Holders collectively pursuant to this Section 2.1(a). 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. All Long-Form Registrations shall be underwritten registrations unless otherwise approved by the applicable Initiating Holder.

 

(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 statement (“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 within 10 days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders. In addition and as soon as practicable, and in any event within 45 days after the date such request is given by the Initiating Holders, the Corporation shall 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 Initiating Holders may request that the registration be made pursuant to Rule 415 under the Securities Act (a “Shelf Registration”). In the event the Corporation is a WKSI at the time any request from an Original Equity Owner for a Demand Registration is submitted to the Corporation, such Shelf Registration shall 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 of such filing 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 notice (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. Except as required by law, 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 in the Suspension Notice 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. Any such End of Suspension Notice shall be given by the Corporation to the Holders and their counsel 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 90 days before the Corporation’s good faith estimate of the date of filing of, and ending on a date that is 90 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, and the Holders have been provided with their rights pursuant to Section 2.2; (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 90 days before the Corporation’s good faith estimate of the date of filing of, and ending on a date that is 90 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, and the Holders have been provided with their rights pursuant to Section 2.2; 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 for such registration, 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 in the Demand Notice 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.

 

 

(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 pursuant to Section 2.1(b), 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. 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 15^th 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 Original Equity Holder. In order for any of the Holders 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 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. The Corporation shall pay all Registration Expenses in connection with any such offering. Notwithstanding the foregoing, each Holder 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 Holder. 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. Subject to Section 2.3 and Section 2.12 of this Agreement, the Corporation, 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. 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), the Corporation shall 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 in the Shelf Offering Notice 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. In such event and subject to the limitations set forth in Section 2(e)(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)            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 Holder 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, such period, the “Extended Period”). In such event, 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) or within the Extended Period, 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 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)            At the request of Holders representing a Majority of the Registrable Securities covered by a Shelf Registration Statement, the Corporation shall 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 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 holds Registrable Securities notice of its intention to effect such Piggyback Registration. Subject to the terms of Section 2.2(a), for any such Piggyback Registration (and in all related registrations or qualifications under blue sky laws and related underwriting), the Corporation shall include all Registrable Securities with respect to which the Corporation has received written requests for inclusion in any such Piggyback Registration within twenty (20) days after delivery of the Corporation’s notice.

 

(a)            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).

 

(b)            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 of that intent 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 participating in 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 an underwriting pursuant to Section 2.3(a) or (b) 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. The liability of any 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) in connection with an underwriting pursuant to Section 2.3(a) or (b) 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 as follows: (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 in such registration; (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 agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled under this Agreement to approve such arrangements. Notwithstanding the foregoing, no Holder shall be required to sell more than the number of Registrable Securities such Holder has requested to include, 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. 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 reasonably required under the terms of such underwriting arrangements.

 

 

(f)            In connection with any Public Offering pursuant to Section 2.2, if 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 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 in such registration; 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. 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. 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.” 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 the immediately preceding 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. 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), each Person that is participating in any registration under this Agreement 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 Section 2.6(i)(B) or (C) 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 such lock-up agreements, 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, the Corporation shall use its commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition of such registration and sale, and pursuant to such registration and sale 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 under such registration statement, 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 or as provided in Section 2.1(c) or Section 2.4;

 

 

(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. The Corporation shall not be required, however, 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: (i) the selling Holders, (ii) any managing underwriter(s) participating in any disposition pursuant to such registration statement, and (iii) 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. The Corporation, as expeditiously as reasonably possible, shall 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 with such registration statement;

 

 

(i)            notify each seller of such Registrable Securities (A) promptly after it receives notice of any registration and sale of Registrable Securities, of the date and time when such registration statement and each post-effective amendment to such registration statement 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 under such state securities or blue sky law has been obtained, (B) promptly after receipt 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 to such registration and sale 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 in such registration statement 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 after such prospectus is 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 in such prospectus 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 for such purpose;

 

(k)            take all reasonable actions to ensure that any Free-Writing Prospectus utilized in connection with any Demand Registration or Piggyback Registration complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required, is retained in accordance with the Securities Act to the extent required 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 in such prospectus, in light of the circumstances under which they were made, not misleading;

 

(l)              otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;

 

(m)            to the extent that, in its sole and exclusive judgment, a Holder, 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 in such statements, in form and substance satisfactory to the Corporation, which in the reasonable judgment of such Holder and its counsel should be included;

 

(n)            in the event of: (i) the issuance of any stop order suspending the effectiveness of a registration statement; or (ii) 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;

 

(o)            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 of such Registrable Securities to consummate the disposition of such Registrable Securities;

 

 

(p)            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;

 

(q)            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;

 

(r)            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;

 

(s)            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 underwriters reasonably request;

 

(t)            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. Such opinion shall be addressed to the underwriters and the Holders of such Registrable Securities being sold;

 

(u)            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;

 

(v)            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

 

(w)            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. Additionally, if at any time when the Corporation is required to re-evaluate its WKSI status the Corporation determines that it is not a WKSI, the Corporation shall 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.

 

The Corporation shall also ensure that, at all times after any registration statement covering a public offering of securities of the Corporation under the Securities Act has become effective, the Corporation’s insider trading policy shall provide that its 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 of such Corporation, such officer shall participate fully in a Public Offering process in a manner customary and reasonable for persons in like positions and consistent with the officer’s 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: (i) information regarding itself, (ii) the Registrable Securities held by it, and (iii) 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 information regarding such Holder and the distribution of such Registrable Securities that 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 then, subject to any applicable lock-ups, the Corporation shall work with the foregoing persons to facilitate such in-kind distribution in the manner reasonably requested. Such distributees shall have the right to become a Party by the joinder in the form of Exhibit A to this Agreement and upon execution of the joinder 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 (collectively, such 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). For the avoidance of doubt, such Holders shall not forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b) 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, in which case the Holders shall not be required to pay any of such expenses. 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. The Corporation shall also pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred 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. Any such consent shall not be unreasonably withheld. The Corporation shall not 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 to such registration statement, prospectus or offering circular after the Corporation has furnished such Holder with a sufficient number of copies of such registration statement, prospectus or offering circular or any amendments or supplements to such registration statement prospectus or offering circular.

 

(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. The indemnity set forth in the preceding sentence shall be expressly limited to only those Damages that 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. Each such selling Holder shall also pay to the Corporation and each other aforementioned Person any legal or other expenses reasonably incurred 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. Such 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 of any such action is to be made against any indemnifying party under this Section 2.10 (the “Indemnifying Party”), give the Indemnifying Party notice of the commencement of the action. The Indemnifying Party shall have the right to participate in such action. To the extent it desires, the Indemnifying Party shall have the right to participate jointly with any other Indemnifying Party to which notice has been given, and to assume the defense of such action 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 or due to the existence of actual or potential additional defenses available to such Indemnified Party. 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 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 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 by the foregoing provisions 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)            upon request, so long as the Holder owns any Registrable Securities, furnish to any such Holder: (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 and without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding, the Corporation shall not 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 in accordance with Section 2.12. The Corporation represents and warrants that it has not granted any Person other than the Parties 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        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)            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

 

(b)            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 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).

 

3.1          Each Holder agrees that it will maintain the confidentiality of such MNPI. To the extent such Holder is not a natural person, confidential treatment of such MNPI 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. 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. In no event shall any Holder’s duties under this Agreement or under any common law or other principle or source in any manner be deemed or construed as limiting such Holder’s, its Affiliates’ or their respective representatives’ ability to trade any publicly-listed or any other security other than the Corporation’s, and any such duties are disclaimed by the Parties. Notwithstanding any provision in this Agreement to the contrary, Holders, their Affiliates and their respective representatives shall not be required to give notice to the Corporation, and shall not be prohibited by this Agreement from disclosing any information, to the extent such request or requirements originate from a regulatory authority or self-regulatory authority and occur in the course of a confidential examination or inspection of the business or operations of such Holder, its Affiliates or their representatives.

 

At any time and from time to time (including after receiving information regarding any potential Public Offering), each Holder shall have the right, to elect to not receive any notice that the Corporation or any other Holders otherwise are required to deliver pursuant to this Agreement. Any Holder wishing to exercise such right shall first deliver to the Corporation a written statement signed by such Holder that it does not want to receive any notices under this Agreement (an “Opt-Out Request”). Upon delivery of the Opt-Out Request 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 such Holders to the extent that the Corporation or such other Holders reasonably expect receipt of such notice or information 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. 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.             Miscellaneous.

 

4.1          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). In connection with any such assignment, (x) the Corporation shall, within a reasonable time after such transfer, be 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 shall agree in a written instrument delivered to the Corporation to be bound by and subject to the terms and conditions of this Agreement. To determine the number of shares of Registrable Securities held by a transferee, the holdings of the transferring Holder shall be aggregated together with those 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. 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 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.

 

4.2          Business Days. If any time period for giving notice or taking action under this Agreement expires on a day that is not a business day, the time period shall automatically be extended to the immediately following business day.

 

4.3          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.

 

4.4          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.

 

4.5          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.

 

4.6          No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.

 

 

4.7          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.

 

4.8          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 different than any other Holder, shall be effective against such Holder without the consent of such Holder that is materially and adversely affected by any such amendment, modification, termination or waiver. 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 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 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.

 

4.9          Remedies. The Parties 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 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. Consequently, in addition to any other rights and remedies existing under this Agreement, 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.

 

 

4.10        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. Any 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.

 

4.11        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.

 

4.12        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 (the “Chosen Courts”) 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 the Chosen Courts; 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 Chosen 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 the Chosen Courts.

 

(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.

 

4.13        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 of such Holder, 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. The Parties expressly acknowledge and agree 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 of such Holder, 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.

 

4.14        Further Assurances. In connection with this Agreement and the transactions contemplated in this Agreement, 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 in this Agreement.

 

[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 after this Joinder 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 of this Joinder by the Corporation upon the execution of a counterpart of this Joinder, the undersigned 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 / redemption / exchange] of the undersigned’s [shares of Class B Common Stock / common units of X-Energy Reactor Company, LLC]) 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 21.1

 

Subsidiaries of X-Energy, Inc.

 

Name*	State or Other Jurisdiction of Incorporation or Organization
X-Energy Reactor Company, LLC	Delaware

 

* This list omits subsidiaries that would not constitute a “significant subsidiary” pursuant to Rule 102(w) of Regulation S-X.

 

 

 

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. 3 to the Registration Statement (Form S-1) and related Prospectus of X-Energy, Inc. dated April 15, 2026.

 

/s/ Ernst & Young LLP

 

Tysons, Virginia

 

April 15, 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. 3 to the Registration Statement (Form S-1) and related Prospectus of X-Energy, Inc dated April 15, 2026.

 

/s/ Ernst & Young LLP

 

Tysons, Virginia

 

April 15, 2026

 

 

 

S-1 S-1/A EX-FILING FEES 333-294508 0002088896 X-Energy, Inc. N/A N/A 0002088896 2026-04-15 2026-04-15 0002088896 1 2026-04-15 2026-04-15 0002088896 2 2026-04-15 2026-04-15 iso4217:USD xbrli:pure xbrli:shares

Calculation of Filing Fee Tables

S-1

X-Energy, Inc.

Table 1: Newly Registered and Carry Forward Securities	☐Not Applicable

		Security Type	Security Class Title	Fee Calculation or Carry Forward Rule	Amount Registered	Proposed Maximum Offering Price Per Unit	Maximum Aggregate Offering Price	Fee Rate	Amount of Registration Fee	Carry Forward Form Type	Carry Forward File Number	Carry Forward Initial Effective Date	Filing Fee Previously Paid in Connection with Unsold Securities to be Carried Forward
Newly Registered Securities
Fees to be Paid	1	Equity	Class A common stock	457(a)	44,022,556.10526	$ 19.00	$ 836,428,566.00	0.0001381	$ 115,510.78
Fees Previously Paid	2	Equity	Class A common stock	457(o)			$ 100,000,000.00		$ 13,810.00
Carry Forward Securities
Carry Forward Securities
			Total Offering Amounts:				$ 936,428,566.00		$ 129,320.78
			Total Fees Previously Paid:						$ 13,810.00
			Total Fee Offsets:						$ 0.00
			Net Fee Due:						$ 115,510.78

Offering Note

1	Includes Class A common stock, par value $0.0001 per share ("Class A common stock"), issuable upon exercise of the underwriters' option to purchase additional Class A common stock, if any. Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.
2	Includes Class A common stock, par value $0.0001 per share ("Class A common stock"), issuable upon exercise of the underwriters' option to purchase additional Class A common stock, if any. Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

Table 2: Fee Offset Claims and Sources	☑Not Applicable

		Registrant or Filer Name	Form or Filing Type	File Number	Initial Filing Date	Filing Date	Fee Offset Claimed	Security Type Associated with Fee Offset Claimed	Security Title Associated with Fee Offset Claimed	Unsold Securities Associated with Fee Offset Claimed	Unsold Aggregate Offering Amount Associated with Fee Offset Claimed	Fee Paid with Fee Offset Source
Rules 457(b) and 0-11(a)(2)
Fee Offset Claims
Fee Offset Sources
Rule 457(p)
Fee Offset Claims
Fee Offset Sources

Table 3: Combined Prospectuses	☑Not Applicable

	Security Type	Security Class Title	Amount of Securities Previously Registered	Maximum Aggregate Offering Price of Securities Previously Registered	Form Type	File Number	Initial Effective Date