8-K
Terrestrial Energy Inc. /DE/ (IMSR)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934
Date of Report (Date of earliest event reported):
October 28, 2025
TERRESTRIAL ENERGY INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-42252 | 98-1785406 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File Number) | (IRS Employer<br><br>Identification No.) |
2730 W. Tyvola Road, Suite 100
Charlotte, NC 28217
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including
area code: (646) 687-8212
N.A.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.0001 per share | IMSR | The Nasdaq Stock Market LLC |
| Redeemable Warrants, each whole warrant exercisable for one Common Stock at a price of $11.50 per share | IMSRW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
INTRODUCTORY
NOTE
Terms used in this Current Report on Form 8-K (this “Current Report”) but not defined herein, or for which definitions are not otherwise incorporated by reference herein, shall have the meanings given to such terms in the Proxy Statement/Prospectus (as defined below) in the section entitled “Frequently Used Terms” and such definitions are incorporated by reference herein.
This Current Report incorporates by reference certain information from reports and other documents that were previously filed with the Securities and Exchange Commission (the “SEC”), including certain information from the Proxy Statement/Prospectus. To the extent there is a conflict between the information contained in this Current Report and the information contained in such prior reports and documents incorporated by reference herein, the information in this Current Report controls.
Overview
As previously announced, Terrestrial Energy Inc. (“New Terrestrial Energy”) (formerly known as HCM II Acquisition Corp., or “HCM II”), a Delaware corporation (prior to the Domestication, a Cayman Islands exempted company), entered into that certain Business Combination Agreement, dated as of March 26, 2025 (as amended from time to time, the “Business Combination Agreement”), by and among HCM II, Terrestrial Energy Development Inc., a Delaware corporation (formerly known as Terrestrial Energy Inc., or “LegacyTerrestrial Energy”), and HCM II Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of HCM II (“MergerSub”), pursuant to which: (1) at the closing of the transactions contemplated by the Business Combination Agreement (the “Closing”) and following the Domestication (as defined below), Merger Sub merged with and into Legacy Terrestrial Energy (the “Merger”), with Legacy Terrestrial Energy surviving as a wholly owned subsidiary of New Terrestrial Energy, resulting in a combined company whereby New Terrestrial Energy became the sole stockholder of Legacy Terrestrial Energy, as more fully described in the definitive proxy statement and final prospectus of HCM II, dated September 26, 2025 (the “Proxy Statement/Prospectus”), which was filed with the SEC; (2) HCM II domesticated (the “Domestication”) as a Delaware corporation in accordance with the General Corporation Law of the State of Delaware (the “DGCL”), the Companies Act (As Revised) of the Cayman Islands (the “CompaniesAct”) and the amended and restated memorandum and articles of association of HCM II (as amended from time to time, the “CaymanConstitutional Documents”); and (3) the other transactions contemplated by the Business Combination Agreement and documents related thereto were consummated (such transactions, together with the Merger and the Domestication, the “Transactions”).
An extraordinary general meeting of HCM II shareholders was held on October 20, 2025 (the “Extraordinary General Meeting”), where the HCM II shareholders considered and approved, among other matters, a proposal to approve the Business Combination Agreement and the Transactions. In connection with the Extraordinary General Meeting, holders of 7,390 HCM II Class A Ordinary Shares (as defined below) exercised their right to redeem their shares for cash at a redemption price of $10.54 per share (the “Redemption Price”), for an aggregate redemption amount of approximately $77,890 (the “Redemption”).
On October 23, 2025, as contemplated by the Business Combination Agreement and described in the section titled “The Domestication Proposal” of the Proxy Statement/Prospectus, HCM II filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation (the “Certificate of Incorporation”) and a certificate of corporate domestication with the Secretary of State of the State of Delaware, pursuant to which HCM II was domesticated and continued as a Delaware corporation.
1
Immediately prior to the Domestication, pursuant to the Cayman Constitutional Documents and the Sponsor Support Agreement dated March 26, 2025, among HCM II and Legacy Terrestrial Energy, each of the then issued and outstanding Class B ordinary shares of HCM II, par value $0.0001 per share (each, a “HCMII Class B Ordinary Share”), converted automatically, on a one-for-one basis, into one (1) Class A ordinary share of HCM II, par value $0.0001 per share (each, a “HCM II Class A Ordinary Share” and together with the HCM II Class B Ordinary Shares, the “HCM II Ordinary Shares) (the “Sponsor Share Conversion”). In connection with the Domestication: (i) each then issued and outstanding HCM II Class A Ordinary Share (that was not redeemed pursuant to the Redemption) converted automatically, on a one-for-one basis, into one (1) share of common stock, par value $0.0001 per share, of New Terrestrial Energy (each a “NewTerrestrial Common Share” and collectively, the “New Terrestrial Common Shares”); (ii) each of the then issued and outstanding warrants representing the right to purchase one HCM II Class A Ordinary Share (each an “HCM II Warrant”) converted automatically into a warrant to acquire one (1) New Terrestrial Common Share (each a “New Terrestrial Warrant”); and (iii) each of the then issued and outstanding HCM II Units (as defined in the Proxy Statement/Prospectus) was cancelled and each holder thereof became entitled to one (1) New Terrestrial Common Share and one-half (1/2) of one New Terrestrial Warrant. No fractional warrants were issued upon such cancellation.
Subject to, and in accordance with the terms and conditions of the Business Combination Agreement, prior to or concurrently with the Effective Time:
| i. | each<br>share of common stock, par value $0.001, of Legacy Terrestrial Energy (the “Terrestrial Common Shares”) that was issued<br>and outstanding immediately prior to the Effective Time (other than the Excluded Shares (as defined below) and any Dissenting Shares<br>(as defined in the Business Combination Agreement) was cancelled and converted into the right to receive a number of New Terrestrial<br>Common Shares equal to the Exchange Ratio of 44.7029, which was calculated in accordance with the Business Combination Agreement (the<br>“Per Share Base Consideration”); |
|---|---|
| ii. | each<br>share of preferred stock, par value $0.001, of Legacy Terrestrial Energy designated as “Series A Preferred Stock” or “Series<br>A-1 Preferred Stock” that was issued and outstanding immediately prior to the Effective Time (other than Excluded Shares and Dissenting<br>Shares) was cancelled and converted into the right to receive a number New Terrestrial Common Shares equal to: (A) the number of Terrestrial<br>Common Shares into which such Terrestrial Series A Preferred Shares were converted in accordance with Legacy Terrestrial Energy’s<br>governing documents as of immediately prior to the Effective Time; multiplied by (B) the Per Share Base Consideration; |
| --- | --- |
| iii. | each<br>Terrestrial Common Share and Terrestrial Series A Preferred Share that, immediately prior to the Effective Time, was owned by HCM II<br>or Merger Sub (or any other subsidiary of HCM II), or held by Legacy Terrestrial Energy (in treasury or otherwise), if any (each, an<br>“Excluded Share”), was automatically cancelled and retired without any conversion thereof and ceased to exist, and<br>no consideration was delivered in exchange therefore; |
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| iv. | each<br>share of preferred stock, par value $0.001 per share, of Legacy Terrestrial Energy previously designated as “Special Voting Preferred<br>Stock” was cancelled and converted into the right to receive one share of preferred stock, par value $0.0001 per share, of New<br>Terrestrial Energy designated as “Special Voting Preferred Stock” pursuant to New Terrestrial Energy’s certificate<br>of incorporation; |
| --- | --- |
| v. | each<br>option to purchase Terrestrial Common Shares (each, a “Terrestrial Option”) that was outstanding and unexercised immediately<br>prior to the Effective Time was automatically assumed by New Terrestrial Energy such that, as of the Effective Time, each share underlying<br>each Terrestrial Option became New Terrestrial Common Shares and the number of such shares were equal to the Exchange Ratio, with such<br>assumption and adjustment completed in a manner intended to satisfy the requirements of Section 409A of the Internal Revenue Code of<br>1986, as amended (the “Code”) and, with respect to any Terrestrial Option that was intended to be an “incentive<br>stock option”, Section 422 of the Code; |
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| vi. | each warrant to purchase<br> Terrestrial Common Shares or other equity interests of Legacy Terrestrial Energy (each, a “Terrestrial Warrant”)<br> that was outstanding and unexercised immediately prior to the Effective Time was automatically assumed by New Terrestrial Energy and<br> became exercisable, in accordance with the terms and conditions of such Terrestrial Warrant, for the Per Share Base<br> Consideration; |
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| vii. | Each<br>eight percent (8%) Convertible Note due 2026 issued by Legacy Terrestrial Energy (“Terrestrial Convertible Note”)<br>that was outstanding immediately prior to the Effective Time was cancelled and automatically converted pursuant to its terms, and the<br>holder thereof became entitled to receive, a number of New Terrestrial Common Shares equal to (A) the outstanding amount of such Terrestrial<br>Convertible Note, including any accrued and unpaid interest, divided by (B) seventy-five percent (75%) of the Redemption Price; and |
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| viii. | Each<br>restricted stock unit (“RSU”) representing the right to receive Terrestrial Common Shares (each, a “TerrestrialRSU”) that was outstanding immediately prior to the Effective Time was automatically assumed by New Terrestrial Energy such<br>that, as of the Effective Time, each share underlying each Terrestrial RSU became New Terrestrial Common Shares and the number of such<br>shares were equal to the Exchange Ratio. |
| --- | --- |
2
A description of the Transactions and the terms of the Business Combination Agreement are included in the Proxy Statement/Prospectus in the section entitled “TheBusiness Combination Proposal” beginning on page 111.
The foregoing description of the Business Combination Agreement and the Transactions does not purport to be complete and is qualified in its entirety by the full text of the Business Combination Agreement and each amendment thereto, which are included as Exhibits 2.1 and 2.2 to this Current Report, respectively, each of which is incorporated by reference herein.
PIPE Investment
As previously announced on March 26, 2025, concurrently with the execution of the Business Combination Agreement, HCM II entered into subscription agreements (the “PIPE Subscription Agreements”) with certain investors (collectively, the “PIPE Investors”) pursuant to which, and on the terms and subject to the conditions of which, the PIPE Investors collectively subscribed for an aggregate of 5,000,000 New Terrestrial Common Shares for a purchase price of ten dollars ($10.00) per share. The PIPE Investors were permitted to satisfy their commitments thereunder with New Terrestrial Common Shares that qualify as Non-Redeemed Shares (as defined in the PIPE Subscription Agreements). Concurrently with the Closing, New Terrestrial Energy received an aggregate amount of $50,000,000 from the PIPE Investors.
The foregoing description of the PIPE Subscription Agreements and the PIPE investment does not purport to be complete and is qualified in its entirety by the full text of the PIPE Subscription Agreements, a form of which is included as Exhibit 10.8 to this Current Report and is incorporated by reference herein.
At the Effective Time, in accordance with the closing of the Transactions, New Terrestrial Energy:
| i. | issued<br>an aggregate of 47,741,728 New Terrestrial Common Shares, to securityholders of Legacy Terrestrial Energy, including holders of Terrestrial<br>Convertible Notes ; |
|---|---|
| ii. | issued<br>an aggregate of 26 Special Voting Preferred Shares; |
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| iii. | assumed<br>Terrestrial Warrants to purchase 10,658,520 New Terrestrial Common Shares; |
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| iv. | assumed<br>Terrestrial Options for comparable options to purchase 17,655,422 New Terrestrial Common Shares; and |
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| v. | assumed<br>Terrestrial RSUs with respect to 1,023,160 New Terrestrial Common Shares. |
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In addition to the foregoing, New Terrestrial Energy will be obligated to issue additional New Terrestrial Common Shares in respect of the contingent value rights to be issued to the former holders of Terrestrial Convertible Notes pursuant to the terms of those notes. The issuance pursuant to the contingent value rights may occur in the event that the volume-weighted average trading price of the New Terrestrial Common Shares for the 20 trading days beginning on the trading day immediately following the earliest expiry date of the lock-up period contemplated by the applicable Key Holder Lock-Up Arrangement (as defined in the Business Combination Agreement) is less than 75% of the Redemption Price.
3
New Terrestrial Common Shares and New Terrestrial Warrants began trading on Nasdaq under the symbols “IMSR” and “IMSRW,” respectively, on October 29, 2025. New Terrestrial Energy has not paid any cash dividends on its shares of common stock to date. It is the present intention of New Terrestrial Energy to retain all earnings, if any, for use in New Terrestrial Energy’s business operations, and, accordingly, it does not anticipate declaring any dividends in the foreseeable future. The payment of cash dividends in the future will be dependent upon New Terrestrial Energy’s revenues and earnings, if any, capital requirements, and general financial conditions. The payment of any cash dividends is within the discretion of the Board of Directors of New Terrestrial Energy (the “Board”). Further, the ability of New Terrestrial to declare dividends may be limited by the terms of financing or other agreements entered into by it or its subsidiaries from time to time.
Item 1.01. Entry into a Material DefinitiveAgreement.
Indemnification Agreements
In connection with the consummation of the Transactions and as contemplated by the Business Combination Agreement, New Terrestrial Energy entered into indemnification agreements with each of its directors and executive officers. Each indemnification agreement provides for indemnification and advancement by New Terrestrial Energy of certain expenses and costs relating to claims, suits, or proceedings arising from service to New Terrestrial Energy or, at its request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.
The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreements, a form of which is included as Exhibit 10.11 to this Current Report and is incorporated by reference herein.
Amended and Restated Registration RightsAgreement
On October 28, 2025, in connection with the consummation of the Transactions and as contemplated by the Business Combination Agreement, New Terrestrial Energy, Cantor and the Sponsor entered into an Amended and Restated registration rights agreement (the “Registration Rights Agreement”). The material terms of the Registration Rights Agreement are described in the Proxy Statement/Prospectus under the section entitled “TheBusiness Combination Proposal-Related Agreements-Registration Rights Agreement.” The foregoing description is qualified in its entirety by the text of the Registration Rights Agreement, which is included as Exhibit 10.3 to this Current Report and is incorporated by reference herein.
Lock-Up Agreements
As previously disclosed on March 26, 2025, in connection with the consummation of the Transactions, the Sponsor and certain key stockholders of HCM II (the “Key Holders”) entered into lock-up agreements (the “Sponsor Lock-Up Agreement” and “Key Holder Lock-Up Agreement,” respectively). Additionally, the holders of Convertible Notes entered into Key Holder Lock-Up Agreements in connection with the conversion of the Convertible Notes.
Pursuant to the Sponsor Lock-Up Agreement, the New Terrestrial Common Shares the Sponsor received upon conversion of its Class A Ordinary Shares in connection with the Domestication and New Terrestrial Warrants received upon conversion of private placement warrants in connection with the Domestication are locked up and may not be transferred, subject to certain customary transfer exceptions, as of the Closing until the date that is the earliest of (a) the twelve (12) month anniversary of the date of the Sponsor Lock-Up Agreement, and (b) following the 180^th^ day following the Closing, (i) with respect to 50% of the such shares and such warrants, the date on which the VWAP (as defined below) equals or exceeds $15.00 per share, and (ii) with respect to 100% of such shares and warrants, the date on which the VWAP equals or exceeds $20.00 per share (the “Lock-Up Period”). “VWAP” means, for the New Terrestrial Common Shares for a period of twenty (20) business days ending on any given determination date, the dollar volume-weighted average price for the New Terrestrial Common Shares on the Nasdaq Capital Market, for such period, as reported by Bloomberg through its “AQR” function (excluding, for the avoidance of doubt, the opening and closing print of each VWAP purchase date), or any successor thereto.
4
Pursuant to the Key Holder Lock-Up Agreement, (a) shares received by the Key Holders as Per Share Base Consideration, and (b) New Terrestrial Common Shares underlying all other securities of HCM II held by the Key Holders immediately following the Closing that are convertible into or exchangeable for, New Terrestrial Common Shares are locked up and may not be transferred by the Key Holder thereof, subject to certain customary transfer exceptions, until the expiration of the Lock-Up Period.
The foregoing descriptions of the Key Holder Lock-Up Agreement and Sponsor Lock-Up Agreement do not purport to be complete and are qualified in their entirety by the terms and conditions of such agreements, the forms of which are filed as Exhibits 10.5 and 10.6 to this Current Report, respectively, each of which is incorporated by reference herein.
Amended and Restated Exchange and SupportAgreement
Concurrently with the Closing, New Terrestrial Energy entered into that certain Second Amended and Restated Exchange and Support Agreement with Terrestrial Energy Canada (Call) Inc. (“CallCo”) and Terrestrial Energy Canada (Exchange) Inc. (the “ExchangeCo”) (the “A&R Exchange Agreement”). The A&R Exchange Agreement contains customary provisions and covenants that are intended to ensure that the equity ownership in ExchangeCo is economically equivalent to equity ownership in New Terrestrial Energy in respect of dividends, distributions, splits, combinations, reclassifications or similar events affecting New Terrestrial Energy. At the option of the shareholder, each Exchangeable Share can be converted into New Terrestrial Common Shares at any time.
The foregoing description of the A&R Exchange Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Second Amended and Restated Exchange and Support Agreement, included as Exhibit 10.7 to this Current Report and is incorporated by reference herein.
Item 2.01. Completion of Acquisition or Dispositionof Assets.
The disclosure set forth in the Introductory Note above is incorporated into Item 2.01 of this Current Report by reference. A more complete summary of the material provisions of the Business Combination Agreement is included in the Proxy Statement/Prospectus titled “The Business CombinationProposal” beginning on page 111, which is incorporated by reference herein.
5
FORM
10 INFORMATION
Item 2.01(f) of Form 8-K provides that if the predecessor registrant was a “shell company” (as such term is defined in Rule 12b-2 under the Exchange Act), as HCM II was immediately before the consummation of the Transactions, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, New Terrestrial Energy is providing the information below that would be included in a Form 10 if it were to file a Form 10. Please note that the information provided below relates to New Terrestrial Energy after the consummation of the Transactions, unless otherwise specifically indicated or the context otherwise requires.
Cautionary Note Regarding Forward-LookingStatements
This Current Report contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including with respect to the effects of the Business Combination Agreement. These statements are based on the beliefs and assumptions of New Terrestrial Energy’s management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. While New Terrestrial Energy believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, New Terrestrial Energy cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements can generally be identified by the use of words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “target,” “will,” “would” and similar expressions, but the absence of these words does not mean that a statement is not forward-looking.
Forward-looking statements in this Current Report and in any document incorporated by reference in the Proxy Statement/Prospectus may include, for example, statements about New Terrestrial Energy and Legacy Terrestrial Energy, including:
| ● | the<br>ability to realize the benefits expected from the Transactions; |
|---|---|
| ● | the<br>ability to maintain the listing of the New Terrestrial Common Shares and the New Terrestrial Warrants on Nasdaq; |
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| ● | the<br>ability to raise financing in the future and to comply with restrictive covenants related to long-term indebtedness; |
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| ● | the<br>future financial performance of New Terrestrial Energy and Legacy Terrestrial Energy; |
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| ● | New<br>Terrestrial Energy’s and Legacy Terrestrial Energy’s ability to retain or recruit, or to effect changes required in, their<br>respective officers, key employees or directors; |
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| ● | New<br>Terrestrial Energy’s and Legacy Terrestrial Energy’s ability to comply with laws and regulations applicable to its business;<br>and |
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| ● | expansion<br>plans and opportunities. |
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These forward-looking statements are based on information available as of the date of this report and New Terrestrial Energy’s management teams’ current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside the control of New Terrestrial Energy and its directors, officers and affiliates. Accordingly, forward-looking statements should not be relied upon as representing New Terrestrial Energy’s management teams’ respective views as of any subsequent date. New Terrestrial Energy does not undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.
You should not place undue reliance on these forward-looking statements. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of our assumptions prove incorrect, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:
| ● | the<br>fact that Legacy Terrestrial Energy has no history in commercial operations which limits the accuracy of any forward-looking forecasts,<br>prospects or business outlook or plans; |
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| ● | that<br>Legacy Terrestrial Energy may not be able to generate positive cashflow from its expected future business operations; |
| --- | --- |
| ● | there<br>may be time delays, unforeseen expenses, increased capital costs, and other complications; |
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6
| ● | inability<br>to convert current commercial discussions and/or memorandums of understanding with customers into definitive contracts; |
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| ● | operating<br>in a highly competitive industry; |
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| ● | inability<br>to obtain sufficient capital or other resources necessary to provide for such production; |
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| ● | any<br>failure by management to manage growth properly could negatively impact our business; |
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| ● | power<br>or other utility disruption or shortage; |
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| ● | increasing<br>costs, including rising electricity and other utility costs, or limited access to raw materials; |
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| ● | any<br>failure to comply with the laws and regulations governing the use, transportation, and disposal of toxic, hazardous and/or radioactive<br>materials; |
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| ● | any<br>inability to meet individual customer specifications; |
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| ● | work<br>stoppages or similar difficulties, breakdown in labor relations, or a shortage of skilled technicians and engineers; |
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| ● | failure<br>to retain key personnel or attract additional qualified personnel; |
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| ● | failure<br>to comply with certain agreements with government entities that have provided us with certain incentives and favorable financing; |
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| ● | impacts<br>of force majeure events; |
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| ● | that<br>Terrestrial Energy has generated negative operating cash flows and may experience negative cash flow from operations in the future; |
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| ● | extensive<br>and costly environmental requirements; |
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| ● | the<br>need to obtain and sustain governmental approvals and permits; |
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| ● | the<br>risk that certain illustrative unit economics are based on assumptions and expectations, including with respect to costs, revenue, and<br>sources of revenue, and gross margins, that prove to be incorrect for any reason; |
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| ● | failure<br>to comply with applicable anti-corruption, anti-bribery, anti-money laundering and similar laws and regulations; |
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| ● | costs<br>of compliance with environmental, health and safety regulations; |
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| ● | the<br>impacts of climate change; |
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| ● | possible<br>litigation risks, including permit disputes (including in respect of access and/or validity of tenure), environmental claims, occupational<br>health and safety claims and employee claims; |
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| ● | any<br>infringement of the intellectual property rights of third parties; |
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| ● | failure<br>to adequately protect intellectual property rights; |
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| ● | issue<br>with information technology systems, including cyber threats, disruption, damage and failure; |
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| ● | use<br>of resources and management attention related to the requirements of being a public company in the United States; |
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| ● | risks<br>relating to the negative public or potential perception of Terrestrial Energy or the nuclear energy industry in general; |
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| ● | changes<br>to United States trade policies, including new tariffs or the renegotiation or termination of existing trade agreements or treaties;<br>and |
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| ● | substantial<br>governmental support for competing technologies or their fuel supply may reduce our competitive advantage. |
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7
Business
New Terrestrial Energy’s business is described in the Proxy Statement/Prospectus in the section titled “Information About Terrestrial Energy,” which is incorporated by reference herein.
On September 30, 2025, the U.S. Department of Energy announced that New Terrestrial Energy was one of four companies selected for the DOE Office of Nuclear Energy Fuel Line Pilot Program. The program is designed to ensure a robust supply of nuclear fuel is available for research, development, and demonstration purposes, including the IMSR, which was previously selected for the DOE’s advanced Reactor Pilot Program. The program is intended to reduce U.S. dependence on foreign sources of enriched uranium and is expected to expand access to the advanced fuel required to test the design and accelerate deployment for New Terrestrial Energy and the other participants in the DOE advanced Reactor Pilot Program.
Risk Factors
The risks associated with New Terrestrial Energy’s business are described in the Proxy Statement/Prospectus in the section titled “Risk Factors,” which is incorporated by reference herein.
Financial Information
Historical Audited Financial Statements
The historical audited financial statements of Legacy Terrestrial Energy as of and for the year ended December 31, 2024 and December 31, 2023 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-64 and are incorporated by reference herein.
Unaudited Condensed Financial Statements
The unaudited consolidated financial statements of Legacy Terrestrial Energy as of and for the six months ended June 30, 2025 and 2024 have been prepared in accordance with U.S. generally accepted accounting principles and pursuant to the regulations of the SEC and are included in the Proxy Statement/Prospectus beginning on page F-47, which are incorporated by reference herein.
Unaudited Pro Forma Condensed CombinedFinancial Information
The unaudited pro forma condensed combined financial information of New Terrestrial Energy as of and for the six months ended June 30, 2025 and the year ended December 31, 2024 is included in the Proxy Statement/Prospectus beginning on page 209, and incorporated by reference herein.
Management’s Discussion and Analysisof Financial Condition and Results of Operations
Management’s discussion and analysis of financial condition and results of operations of Legacy Terrestrial Energy prior to the consummation of the Transactions is described in the Proxy Statement/Prospectus in the section entitled “Management’s Discussion and Analysis of FinancialCondition and Results of Operations of Terrestrial Energy” beginning on page 275 of the Proxy Statement/Prospectus, which is incorporated by reference herein.
Quantitative and Qualitative Disclosuresabout Market Risk
Reference is made to the disclosure in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of TerrestrialEnergy – Quantitative and Qualitative Disclosures About Market Risk” on pages 285-286 of the Proxy Statement/Prospectus, which is incorporated by reference herein.
Properties
Reference is made to the disclosure contained in the Proxy Statement/Prospectus in the section titled “Information About Terrestrial Energy – Facilities,” which is incorporated by reference herein.
8
Security Ownership of Certain BeneficialOwners and Management
The following table sets forth information available to us at regarding beneficial ownership of New Terrestrial Energy Common Shares following the consummation of the Transactions by:
| ● | each<br>person who was named an executive officer or director of New Terrestrial Energy and all executive officers and directors of New Terrestrial<br>Energy as a group; and |
|---|---|
| ● | each<br>person who is a beneficial owner of more than 5% of a class of New Terrestrial Energy equity securities. |
| --- | --- |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if such person possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days of the measurement date.
The information below is based on an aggregate of 105,782,441 New Terrestrial Common Shares issued and outstanding as of the consummation of the Transactions (inclusive of all shares of Common Stock issuable upon exchange of the Exchangeable Shares). Unless otherwise indicated, we believe that all persons named in the table have shared or sole voting and investment power with respect to all ordinary shares beneficially owned by them and the business address of each of the following entities or individuals is 2730 W. Tyvola Road, Suite 100, Charlotte, NC 28217. The beneficial ownership information below: (i) reflects the automatic conversion of the Terrestrial Convertible Notes without the need to issue any additional shares in respect of the contingent value rights; (ii) assumes that all Exchangeable Shares have been exchanged for New Terrestrial Common Shares; and (iii) reflects record or beneficial ownership of the New Terrestrial Warrants, and New Terrestrial Options only to the extent that they are exercisable within 60 days of October 28, 2025.
| Directors and Executive Officers of New Terrestrial Energy | Number of<br> shares of<br> New<br> Terrestrial<br> Common<br> Shares | Total<br> Voting % | |||
|---|---|---|---|---|---|
| Simon Irish^(1)^ | 10,572,054 | 9.5 | % | ||
| Brian Thrasher | - | * | |||
| David LeBlanc^(2)^ | 11,400,409 | 9.7 | % | ||
| William Smith^(3)^ | 1,543,771 | 1.4 | % | ||
| Frederick Buckman^(4)^ | 267,466 | * | |||
| Hugh MacDiarmid^(5)^ | 2,140,844 | 2.0 | % | ||
| David Hill^(6)^ | 633,136 | * | |||
| William Johnson^(7)^ | 89,406 | * | |||
| Charles Pardee^(8)^ | 297,328 | * | |||
| Shawn Matthews^(9)^ | 12,271,632 | 11.0 | % | ||
| Robert W. Jones | 7,466 | * | |||
| Steven M. Millsap | - | * | |||
| All officers and directors as a group (12 individuals) | 39,223,512 | 37.1 | % | ||
| Five Percent Holders | |||||
| Roberto M. Sella and Francine F. Sella ^(10)^ | 15,378,688 | 14.3 | % | ||
| * | Less than one percent | ||||
| --- | --- | ||||
| (1) | Includes (i) 2,295,934 New Terrestrial Common Shares held directly by Mr. Irish, 2,818,520 New Terrestrial Common Shares held indirectly by SWH Capital LLC (“SWH”) and 52,255 New Terrestrial Common Shares held indirectly by SWH Capital LLC Defined Benefit Plan (“SWH Benefit”); (ii) 5,271,236 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Options; (iii) 44,703 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants; and (iv) 89,406 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants that are held by SWH Benefit. Mr. Irish maintains sole voting and investment power over the securities held by SWH and SWH Benefit and thus may be deemed to beneficially own such securities. Mr. Irish and Mr. LeBlanc are also parties to a voting agreement that provides that to the extent Mr. LeBlanc would otherwise be entitled to cast more votes on any matter submitted to New Terrestrial Energy stockholders than Mr. Irish, Mr. LeBlanc has granted Mr. Irish the power to direct the voting of such excess shares. Giving effect to such arrangement, Mr. Irish would have sole voting power with respect to an additional 3,014,391 shares beneficially owned by Mr. LeBlanc. | ||||
| --- | --- |
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| (2) | Includes (i) 5,981 New Terrestrial Common Shares held directly by Mr. LeBlanc and 11,175,778 New Terrestrial Common Shares issuable upon the exchange of Exchangeable Shares; (ii) 145,464 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Options; (iii) 17,882 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants; (iv) 13,731 New Terrestrial Common Shares held by M. Denis-LeBlanc Medecine Societe Professionelle (the “LeBlanc Entity”) and (v) 41,574 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants that are held by the LeBlanc Entity. The LeBlanc Entity is an entity wholly owned by Mr. LeBlanc’s wife, and, as such, Mr. LeBlanc may be deemed to beneficially own such shares. |
|---|---|
| (3) | Includes 1,543,771 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Options. |
| --- | --- |
| (4) | Includes (i) 6,669 New Terrestrial Common Shares held directly by Mr. Buckman; (ii) 178,812 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Options; (iii) 22,352 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants; and (iv) 14,930 New Terrestrial Common Shares held by the Frederick and Marion Buckman Family Trust dated July 25, 2014 (the “Buckman Trust”) and (v) 44,703 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants that are held by the Buckman Trust. Mr. Buckman maintains sole voting and investment power over the securities held by the Buckman Trust and thus may be deemed to beneficially own such securities. |
| --- | --- |
| (5) | Includes (i) 25,946 New Terrestrial Common Shares and 558,787 New Terrestrial Common Shares issuable upon the exchange of Exchangeable Shares held directly by Mr. MacDiarmid; (ii) 1,343,771 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Options; (iii) 78,231 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants; (iv) 134,109 New Terrestrial Common Shares held by Visex Management Corporation (“Visex”); and 134,109 New Terrestrial Common Shares issuable upon the exchange of Exchangeable Shares held directly by Visex. Mr. MacDiarmid maintains sole voting and investment power over the shares held by Visex and thus may be deemed to beneficially own such shares. |
| --- | --- |
| (6) | Includes (i) 18,470 New Terrestrial Common Shares held directly by Mr. Hill; (ii) 558,787 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Options; and (iii) 55,879 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants. |
| --- | --- |
| (7) | Includes 89,406 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Options. |
| --- | --- |
| (8) | Includes (i) 6,758 New Terrestrial Common Shares held directly by Mr.<br>Pardee; (ii) 268,218 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Options; and (iii) 22,352 New Terrestrial<br>Common Shares issuable upon the exercise of Terrestrial Warrants. |
| --- | --- |
| (9) | Includes (i) 533,514 New Terrestrial Common Shares held directly by Mr. Matthews; (ii) 1,788,118 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants; (iii) 5,675,000 New Terrestrial Common Shares held by HCM Investor Holdings II, LLC (“Sponsor”); and 4,275,000 New Terrestrial Common Shares issuable upon the exercise of Private Placement Warrants held by Sponsor . Mr. Matthews is the sole managing member of the Sponsor and holds voting and investment power with respect to shares held of record by the Sponsor. As such, Mr. Matthews may be deemed to beneficially own all of the shares held by Sponsor. Mr. Matthews disclaims any beneficial ownership of the securities held by the Sponsor other than to the extent of any pecuniary interest he may have therein, directly or indirectly. Mr. Matthews has an economic interest in 2,950,000, or approximately 51.3%, of the New Terrestrial Common Shares held by the Sponsor. Further, Mr. Matthews has an economic interest in 775,000, or approximately 18.1%, of the Private Placement Warrants held by the Sponsor. |
| --- | --- |
| (10) | Includes (i) 180,316 New Terrestrial Common Shares held directly by Roberto M. Sella (“Mr. Sella); (ii) 539,118 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants by Mr. Sella; (iii) 12,244,088 New Terrestrial Common Shares held jointly by Roberto M. Sella and Francine M. Sella (iv) 223,515 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants by Roberto M. Sella and Francine M. Sella; (v) 807,873 New Terrestrial Common Shares held by the Roberto M. Sella 2012 Family Trust (the “Sella Trust”); (vi) 730,446 New Terrestrial Common Shares issuable upon the exercise of Terrestrial Warrants by the Sella Trust; and (vii) 65,334 New Terrestrial Common Shares held by LL Charitable Foundation. The address of Mr. and Mrs. Sella and the Sella Trust address is 2400 Market Street, Philadelphia, PA 19103. |
| --- | --- |
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Directors and Executive Officers
On October 20, 2025, Simon Irish, David LeBlanc, Frederick Buckman, Hugh MacDiarmid, David Hill, William Johnson, Charles Pardee, Shawn Matthews and Robert W. Jones were elected to serve as initial directors of Board, and divided into three (3) classes, with each class serving staggered three-year terms and until any such director’s successor is duly elected and qualified, subject to such director’s earlier death, disqualification, resignation, or removal.
Effective as of the Effective Time, the Board appointed Simon Irish as Chief Executive Officer, David LeBlanc as Chief Technology Officer, Brian Thrasher as Chief Financial Officer and Steven Millsap as Chief Compliance Officer, General Counsel and Secretary.
Additional information with respect to New Terrestrial Energy’s directors and executive officers following the Closing of the Transactions is set forth in the Proxy Statement/Prospectus in the section entitled “Managementof New Terrestrial Energy Following the Business Combination” beginning on page 312, and that information is incorporated by reference herein.
Director Independence
The Board undertook a review of the independence of each director and considered whether each director of the Company has a material relationship with the Company that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, the Board determined that each of Frederick Buckman, Shawn Matthews, Hugh MacDiarmid, David Hill, William Johnson, Charles Pardee and Robert W. Jones was considered an “independent director” as defined under the Nasdaq listing requirements and rules and the applicable rules of the Exchange Act.
Additional information with respect to the independence of the directors of the Company following the Closing of the Transactions is set forth in the Proxy Statement/Prospectus in the section entitled “Management of New Terrestrial Energy Following the Business Combination —Director Independence” beginning on page 316, and that information is incorporated by reference herein.
Executive & Director Compensation
The executive and director compensation of New Terrestrial Energy’s named executive officers is described in the Proxy Statement/Prospectus in the section titled “Executive and Director Compensation of Terrestrial Energy” and that information is incorporated by reference herein.
Reference is made to the disclosure set forth below in Item 5.02 of this Current Report, which is incorporated by reference herein.
CEO Transaction Bonus
As of October 21, 2025 (the “Grant Date”), Legacy Terrestrial Energy and Mr. Irish entered into a Restricted Stock Unit Agreement (“RSUAgreement”), pursuant to which Mr. Irish was awarded 22,888 RSUs in Legacy Terrestrial Energy. The RSU Agreement was entered into to recognize the efforts of Mr. Irish in furtherance of completion of the Transactions and to incentivize Mr. Irish to remain employed beyond the Closing. Pursuant to the RSU Agreement, 50% of the RSUs will vest on the 12-month anniversary of the Grant Date, and the remaining 50% of the RSUs will vest on the 24-month anniversary of the Grant Date, subject to Mr. Irish’s continued employment through each vesting date; provided that, if Mr. Irish is terminated without “cause” or due to Mr. Irish’s death or disability (each a “Qualifying Termination”), all unvested RSUs will immediately accelerate and become vested as of the date of such Qualifying Termination. In the event that Mr. Irish is terminated as a result of an event that is not a Qualifying Termination, all unvested RSUs held by Mr. Irish pursuant to the RSU Agreement will be automatically forfeited. Vested RSUs will be settled in New Terrestrial Common Shares on or before the 10^th^ business day following the applicable vesting date.
In the event of a “change in control” after the completion of the Transactions, the Board may unilaterally take one or more of the following actions with respect to the RSUs: (i) arrange for the surviving corporation or acquiring corporation to assume or continue the RSU Agreement or substitute a similar stock award; (ii) accelerate the vesting, in whole or in part, of the RSU Agreement; or (iii) cancel or arrange for the cancellation of the RSU Agreement.
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For purposes of the RSU Agreement, “cause” has the same definition as in the Irish Employment Agreement. Further, for purposes of the RSU Agreement, “change in control” means (i) any “person” becomes the “beneficial owner” (as defined in Rule 13d-3 of the Securities Exchange Act of 1934), directly or indirectly, of securities of the New Terrestrial Energy representing more than 50% of the total combined voting power represented by New Terrestrial Energy’s then-outstanding voting securities; (ii) the consummation of a sale or disposition of all or substantially all of the assets of New Terrestrial Energy, other than the sale or disposition of all or substantially all of the assets of New Terrestrial Energy to a person or persons who beneficially own, directly or indirectly, more than 50% of the total combined voting power represented by New Terrestrial Energy’s then-outstanding voting securities; (iii) the consummation of a merger, reorganization, share exchange, or consolidation of New Terrestrial Energy with or into any other entity, other than a merger, reorganization, share exchange, or consolidation which would result in the voting securities of New Terrestrial Energy’s outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) more than 50% of the total voting power represented by the voting securities of New Terrestrial Energy or such surviving entity or its parent outstanding immediately after such merger, reorganization, share exchange, or consolidation; (iv) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election. A transaction shall not constitute a change in control if its sole purpose is to change the state of New Terrestrial Energy’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held New Terrestrial Energy’s securities immediately before such transaction.
Committees of the Board of Directors
Effective as of immediately prior to the Closing, the standing committees of the Board consist of an audit committee (the “Audit Committee”), a compensation committee (the “Compensation Committee”) and a nominating and corporate governance committee (the “NominatingCommittee”).
Effective as of immediately following the Closing, the Board appointed Robert W. Jones, William Johnson, and Hugh MacDiarmid to serve on the Audit Committee, with Robert W. Jones serving as chair. The Board appointed Hugh MacDiarmid, Charles Pardee, and Shawn Matthews to serve on the Compensation Committee, with Hugh MacDiarmid serving as chair. The Board appointed Charles Pardee, William Johnson and Robert W. Jones to serve on the Nominating Committee, with William Johnson serving as chair.
Additional information with respect to the composition of the committees of the Board immediately after the Closing of the Transactions is set forth in the Proxy Statement/Prospectus in the section entitled “Management of New Terrestrial Energy Following the Business Combination — Committees of the New Terrestrial Board” beginning on page 316, and that information is incorporated by reference herein.
Certain Relationships and Related PartyTransactions
Certain relationships and related party transactions of New Terrestrial Energy and Legacy Terrestrial Energy are described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Party Transactions” and that information is incorporated by reference herein.
Immediately prior to the Closing, Working Capital Loans in the amount of $1,267,599 made to HCM II by the Sponsor or its affiliates converted into 1,267,599 New Terrestrial Warrants, at the price of $1.00 per warrant.
Legal Proceedings
Reference is made to the disclosure regarding legal proceedings in the section of the Proxy Statement/Prospectus titled “Information About Terrestrial Energy-LegalProceedings,” which is incorporated by reference herein.
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Market Price of and Dividends on the Registrant’sCommon Equity and Related Stockholder Matters
New Terrestrial Common Shares and New Terrestrial Warrants began trading on Nasdaq under the symbols “IMSR” and “IMSRW,” respectively, on October 29, 2025. New Terrestrial Energy has not paid any cash dividends on its shares of common stock to date. It is the present intention of the Board to retain all earnings, if any, for use in New Terrestrial Energy business operations and, accordingly, the Board does not anticipate declaring any dividends in the foreseeable future. The payment of cash dividends in the future will be dependent upon New Terrestrial Energy’s revenues and earnings, if any, capital requirements, and general financial condition. The payment of any cash dividends is within the discretion of the Board. Further, the ability of New Terrestrial Energy to declare dividends may be limited by the terms of financing or other agreements entered into by it or its subsidiaries from time to time.
As of October 28, 2025, following the completion of the Transactions, there were 81,771,423 New Terrestrial Common Shares (excluding 24,011,029 Exchangeable Shares), 29,008,520 New Terrestrial Warrants, and 26 New Terrestrial Special Voting Preferred Stock outstanding. New Terrestrial has reserved a total of 15,473,715 New Terrestrial Common Shares for issuance pursuant to the Equity Incentive Plan, subject to certain adjustments set forth therein.
New Terrestrial Energy securities are described in the Proxy Statement/Prospectus in the sections titled “Description of New Terrestrial Energy’s Securities” and “Market Price and Dividends of Securities” and such information is incorporated by reference herein.
Recent Sales of Unregistered Securities
The information set forth under Item 3.02 of this Current Report is incorporated by reference herein.
Description of Registrant’s Securitiesto Be Registered
The description of New Terrestrial Energy’s securities is contained in the Proxy Statement/Prospectus in the section titled “Description of New TerrestrialEnergy’s Securities.”
The information set forth under Item 1.01 of this Current Report is incorporated by reference herein.
Indemnification of Directors and Officers
The information set forth under Item 1.01 of this Current Report under the heading “Indemnification Agreements” is incorporated by reference herein.
Further information about the indemnification of New Terrestrial Energy’s directors and officers is set forth in the Proxy Statement/Prospectus in the section titled “Description of New Terrestrial Energy’s Securities— Limitations on Liability and Indemnification of Officersand Directors” beginning on page 294, which is incorporated by reference herein.
Financial Statements and Supplementary Data
The information set forth under Item 9.01 of this Current Report is incorporated by reference herein.
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Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in the Introductory Note and Item 2.01 is incorporated into this Item 3.02 by reference. The Company issued certain securities described in the Introductory Note under Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving a public offering and/or exempt exchanges under Section 3(a)(9) under the Securities Act.
Item 3.03. Material Modification to Rightsof Security Holders.
On October 23, 2025, in connection with the Domestication, HCM II filed the Certificate of Incorporation with the Secretary of State of the State of Delaware. The material terms of the Certificate of Incorporation and HCM II’s bylaws (as amended from time to time, the “Bylaws”) and the general effect upon the rights of holders of HCM II’s capital stock are discussed in the Proxy Statement/Prospectus in the sections titled “The Domestication Proposal” and “The Organizational Documents Proposal,” which are incorporated by reference herein.
Upon the Closing, the Bylaws were amended to rename the company “Terrestrial Energy Inc.”
Item 5.01. Changes in Control of Registrant.
The information set forth above under the Introductory Note and Item 2.01 of this Current Report is incorporated by reference herein.
Item 5.02. Departure of Directors or CertainOfficers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Executive Officers and Directors
The information set forth in sections titled “Directors and Executive Officers” and “Certain Relationships and Related Transactions” in Item 2.01 of this Current Report is incorporated by reference herein.
Terrestrial Energy Inc. 2025 Equity IncentivePlan
As previously disclosed, at the Extraordinary General Meeting, the HCM II shareholders considered and approved the Terrestrial Energy Inc. 2025 Equity Incentive Plan (the “Equity Incentive Plan”), which became effective immediately upon the Closing. A description of the Equity Incentive Plan is included in the Proxy Statement/Prospectus in the sections entitled “The Incentive Plan Proposal” on page 174 thereof, which is incorporated by reference herein.
New Terrestrial Energy has reserved a total of 15,473,715 New Terrestrial Energy Common Shares for issuance pursuant to the Equity Incentive Plan, and the maximum number of shares that may be issued pursuant to the exercise of incentive stock options granted under the Equity Incentive Plan is 15,473,715 New Terrestrial Energy Common Shares, in each case, subject to certain adjustments set forth in the Equity Incentive Plan.
The foregoing description of the Equity Incentive Plan and the information incorporated by reference does not purport to be complete and is qualified in its entirety by the terms and conditions of the Equity Incentive Plan and applicable forms of equity award agreement, which is incorporated by reference to this Current Report as Exhibit 10.9.
CEO Employment Agreement
New Terrestrial Energy and Simon Irish entered into an employment agreement, effective as of the Closing, pursuant to which Mr. Irish is employed as the Chief Executive Officer of New Terrestrial Energy (the “Irish Employment Agreement”). Mr. Irish is entitled to certain compensation and benefits pursuant to the agreement, including (i) an annual base salary of $500,000, (ii) in each fiscal year of New Terrestrial Energy during the term of the Irish Employment Agreement, eligibility for an annual bonus based on the achievement of performance targets established by the New Terrestrial Energy Board, with a target opportunity of 60% of base salary (the “Annual Bonus”), and (iii) reimbursement of reasonable expenses for Mr. Irish’s travel to New Terrestrial Energy’s office in Charlotte, North Carolina in accordance with New Terrestrial Energy’s and, in the event Mr. Irish relocates to the Charlotte, North Carolina, area, reimbursement of reasonable relocation expenses, in each case subject to New Terrestrial Energy’s travel and relocation policies and procedures. In addition, while the Chief Executive Officer, Mr. Irish will be nominated for the New Terrestrial Energy Board.
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If Mr. Irish’s employment is terminated by New Terrestrial Energy without “cause,” then, in addition to certain accrued amounts, he is entitled to the following severance, subject to his execution of a release of all claims against New Terrestrial Energy and related persons and continued compliance with certain restrictive covenants: (i) continued payment of his base salary for (a) 12 months following his termination if such termination is not in relation to a “change of control” (as defined in the Irish Employment Agreement) or (b) 24 months following his termination if such termination occurs in the 3 months preceding or the 12 months following a “change of control,” (with each of the 12-month or 24-month periods, as applicable, the “Severance Period”); (ii) payment of an amount equal to the full target Annual Bonus for the year in which the termination occurs; (iii) accelerated vesting of any time-based vesting equity awards that are scheduled to vest in the 12-month period following the termination; and (iv) reimbursement of the monthly premium for coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) until the earliest to occur of the end of the Severance Period, the date on which Mr. Irish is no longer eligible for COBRA coverage, or the date on which Mr. Irish becomes eligible to participate in another group health plan. The Irish Employment Agreement contains restrictive covenants, including non-competition and non-solicitation covenants effective for 12 months following termination of employment.
For purposes of the Irish Employment Agreement, “cause” generally means, subject to certain notice and cure rights: (i) conviction of, or plea of guilty or no-contest to, a felony crime involving dishonesty or moral turpitude (meaning a crime that includes the commission of an act of depravity or poor morals); (ii) material violation of law, or act of fraud or material dishonesty, in connection with Mr. Irish’s employment; (iii) refusal or intentional failure to comply with any material lawful written directive of the Board of New Terrestrial Energy; (iv) material breach of Mr. Irish’s fiduciary duty or duty of loyalty to New Terrestrial Energy; (v) material breach of the Irish Employment Agreement; or (vi) material violation of any New Terrestrial Energy policy.
RSU Grant to Mr. Irish
As of October 28, 2025, the Compensation Committee approved a grant of 166,298 RSUs to Mr. Irish under the Equity Incentive Plan. The RSUs will vest in one-third increments on each of the first, second and third anniversaries of the grant date, subject to Mr. Irish’s continued employment through each applicable vesting date and accelerated vesting in certain events.
Item 5.03. Amendments to Articles of Incorporationor Bylaws; Change in Fiscal Year.
The disclosure set forth in Item 3.03 of this Current Report is incorporated in this Item 5.03 by reference.
Copies of the Certificate of Incorporation, Bylaws and Certificate of Designations are attached as Exhibits 3.1, 3.2 and 3.3 to this Current Report, respectively, each of which is incorporated by reference herein.
Item 5.05 Amendments to the Registrant’sCode of Ethics, or Waiver of a Provision of the Code of Ethics.
Effective upon the Effective Time of the Merger, in connection with the consummation of the Transactions, the Board adopted a new Code of Business Conduct and Ethics, which is applicable to all employees, officers and directors of the Company, which is available on the Company’s website at https://www.terrestrialenergy.com. The information on the Company’s website does not constitute part of this Current Report and is not incorporated by reference herein.
Item 5.06. Change in Shell Company Status.
As a result of the Transactions, HCM II ceased being a shell company upon the completion of the Merger. Reference is made to the disclosure in the Proxy Statement/Prospectus in the sections titled “The Business Combination Proposal” and “The Domestication Proposal,” which is incorporated by reference herein. Further, the information set forth in the Introductory Note and under Item 2.01 of this Current Report is incorporated by reference herein.
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Item 9.01. Financial Statements and Exhibits.
| (a) | Financial statements of businesses acquired. |
|---|
The historical audited financial statements of Legacy Terrestrial Energy as of and for the years ended December 31, 2024 and 2023 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-64 and are incorporated by reference herein.
The unaudited condensed financial statements of Legacy Terrestrial Energy as of and for the six months ended June 30, 2025 and 2024 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-47 and are incorporated by reference herein.
| (b) | Pro forma financial information. |
|---|
The unaudited pro forma condensed combined financial information of New Terrestrial Energy as of and for the six months ended June 30, 2025 and for the year ended December 31, 2024 is included in the Proxy Statement/Prospectus beginning on page 209 and is incorporated by reference herein.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 3, 2025 | TERRESTRIAL ENERGY INC. | |
|---|---|---|
| By: | /s/ Brian Thrasher | |
| Name: | Brian Thrasher | |
| Title: | Chief Financial Officer |
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Exhibit 2.2
FIRST AMENDMENT TO BUSINESS COMBINATION AGREEMENT
THIS FIRST AMENDMENT (this “Amendment”) to the Business Combination Agreement, dated March 26, 2025 (the “Agreement”), by and among (a) HCM II Acquisition Corp., a Delaware corporation (the “Purchaser”), (b) HCM II Merger Sub Inc., a Delaware corporation and direct wholly owned subsidiary of the Purchaser, and (c) Terrestrial Energy Inc., a Delaware corporation (the “Company”), is entered into by the Purchaser and the Company effective as of October 26, 2025 (the “Effective Date”). Unless otherwise defined herein, capitalized terms used herein have the meanings ascribed thereto in the Agreement.
RECITALS
WHEREAS, pursuant to Section 9.10 of the Agreement, the Agreement may only be amended by a written instrument signed by the Purchaser and the Company; and
WHEREAS, the Purchaser and the Company desire to amend the Agreement pursuant to the terms and subject to the conditions of this Amendment.
NOW, THEREFORE, in consideration of the recitals set forth above, the covenants and the agreements of the Purchaser and the Company set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Purchaser and the Company agree as follows:
1. Section 2.02(b)(i) – Excluded Shares. Section 2.02(b)(i) of the Agreement is hereby amended and restated in its entirety as follows:
“(i) each Company Common Share, Company Series A Preferred Share and Company Series A-1 Preferred Share that, immediately prior to the Effective Time, is owned by the Purchaser or Merger Sub (or any other subsidiary of the Purchaser), or held by the Company (in treasury or otherwise), if any (each, an “Excluded Share”), shall be automatically cancelled and retired without any conversion thereof and shall cease to exist, and no consideration shall be delivered in exchange therefor;”
2. Section 2.02 – Conversion of Preferred Stock. Section 2.02 of the Agreement is hereby amended to add a new Section 2.02(e) as follows:
“(e) Effect on Series A-1 Preferred Stock. Immediately prior to the Effective Time, without any action on the part of the Purchaser, Merger Sub, the Company or any holder of securities of any of the foregoing, each Company Series A-1 Preferred Share that is issued and outstanding immediately prior to the Effective Time (other than Excluded Shares and any Dissenting Shares) shall, in accordance with the Company Certificate of Incorporation, be cancelled and converted into a number of Company Common Shares calculated in accordance with the Company Certificate of Incorporation. Such Company Common Shares shall then be cancelled and converted into the right to receive the Per Share Base Consideration pursuant to Section 2.02(b)(iv).”
3. Section 2.03(b) – Stock Exchange Procedures. Section 2.03(b) of the Agreement is hereby amended and restated in its entirety as follows:
(b) Stock Exchange Procedures. The Company shall deliver or cause to be delivered to each holder of Company Securities and, if the ExchangeCo Shareholder Approval is not obtained, each holder of Exchangeable Shares, a letter of transmittal and instructions for exchanging each such holder’s Company Common Shares, Company Series A Preferred Shares or Company Series A-1 Preferred Shares (for the avoidance of doubt, including, if the ExchangeCo Shareholder Approval is not obtained, the Company Common Shares and/or the Company Series A Preferred Shares to be issued to such holder in connection with the Exchange), as applicable, for such holder’s applicable portion of the Per Share Base Consideration from the Exchange Fund, and which shall be in a form determined by the Company (a “Letter of Transmittal”). Promptly following receipt of a properly completed and executed Letter of Transmittal, and if received prior to the Closing, within two (2) Business Days following the Closing, Purchaser shall cause to be delivered the applicable portion of the Per Share Base Consideration to each such holder. Effective as of one (1) Business Day prior to the Company Stockholder Meeting, the Company will not record or recognize any transfers of Company Securities on the record books of the Company, other than (i) transfers necessary to effectuate the Exchange, if applicable, and (ii) transfers as to which the Company has been notified of, in writing, prior to one (1) Business Day prior to the Company Stockholder Meeting.
4. Section 2.03(c) – Note Exchange Procedures. Section 2.3(c) of the Agreement is hereby amended and restated in its entirety as follows:
(c) Note Exchange Procedures. The Company shall deliver or cause to be delivered to each holder of Company Convertible Notes a notice and letter of instruction (a “Letter of Instruction”) notifying each such holder of (i) the deemed cancellation and conversion at the Effective Time of any Company Convertible Note outstanding immediately prior to the Effective Time, (ii) the right of the holder of any such Company Convertible Notes to receive such holder’s applicable portion of the Company Convertible Note Share Consideration, subject to the delivery of a properly completed and executed Letter of Instruction and the lock-up agreement contemplated by such Company Convertible Note and (iii) such holder’s contingent right to receive additional Domesticated Purchaser Common Stock pursuant to the Company Convertible Note and the Company Convertible Note CVR. Promptly following receipt of a properly completed and executed Letter of Instruction from a holder of Company Convertible Notes, and if received prior to Closing, within two (2) Business Days following the Closing, Purchaser shall cause to be delivered the applicable portion of the Company Convertible Note Share Consideration to such holder.
5. Section 2.04 – Dissenting Shares. Section 2.04 of the Agreement is hereby amended such that all references to “Company Series A Preferred Shares” shall also be deemed to include Company Series A-1 Preferred Shares.
6. Section 2.07 – Lost or Destroyed Certificates. Section 2.07 of the Agreement is hereby amended such that the reference to “Company Series A Preferred Shares” shall also be deemed to include Company Series A-1 Preferred Shares.
2
Section 6.26(b) – Company Stockholder Approval. Section 6.26 of the Agreement is hereby amended such that the reference to “Company Series A Preferred Shares” shall also be deemed to include Company Series A-1 Preferred Shares.
8. Section 10.01 – Definition of “Certificate”. The definition of “Certificate” set forth in Section 10.01 the Agreement is hereby amended such that the reference to “Company Series A Preferred Shares” shall also be deemed to include Company Series A-1 Preferred Shares.
9. Section 10.01 – Definition of “Company Fully Diluted Capital”. The definition of “Company Fully Diluted Capital” set forth in Section 10.01 of the Agreement is hereby amended and restated in its entirety as follows:
““Company Fully Diluted Capital” means the sum (without duplication) of the aggregate number of (a) Company Common Shares that are issued and outstanding immediately prior to the Effective Time assuming and after giving effect to the exercise in full of the Company Call Options with the consideration for such exercise paid in Company Common Shares, (b) all Company Common Shares issuable upon full exercise of all issued Company Warrants outstanding as of immediately prior to the Effective Time (calculated using the treasury method of accounting on a cashless exercise basis), (c) all Company Common Shares issuable upon full conversion of all Company Series A Preferred Shares and Company Series A-1 Preferred Shares issued and outstanding as of immediately prior to the Effective Time (calculated using the treasury method of accounting on a cashless exercise basis), (d) Company Common Shares issuable upon exchange of all Exchangeable Shares issued and outstanding as of immediately prior to the Effective Time (including all Company Common Shares issuable upon exchange of all such Exchangeable Shares that are exchangeable for Company Series A Preferred Shares, and the subsequent conversion of all such Company Series A Preferred Shares into Company Common Shares) (calculated using the treasury method of accounting on a cashless exercise basis), and (e) all Company Common Shares issuable upon full exercise (calculated using the treasury method of accounting on a cashless exercise basis) or settlement of all Company Options outstanding as of immediately prior to the Effective Time.”
10. Section 10.01 – Definition of “Company Options”. The definition of “Company Options” set forth in Section 10.01 of the Agreement is hereby amended and restated in its entirety as follows:
““Company Options” means, collectively, options to purchase Company Common Shares, including options granted pursuant to the Company Incentive Plan, and any restricted stock units with respect to Company Common Shares.”
3
Section 10.01 – Definition of “Company Securities”. The definition of “Company Securities” set forth in Section 10.01 of the Agreement is hereby amended and restated in its entirety as follows:
““Company Securities” means, collectively, the Company Common Shares, the Company Series A Preferred Shares, the Company Series A-1 Preferred Shares, the Company Special Voting Preferred Shares, the Company Warrants, the Company Convertible Notes and all other shares, warrants and other securities of the Company, including for the avoidance of doubt, any shares, warrants or other securities issued in connection with the Interim Financing.”
12. Section 10.01 – Definition of “Company Series A-1 Preferred Share”. Section 10.01 of the Agreement is hereby amended to add a new defined term to read as follows:
““Company Series A-1 Preferred Share” means preferred stock, par value $0.001 per share, of the Company designated as “Series A-1 Preferred Stock” pursuant to the Company Certificate of Incorporation.”
13. Section 10.01 – Definition of “Company Stockholders”. The definition of “Company Stockholders” set forth in Section 10.01 the Agreement is hereby amended such that the reference to “Company Series A Preferred Shares” shall also be deemed to include Company Series A-1 Preferred Shares.
14. Entire Agreement. The parties hereto acknowledge and agree that this Amendment shall be included in the instruments referenced in Section 9.11 of the Agreement and shall be deemed part of the entire agreement of the parties relating to the subject matter of the Agreement.
15. Miscellaneous. The terms and provisions of Sections 9.02 through 9.07 and Sections 9.09 through 9.13 of the Agreement shall apply to this Amendment mutatis mutandis with respect hereto.
16. No Other Changes. Except as expressly set forth in this Amendment, all of the terms, provisions and conditions of the Agreement shall remain in full force and effect. Without limiting the generality of the foregoing, except as expressly set forth herein, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Agreement or as a waiver of or consent to any further or future action on the part of any party that would require the waiver or consent of any other party. All references to the Agreement shall hereinafter refer to the Agreement as amended hereby.
[Signatures on following page.]
4
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the Effective Date.
| PURCHASER: | |
|---|---|
| HCM II ACQUISITION CORP. | |
| By: | /s/ Shawn Matthews |
| Name: | Shawn Matthews |
| Title: | Chief Executive Officer |
| COMPANY: | |
| TERRESTRIAL ENERGY INC. | |
| By: | /s/ Simon Irish |
| Name: | Simon Irish |
| Title: | Chief Executive Officer |
[Signature Page – First Amendment to Business Combination Agreement]
Exhibit 2.3
CERTIFICATE OF MERGER
OF
HCM II MERGER SUB INC.
(a Delaware corporation)
WITH AND INTO
TERRESTRIAL ENERGY INC.
(a Delaware corporation)
* * * * * * * * * *
In accordance with the provisions of § 251 of the
General Corporation Law of the
State of Delaware
* * * * * * * * * *
Terrestrial Energy Inc., a corporation duly organized and existing under and by virtue of the laws of the State of Delaware (the “Corporation”), desiring to merge HCM II Merger Sub Inc. (“Merger Sub”), a Delaware corporation, with and into the Corporation, pursuant to Title 8, § 251(c) of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY as follows:
FIRST: The name and state of incorporation of each constituent corporation of the merger (the “Merger”) are as follows:
| NAME | STATE OF INCORPORATION |
|---|---|
| Terrestrial Energy Inc. | Delaware |
| HCM II Merger Sub Inc. | Delaware |
SECOND: A Business Combination Agreement (the “Business Combination Agreement”) among the parties thereto has been approved, adopted, executed and acknowledged by the Corporation, in accordance with the requirements of § 251 of the General Corporation Law of the State of Delaware, and by Merger Sub, in accordance with the requirements of § 251 and § 228 of the General Corporation Law of the State of Delaware.
THIRD: Under the terms of the Business Combination Agreement, Merger Sub will merge with and into the Corporation, with the Corporation being the surviving corporation. The name of the surviving corporation of the merger is Terrestrial Energy Inc., a Delaware corporation (the “Surviving Corporation”). Upon the effective time of the merger, the name of the Surviving Corporation shall be changed to Terrestrial Energy Development Inc.
FOURTH: At the effective time of the merger, the Certificate of Incorporation of the Surviving Corporation shall be amended and restated to read in its entirety as attached hereto as Exhibit A and as so amended and restated shall be the Amended and Restated Certificate of Incorporation of the Surviving Corporation until thereafter amended in accordance with applicable law.
FIFTH: An executed copy of the Business Combination Agreement is on file at the principal place of business of the Surviving Corporation, 2730 W. Tyvola Road, Suite 100, Charlotte, NC 28217, and a copy of the Business Combination Agreement will be furnished by the Surviving Corporation, upon request and without cost, to any stockholder of any constituent corporation.
SIXTH: The merger shall be effective at 1:00 p.m., Eastern Time, on October 28^th^, 2025.
* * * * *
IN WITNESS WHEREOF, the undersigned, for the purpose of effectuating the merger of the constituent corporations, pursuant to the General Corporation Law of the State of Delaware, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true and accordingly has hereunto signed this Certificate of Merger this 28^th^ day of October, 2025.
| By: | /s/ Simon Irish |
|---|---|
| Authorized Officer | |
| Name: | Simon Irish |
| Print or Type |
2
EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
See attached.
3
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
TERRESTRIAL ENERGY DEVELOPMENT INC.
ARTICLE I
The name of this corporation is Terrestrial Energy Development Inc. (the “Corporation”).
ARTICLE II
The address of the registered office of the Corporation in the State of Delaware is 131 Continental Drive, Suite 301, Newark, New Castle County, Delaware 19713. The name of its registered agent at such address is Incorp Services, Inc.
ARTICLE III
The purpose of this Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”).
ARTICLE IV
This Corporation is authorized to issue Common Stock. The total number of shares that the Corporation is authorized to issue is one thousand (1,000) shares of Common Stock, each having a par value of $0.001.
ARTICLE V
A. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors (the “Board”). The number of directors that shall constitute the whole Board shall be fixed by the Board in the manner provided in the bylaws of the Corporation.
B. Election of directors need not be by ballot unless the bylaws so provide.
ARTICLE VI
The Board may from time to time adopt, amend, alter, supplement, rescind or repeal any or all of the bylaws of the Corporation without any action on the part of the stockholders; provided, however, that the stockholders may adopt, amend or repeal any bylaw adopted by the Board, and no amendment or supplement to the bylaws adopted by the Board shall vary or conflict with any amendment or supplement adopted by the stockholders. If the DGCL is hereafter amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited, as applicable, to the fullest extent permitted by the DGCL as amended.
ARTICLE VII
To the fullest extent permitted under the DGCL, as amended from time to time, no director or officer of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty owed to the Corporation or its stockholders. If the DGCL is hereafter amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended, automatically and without further action, upon the date of such amendment. Any amendment or repeal of this Article VII shall not adversely affect any right or protection of a director or officer of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment or repeal.
4
ARTICLE VIII
A. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another entity or enterprise, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement (except for judgments, fines and amounts paid in settlement in any action or suit by or in the right of the Corporation to procure a judgment in its favor) actually and reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section VIII.C, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board.
B. To the extent not prohibited by applicable law, the Corporation shall pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any Proceeding in advance of its final disposition; provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article VIII or otherwise.
C. If a claim for indemnification or advancement of expenses under this Article VIII is not paid in full within 30 days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.
D. The rights conferred on any Covered Person by this Article VIII shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, the bylaws of the Corporation, agreement, vote of stockholders or disinterested directors or otherwise.
E. The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another entity or enterprise shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other entity or enterprise.
F. Any amendment or repeal of the foregoing provisions of this Article VIII shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such amendment or repeal.
G. This Article VIII shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.
ARTICLE IX
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon the stockholders herein are granted subject to this reservation.
ARTICLE X
The Corporation elects not to be governed by Section 203 of the DGCL.
5
Exhibit 2.4
PLAN OF DOMESTICATION
This PLAN OF DOMESTICATION (the “Plan of Domestication”) is made on October 23, 2025 and sets forth the terms and conditions pursuant to which HCM II Acquisition Corp., a Cayman Islands exempted company (“HCM II”), shall effect a domestication into a Delaware corporation (the “Domestication”) to be known as HCM II Acquisition Corp., pursuant to Sections 265 and 388 of the Delaware General Corporation Law (the “DGCL”).
RECITALS
WHEREAS, HCM II is a Cayman Islands exempted company duly formed and validly existing under the laws of the Cayman Islands;
WHEREAS, the Board of Directors of HCM II (the “Board”) has determined that it is advisable and in the best interests of HCM II that HCM II be converted into and thereafter become, and continue to exist as, a corporation in accordance with Sections 265 and 388 of the DGCL; and
WHEREAS, pursuant to Section 265(h) of the DGCL, the Board has duly approved, authorized, adopted, ratified and confirmed the Domestication pursuant to Sections 265 and 388 of the DGCL.
NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, HCM II agrees as follows:
1. Domestication. Upon the Certificate of Domestication and the Certificate of Incorporation becoming effective under Section 103 of the DGCL (the “Effective Time”), HCM II will be converted into a Delaware corporation, pursuant to Sections 265 and 388 of the DGCL, under the name “HCM II Acquisition Corp.” (the “Corporation”) and will, for all purposes of the laws of the State of Delaware, be deemed to be the same entity as HCM II. HCM II will not be required to wind up its affairs or pay its liabilities and distribute its assets, and the Domestication will not be deemed to constitute a dissolution of HCM II and will constitute a continuation of the existence of HCM II in the form of a Delaware corporation.
2. Effective Time. HCM II shall file the Certificate of Domestication, in the form attached hereto as Exhibit A, and the Certificate of Incorporation, in the form attached hereto as Exhibit B (the “Certificate of Incorporation”), with the Secretary of State of the State of Delaware pursuant to Sections 103 and 265 of the DGCL.
3. Conversion of Securities. By virtue of the Domestication:
| (a) | each of the then issued and outstanding Class A ordinary<br>shares of HCM II will convert automatically, on a one-for-one basis, into a share of common stock of the Corporation having the rights,<br>powers and privileges, and the obligations, set forth in the Certificate of Incorporation; |
|---|---|
| (b) | each of the then issued and outstanding public warrants of<br>HCM II will convert automatically into a public warrant to acquire one share of the Corporation’s common stock, pursuant to the<br>Warrant Agreement, dated August 19, 2024, between HCM II and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant<br>Agreement”); |
| --- | --- |
| (c) | each of the then issued and outstanding private placement<br>warrants of HCM II will convert automatically into a private placement warrant to acquire one share of the Corporation’s common<br>stock, pursuant to the Warrant Agreement; and |
| --- | --- |
| (d) | each of the then issued and outstanding units of HCM II that<br>have not been previously separated into the underlying Class A ordinary shares and underlying public warrants of HCM II upon the request<br>of the holder thereof, will be cancelled and will entitle the holder thereof to one share of common stock of the Corporation and one-half<br>of one public warrant to acquire one share of common stock of the Corporation. |
| --- | --- |
4. Tax Matters. For United States federal income tax purposes, the Domestication is intended to qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the U.S. Internal Revenue Code of 1986, as amended, and this Plan of Domestication is intended to constitute a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a).
5. Governing Documents. (i) At the Effective Time, the Certificate of Incorporation of HCM II (initially filed in accordance with the Companies Law of the Cayman Islands) shall be canceled and the Amended and Restated Memorandum and Articles of Association of HCM II, adopted by special resolution dated as of August 15, 2024 and effective as of August 15, 2024, as may be amended, modified or supplemented, shall be terminated and be of no further force or effect and (ii) from and after the Effective Time, the Certificate of Incorporation, in the form attached hereto as Exhibit B, and the By-Laws of the Corporation, in the form attached hereto as Exhibit C (the “Bylaws”), will govern the affairs of the Corporation and the conduct of its business, until thereafter amended in accordance with the DGCL and their respective terms.
6. Board of Directors. Each member of the Board as of immediately prior to the Effective Time shall be a director of the Corporation from and after the Effective Time, each of whom shall serve as directors of the Corporation until such time as their respective successors have been duly elected and qualified, or until such director’s earlier removal, resignation, death or disability, in each case, in accordance with the DGCL, the Certificate of Incorporation and the Bylaws.
7. Officers. Each officer of HCM II as of immediately prior to the Effective Time shall be an officer of the Corporation from and after the Effective Time, and shall retain the same title with the Corporation from and after the Effective Time as he or she had with HCM II immediately prior to the Effective Time, each of whom shall serve until such time as their respective successors have been designated by the board of directors, or until such officer’s earlier removal, resignation, death or disability, in each case, in accordance with the DGCL, the Certificate of Incorporation and the Bylaws.
8. Effects of Domestication. Immediately upon the Effective Time, the Domestication shall have the effects set forth in Section 265(f) of the DGCL, including, without limitation, all of the rights, privileges and powers of HCM II, and all property, real, personal and mixed, and all debts due to HCM II, as well as all other things and causes of action belonging to HCM II, will remain vested in the Corporation and will be the property of the Corporation and the title to any real property vested by deed or otherwise in HCM II will not revert or be in any way impaired by reason of the DGCL. Following the Domestication, all rights of creditors and all liens upon any property of HCM II will be preserved unimpaired, and all debts, liabilities and duties of HCM II will remain attached to the Corporation, and may be enforced against the Corporation to the same extent as if said debts, liabilities and duties had originally been incurred or contracted by the Corporation. The rights, privileges, powers and interests in property of HCM II as well as the debts, liabilities and duties of HCM II, will not be deemed, as a consequence of the Domestication, to have been transferred to the Corporation for any purpose of the laws of the State of Delaware.
9. Further Assurances. If at any time the Corporation, or its successors or assigns, shall consider or be advised that any further assignments or assurances in law or any other acts are necessary or desirable to carry out the purposes of this Plan of Domestication, HCM II and its directors and authorized officers shall be deemed to have granted to the Corporation an irrevocable power of attorney to execute and deliver all such proper deeds, assignments and assurances in law and to do all acts necessary or proper to vest, perfect or confirm title to and possession of such rights, properties or assets in the Corporation and otherwise to carry out the purposes of this Plan of Domestication, and the directors and authorized officers of the Corporation are fully authorized in the name of HCM II or otherwise to take any and all such action.
10. Amendment or Termination. This Plan of Domestication may be amended or terminated at any time before the Effective Time by action of the Board.
11. Miscellaneous. The provisions of this Plan of Domestication shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. This Plan of Domestication shall be governed by and construed in accordance with the laws of the State of Delaware, including the DGCL, without giving effect to any choice of law or conflict of law provisions or rule (except to the extent that the laws of the Cayman Islands govern the Domestication) that would cause the application of the laws of any jurisdiction other than the State of Delaware. This Plan of Domestication may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
***
IN WITNESS WHEREOF, this Plan of Domestication has been duly executed and delivered by a duly authorized officer of HCM II as of the date first written above.
| HCM II Acquisition Corp. | |
|---|---|
| /s/ Shawn Matthews | |
| Name: | Shawn Matthews |
| Title: | Chairman and Chief Executive Officer |
Exhibit A
Certificate of Domestication
[intentionally omitted]
Exhibit B
Certificate of Incorporation
[intentionally omitted]
Exhibit C
Bylaws
[intentionally omitted]
Exhibit 3.1
STATE OF DELAWARE
CERTIFICATE OF DOMESTICATION
FROM A NON-DELAWARE CORPORATION
TO A DELAWARE CORPORATION
PURSUANT TO SECTION 388 OF THE
DELAWARE GENERAL CORPORATION LAW
HCM II Acquisition Corp., presently a Cayman Islands exempted company, organized and existing under the laws of the Cayman Islands (the “Non-Delaware Corporation”), does hereby certify:
| 1) | The Non-Delaware Corporation was first formed on April 4, 2024. |
|---|---|
| 2) | The name under which the Non-Delaware Corporation first formed was HCM II Acquisition Corp., and the jurisdiction where the Non-Delaware<br>Corporation first formed is the Cayman Islands. |
| --- | --- |
| 3) | The name of the Non-Delaware Corporation immediately prior to filing this Certificate is HCM II Acquisition Corp. |
| --- | --- |
| 4) | The jurisdiction that constituted the seat, siege social, or principal place of business or central administration of the Non-Delaware<br>Corporation or any other equivalent thereto under applicable law, immediately prior to the filing of this Certificate is the Cayman Islands. |
| --- | --- |
| 5) | The name of the Corporation as set forth in the Certificate of Incorporation is HCM II Acquisition Corp. |
| --- | --- |
| 6) | The domestication has been approved in the manner provided for by the document, instrument, agreement or other writing, as the case<br>may be, governing the internal affairs of the Non-Delaware Corporation and the conduct of its business or by applicable non-Delaware law,<br>as appropriate. |
| --- | --- |
[Signature on next page.]
IN WITNESS WHEREOF, the undersigned being duly authorized to sign on behalf of the converting Non-Delaware Corporation has executed this Certificate on the 23rd day of October, 2025.
| HCM II Acquisition Corp., a Cayman <br><br>Islands exempted company | |
|---|---|
| /s/ Shawn Matthews | |
| Name: | Shawn Matthews |
| Title: | Chairman and Chief Executive Officer |
Exhibit 3.2
CERTIFICATE OF INCORPORATION
OF
HCM II ACQUISITION CORP.
* * * * *
ARTICLE I
NAME
The name of the Corporation is HCM II Acquisition Corp. (the “Corporation”).
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of the registered office of the Corporation in the State of Delaware is The Corporation Trust Company. The name of the registered agent of the Corporation in the State of Delaware at such address is 1209 Orange Street, Wilmington, Delaware 19801.
ARTICLE III
PURPOSE
| A. | The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now<br>or hereafter be organized under the General Corporation Law of the State of Delaware (the “DGCL”). |
|---|---|
| B. | The Corporation is to have perpetual existence. |
| --- | --- |
ARTICLE IV
CAPITAL STOCK
| A. | The total number of shares of all classes of stock that the Corporation shall have authority to issue<br>is 501,000,000, which shall be divided into two classes as follows: |
|---|
500,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”); and
1,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”).
| B. | The Board of Directors of the Corporation (the “Board of Directors”) is hereby expressly<br>authorized, by resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred<br>Stock and, with respect to each such series, to fix the designation of such series, the powers (including voting powers), preferences<br>and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, of such series<br>of Preferred Stock and the number of shares of such series, which number the Board of Directors may, except where otherwise provided in<br>the designation of such series, increase (but not above the total number of authorized shares of Preferred Stock) or decrease (but not<br>below the number of shares of such series then outstanding) and as may be permitted by the DGCL. The powers, preferences and relative,<br>participating, optional and other special rights of, and the qualifications, limitations or restrictions thereof, of each series of Preferred<br>Stock, if any, may differ from those of any and all other series at any time outstanding. Except as otherwise expressly provided in this<br>Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock (a “PreferredStock Designation”)), no vote of the holders of shares of Preferred Stock or Common Stock shall be a prerequisite to the issuance<br>of any shares of any series of the Preferred Stock so authorized in accordance with this Certificate of Incorporation. |
|---|---|
| C. | Each holder of record of Common Stock, as such, shall have one vote for each share of Common Stock that<br>is outstanding in his, her or its name on the books of the Corporation on all matters on which stockholders are entitled to vote generally.<br>Except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation<br>(including any Preferred Stock Designation) that relates solely to the terms, number of shares, powers, designations, preferences or relative,<br>participating, optional or other special rights (including, without limitation, voting rights), or to qualifications, limitations or restrictions<br>thereof, of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or<br>together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any<br>Preferred Stock Designation) or pursuant to the DGCL. |
| --- | --- |
| D. | Except as otherwise required by law, holders of any series of Preferred Stock shall be entitled to only<br>such voting rights, if any, as shall expressly be granted thereto by this Certificate of Incorporation (including any Preferred Stock<br>Designation). |
| --- | --- |
| E. | Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred<br>Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the payment<br>of dividends and other distributions in cash, property or shares of stock of the Corporation, dividends and other distributions may be<br>declared and paid ratably on the Common Stock out of the assets of the Corporation that are legally available for this purpose at such<br>times and in such amounts as the Board of Directors in its discretion shall determine. |
| --- | --- |
| F. | Upon the dissolution, liquidation or winding up of the Corporation, after payment or provision for payment<br>of the debts and other liabilities of the Corporation and subject to the rights, if any, of the holders of any outstanding series of Preferred<br>Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the distribution<br>of assets of the Corporation upon such dissolution, liquidation or winding up of the Corporation, the holders of Common Stock shall be<br>entitled to receive the remaining assets of the Corporation available for distribution to its stockholders ratably in proportion to the<br>number of shares held by them. |
| --- | --- |
| G. | The number of authorized shares of Preferred Stock or Common Stock may be increased or decreased (but<br>not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock<br>of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision<br>thereto) on a one vote per share basis, and no vote of the holders of any of the Common Stock or the Preferred Stock voting separately<br>as a class shall be required therefor, unless a vote of any such holder is required pursuant to this Certificate of Incorporation (including<br>any Preferred Stock Designation). |
| --- | --- |
ARTICLE V
AMENDMENT OF THE CERTIFICATE OF INCORPORATION AND BYLAWS
| A. | In addition to any vote required by applicable law or this Certificate of Incorporation (including any<br>Preferred Stock Designation), the amendment, alteration, repeal or rescission of, in whole or in part, or the adoption of any provision<br>inconsistent with, the following provisions in this Certificate of Incorporation shall require the affirmative vote of the holders of<br>at least 66⅔% in voting power of all the then-outstanding shares of stock of the Corporation entitled to vote thereon, voting together<br>as a single class: this Article V, Article VI, Article VII, Article VIII, and Section<br>B of Article X. |
|---|---|
| B. | The Board of Directors is expressly authorized to make, repeal, alter, amend and rescind, in whole or<br>in part, the bylaws of the Corporation (as in effect from time to time, the “Bylaws”) without the assent or vote of<br>the stockholders in any manner not inconsistent with the laws of the State of Delaware or this Certificate of Incorporation. In addition<br>to any vote of the holders of any class or series of capital stock of the Corporation required by this Certificate of Incorporation (including<br>any Preferred Stock Designation), by the Bylaws or applicable law, the affirmative vote of the holders of at least 66⅔% in voting<br>power of all the then-outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, shall<br>be required in order for the stockholders of the Corporation to alter, amend, repeal or rescind, in whole or in part, any provision of<br>the Bylaws or to adopt any provision inconsistent therewith. |
| --- | --- |
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ARTICLE VIBOARD OF DIRECTORS
| A. | Except as otherwise provided in this Certificate of Incorporation or the DGCL, the business and affairs<br>of the Corporation shall be managed by or under the direction of the Board of Directors. Subject to the rights of holders of any series<br>of Preferred Stock to elect directors, the number of directors of the Corporation shall be fixed from time to time solely by resolution<br>of the majority of the Board of Directors. No decrease in the number of directors constituting the Board of Directors shall shorten the<br>term of any incumbent director. |
|---|---|
| B. | Subject to the rights of holders of any series of Preferred Stock to elect directors, the Board of Directors<br>shall be and is divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be<br>possible, of one third of the total number of directors constituting the entire Board of Directors. The Board of Directors is authorized<br>to assign members of the Board of Directors already in office to Class I, Class II or Class III at the time such classification becomes<br>effective. |
| --- | --- |
| C. | Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding,<br>each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders<br>at which such director was elected; provided, that each director initially assigned to Class I shall serve for a term expiring<br>at the Corporation’s first annual meeting of stockholders held after the effectiveness of this Certificate of Incorporation; each<br>director initially assigned to Class II shall serve for a term expiring at the Corporation’s second annual meeting of stockholders<br>held after the effectiveness of this Certificate of Incorporation; and each director initially assigned to Class III shall serve for a<br>term expiring at the Corporation’s third annual meeting of stockholders held after the effectiveness of this Certificate of Incorporation;<br>provided further, that the term of each director shall continue until the election and qualification of his or her successor and<br>be subject to his or her earlier death, disqualification, resignation or removal. |
| --- | --- |
| D. | Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding,<br>any newly created directorship on the Board of Directors that results from an increase in the number of directors and any vacancy occurring<br>on the Board of Directors (whether by death, resignation, retirement, disqualification, removal or other cause) shall be filled only by<br>a majority of the directors then in office, even if less than a quorum, or by a sole remaining director (and not by the stockholders).<br>Any director elected to fill a vacancy or newly created directorship shall hold office until the next election of the class for which<br>such director shall have been chosen and until his or her successor shall be elected and qualified, or until his or her earlier death,<br>resignation, retirement, disqualification or removal. |
| --- | --- |
| E. | Any director or the entire Board of Directors may be removed from office at any time, but only for cause<br>and only by the affirmative vote of the holders of at least 66 2/3% in voting power of all the then outstanding shares of stock of the<br>Corporation entitled to vote on the election of such director, voting together as a single class. |
| --- | --- |
| F. | Elections of directors need not be by written ballot unless the Bylaws shall so provide. |
| --- | --- |
| G. | Pursuant to the Bylaws, the Board of Directors may establish one or more committees to which may be delegated<br>any or all of the powers and duties of the Board of Directors to the full extent permitted by law. |
| --- | --- |
ARTICLE VII
LIMITATION OF DIRECTOR AND OFFICER LIABILITY
| A. | To the fullest extent permitted by the DGCL as it now exists or may hereafter be amended, a director or<br>officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any breach of<br>fiduciary duty owed to the Corporation or its stockholders. If the DGCL is hereafter amended to authorize corporate action further eliminating<br>or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated<br>or limited to the fullest extent permitted by the DGCL as so amended, automatically and without further action, upon the date of such<br>amendment. |
|---|
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| B. | To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification<br>of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which applicable law permits<br>the Corporation to provide indemnification and advancement of expenses) through provisions of the Bylaws, agreements with such persons,<br>vote of stockholders or disinterested directors, or otherwise. Any repeal or modification of this provision shall not adversely affect<br>any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification. |
|---|---|
| C. | Neither the amendment nor repeal of this Article VII, nor the adoption of any provision of<br>this Certificate of Incorporation, nor, to the fullest extent permitted by the DGCL, any modification of law shall eliminate, reduce or<br>otherwise adversely affect any right or protection of a current or former director or officer of the Corporation existing at the time<br>of such amendment, repeal, adoption or modification. |
| --- | --- |
ARTICLE VIII
CONSENT OF STOCKHOLDERS IN LIEU OF MEETING, ANNUAL AND SPECIAL
MEETINGS OF STOCKHOLDERS
| A. | Any action required or permitted to be taken by the stockholders of the Corporation must be effected at<br>a duly called annual or special meeting of such holders and may not be effected by any consent in lieu of a meeting of stockholders by<br>such holders; provided, however, that any action required or permitted to be taken by the holders of Preferred Stock, voting<br>separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice<br>and without a vote, to the extent expressly so provided by the applicable certificate(s) of designation relating to such series of Preferred<br>Stock. |
|---|---|
| B. | Except as otherwise required by law and subject to the rights of the holders of any series of Preferred<br>Stock, special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time only by the Chief<br>Executive Officer, the President, the Board of Directors, the Chairperson of the Board of Directors, or any other person designated by<br>the Board of Directors, but such special meetings may not be called by stockholders or any other person or persons. |
| --- | --- |
| C. | An annual meeting of stockholders for the election of directors to succeed those whose terms expire and<br>for the transaction of such other business as may properly come before the meeting, shall be held at such place, if any, on such date,<br>and at such time as shall be fixed exclusively by resolution adopted by the Board or a duly authorized committee thereof. |
| --- | --- |
ARTICLE IX
MISCELLANEOUS
| A. | If any provision or provisions of this Certificate of Incorporation shall be held to be invalid, illegal<br>or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions<br>in any other circumstance and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion<br>of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that<br>is not itself held to be invalid, illegal or unenforceable) shall not, to the fullest extent permitted by law, in any way be affected<br>or impaired thereby and (ii) to the fullest extent permitted by law, the provisions of this Certificate of Incorporation (including, without<br>limitation, each such portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid,<br>illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents<br>from personal liability in respect of their good faith service or for the benefit of the Corporation to the fullest extent permitted by<br>law. |
|---|
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| B. | Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery<br>of the State of Delaware (or if such court does not have subject matter jurisdiction another state or federal court (as appropriate) located<br>within the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action<br>or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current<br>or former director, officer or other employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders,<br>creditors or other constituents, (iii) any action asserting a claim against the Corporation or any current or former director or officer<br>of the Corporation arising pursuant to any provision of the DGCL or this Certificate of Incorporation or the Bylaws (as either may be<br>amended and/or restated from time to time), (iv) any action asserting a claim governed by the internal affairs doctrine, or (v) any action<br>as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, except for any action asserted to enforce<br>any liability or duty created by the Securities Exchange Act of 1934, as amended, or, in each case, rules and regulations promulgated<br>thereunder, for which there is exclusive federal jurisdiction. Unless the Corporation consents in writing to the selection of an alternative<br>forum, the federal district courts of the United States of America shall be, to the fullest extent permitted by law, the sole and exclusive<br>forum for any action asserting a claim arising under the Securities Act of 1933. |
|---|
To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of Section B of this Article X.
| C. | The name and mailing address of the sole incorporator is as follows: |
|---|
Shawn Matthews
100 First Stamford Pl,
Stamford, CT 06902
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, HCM II Acquisition Corp. has caused this Certificate of Incorporation to be executed by its Incorporator on this day of October 23, 2025.
| HCM II Acquisition Corp. | |
|---|---|
| By: | /s/ Shawn Matthews |
| Name: | Shawn Matthews, Incorporator |
Exhibit 3.3
HCM II ACQUISITION CORP.
BYLAWS
(as adopted and effective as of October 23, 2025)
TABLE OF CONTENTS
| STOCKHOLDERS MEETINGS | 1 | ||
|---|---|---|---|
| 1. | Time and Place of Meetings. | 1 | |
| 2. | Annual Meetings. | 1 | |
| 3. | Special Meetings. | 1 | |
| 4. | Notice of Meetings. | 1 | |
| 5. | Inspectors. | 1 | |
| 6. | Quorum. | 2 | |
| 7. | Voting List. | 2 | |
| 8. | Voting; Proxies. | 2 | |
| 9. | Order of Business. | 3 | |
| 10. | Notice of Stockholder Proposals. | 3 | |
| 11. | Notice of Directors Nominations. | 6 | |
| 12. | Additional Provisions Relating to the Notice of Stockholder Business and Director Nominations. | 7 | |
| 13. | Record Dates. | 9 | |
| 14. | Recesses and Adjournments. | 9 | |
| DIRECTORS | 10 | ||
| 15. | Function. | 10 | |
| 16. | Number, Election and Terms. | 10 | |
| 17. | Removal. | 10 | |
| 18. | Resignation. | 10 | |
| 19. | Regular Meetings. | 10 | |
| 20. | Special Meetings. | 10 | |
| 21. | Quorum; Voting. | 10 | |
| 22. | Participation in Meetings by Remote Communications. | 10 | |
| 23. | Committees. | 11 | |
| 24. | Compensation. | 11 | |
| 25. | Rules. | 11 | |
| 26. | Chairperson; Vice Chairperson. | 11 | |
| 27. | Indemnification. | 11 | |
| NOTICES | 13 | ||
| 28. | Generally. | 13 | |
| 29. | Waivers. | 13 | |
| OFFICERS | 14 | ||
| 30. | Generally. | 14 | |
| 31. | Compensation. | 15 | |
| 32. | Succession. | 15 | |
| 33. | Authority and Duties. | 15 | |
| STOCK | 16 | ||
| 34. | Certificates. | 16 | |
| 35. | Lost, Stolen or Destroyed Certificates. | 16 | |
| 36. | Transfers | 16 | |
| GENERAL | 16 | ||
| 37. | Fiscal Year. | 16 | |
| 38. | Reliance upon Books, Reports and Records. | 16 | |
| 39. | Amendments. | 16 | |
| 40. | Severability | 16 | |
| 41. | Certain Defined Terms | 16 |
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STOCKHOLDERS MEETINGS
1. Time and Place of Meetings. All meetings of stockholders will be held at such time and place, within or without the State of Delaware, as may be designated by the Board of Directors (the “Board”) of HCM II Acquisition Corp., a Delaware corporation (the “Corporation”), from time to time in such manner as set forth in the Corporation’s Certificate of Incorporation (the “Certificate of Incorporation”). Notwithstanding the foregoing, the Board may, in its sole discretion, determine that a meeting of stockholders will not be held at any place, but may instead be held by means of remote communications in a manner consistent with the General Corporation Law of the State of Delaware, as amended (the “DGCL”), subject to such guidelines and procedures as the Board may adopt from time to time. The Board may cancel or reschedule to an earlier or later date any previously scheduled annual or special meeting of stockholders.
2. Annual Meetings. At each annual meeting of stockholders, the stockholders will elect the directors from the nominees for director, to succeed those directors whose terms expire at such meeting and will transact such other business, in such case as may properly be brought before the meeting in accordance with Sections 9, 10, 11 and 12. The Board may postpone, reschedule or cancel any previously scheduled annual meeting of stockholders, before or after the notice for such meeting has been sent to the stockholders.
3. Special Meetings.(a) A special meeting of stockholders may be called only by such persons and only in such manner as set forth in the Certificate of Incorporation, in each case to transact only such business as is specified in the notice of such meeting.
4. Notice of Meetings. Notice of every meeting of stockholders, stating the place, if any, date and time thereof, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, will be given, in a form permitted by Section 28 or by the DGCL, not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting, except as otherwise provided by law. When a meeting is recessed or adjourned to another place, date, or time, notice need not be given of the recessed or adjourned meeting if the place, if any, date and time thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such recessed or adjourned meeting, are (a) announced at the meeting at which the recess or adjournment is taken (b) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication or (c) set forth in the notice of meeting; provided, however, that if the recess or adjournment is for more than thirty (30) days, or if after the recess or adjournment a new record date is fixed for the recessed or adjourned meeting, written notice of the place, if any, date and time thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such recessed or adjourned meeting, must be given in conformity herewith.
5. Inspectors. The Board will, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the presiding officer of the meeting will appoint one or more inspectors to act at the meeting. The inspector shall have the duties prescribed by law and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed inspectors.
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6. Quorum. Except as otherwise provided by law, the Certificate of Incorporation, these bylaws (“Bylaws”), or in a certificate of designation of a series of preferred stock filed by the Board pursuant to the DGCL (“Preferred Stock Designation”), the holders of a majority in voting power of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote at the meeting, present in person, present by means of remote communication in a manner, if any, authorized by the Board in its sole discretion, or represented by proxy, will constitute a quorum at a meeting of stockholders for the transaction of business thereat; provided, however, that where a separate vote by a class or classes or series of capital stock is required by law, the Certificate of Incorporation, these Bylaws, or in a Preferred Stock Designation, the holders of a majority in voting power of the shares of such class or classes or series of the capital stock of the Corporation issued and outstanding and entitled to vote on such matter, present in person, present by means of remote communication in a manner, if any, authorized by the Board in its sole discretion, or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on such matter. A quorum, once established, will not be broken by the subsequent withdrawal of enough votes to leave less than a quorum. If, however, such a quorum shall not be present or represented at any meeting of the stockholders, the presiding officer of the meeting shall have the power to recess or adjourn the meeting from time to time, in the manner provided in Section 14, until a quorum is present or represented. At any such adjourned meeting at which there is a quorum, any business may be transacted that might have been transacted at the meeting originally called.
7. Voting List. The Corporation shall prepare, at least ten (10) days before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date), arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting, (a) on a reasonably accessible electronic network as permitted by applicable law (provided that the information required to gain access to the list is provided with the notice of the meeting), or (b) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is held at a location where stockholders may attend in person, a list of stockholders entitled to vote at the meeting shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present at the meeting. If the meeting is held solely by means of remote communication, then the list shall be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access the list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 7 or to vote in person or by proxy at any meeting of stockholders. The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list.
8. Voting; Proxies.
(a) General. Except as otherwise provided by law, by the Certificate of Incorporation, in these Bylaws, or in a Preferred Stock Designation, each stockholder will be entitled at every meeting of the stockholders to one (1) vote for each share of stock having voting power standing in the name of such stockholder on the books of the Corporation on the record date for the meeting and such votes may be cast either in person or by proxy. Every proxy must be authorized in a manner permitted by Section 212 of the DGCL (or any successor provision) and may be documented, signed and delivered in accordance with Section 116 of the DGCL (or any successor provision) provided that such authorization shall set forth, or be delivered with, information enabling the Corporation to reasonably determine the identity of the stockholder granting such authorization.
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(b) Vote Required for Stockholder Action. When a quorum is present at any meeting of stockholders, the affirmative vote of a majority of the votes properly cast on the matter (excluding any abstentions or broker non-votes) will be the act of the stockholders with respect to all matters other than the election of directors (who will be elected by a plurality of all votes properly cast), except as otherwise provided in these Bylaws, the Certificate of Incorporation, a Preferred Stock Designation, the rules or regulations of any stock exchange applicable to the Corporation, or by law.
9. Order of Business. Meetings of stockholders shall be presided over by the Chairperson, if any, or in his or her absence, by the Vice Chairperson, if any, or in his or her absence, by the Chief Executive Officer, or in his or her absence, by the President, or in his or her absence, by a Vice President, or in the absence of the foregoing persons by a chairperson designated by the Board, or in the absence of such designation, by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence, the chairperson of the meeting may appoint any person to act as secretary of the meeting. Unless otherwise determined by the Board prior to the meeting, the presiding person of any meeting of stockholders will also determine the order of business and have the authority in his or her sole discretion to determine the rules of procedure and regulate the conduct of the meeting, including without limitation by: (a) imposing restrictions on the persons (other than stockholders of the Corporation or their duly appointed proxy holders) that may attend the meeting; (b) ascertaining whether any stockholder or his or her proxy holder may be excluded from the meeting based upon any determination by the presiding officer, in his or her sole discretion, that any such person has disrupted or is likely to disrupt the proceedings thereat; (c) determining the circumstances in which any person may make a statement or ask questions at the meeting; (d) ruling on all procedural questions that may arise during or in connection with the meeting; (e) determining whether any nomination or business proposed to be brought before the meeting has been properly brought before the meeting; and (f) determining the time or times at which the polls for voting at the meeting will be opened and closed.
10. Notice of Stockholder Proposals.
(a) Business to Be Conducted at Annual Meeting. At an annual meeting of stockholders, only such business may be conducted as has been properly brought before the meeting. To be properly brought before an annual meeting, business (other than the nomination of a person for election as a director, which is governed by Section 11, and, to the extent applicable, Section 12), must be (i) brought before the meeting by or at the direction of the Board or (ii) otherwise properly brought before the meeting by a stockholder who (A) has complied with all applicable requirements of this Section 10 and Section 12 in relation to such business, (B) was a stockholder of record of the Corporation at the time of giving the notice required by Section 12(a) and is a stockholder of record of the Corporation at the time of the annual meeting, and (C) is entitled to vote at the annual meeting. For the avoidance of doubt, the foregoing clause (ii) will be the exclusive means for a stockholder to submit business before an annual meeting of stockholders (other than proposals properly made in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the “Exchange Act”) and included in the notice of meeting given by or at the direction of the Board).
(b) Required Form for Stockholder Proposals. To be in proper form, regardless of whether the subject matter is already the subject of any notice to stockholders from the Board, a stockholder’s notice to the Secretary must set forth in writing, on the form provided to the stockholder upon written request to the Secretary and verification that the requesting party is a stockholder or is acting on behalf of a stockholder, including the following information, which must be updated and supplemented, if necessary, so that the information provided or required to be provided will be true and correct on the record date of the annual meeting and as of such date that is ten (10) business days prior to the annual meeting or any adjournment or postponement thereof; which update shall be delivered to the Secretary no later than five (5) business days after the record date for the annual meeting and not later than eight (8) business days prior to the date of the annual meeting.
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(i) Information Regarding the Proposing Person. As to each Proposing Person (as such term is defined in Section 12(d)(ii)):
(A) the name and address of such Proposing Person, as they appear on the Corporation’s stock transfer book;
(B) the class, series and number of shares of the Corporation directly or indirectly beneficially owned or held of record by such Proposing Person (including any shares of any class or series of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership, whether such right is exercisable immediately or only after the passage of time);
(C) a representation (1) that the stockholder giving the notice is a holder of record of stock of the Corporation entitled to vote at the annual meeting and intends to appear at the annual meeting to bring such business before the annual meeting and (2) as to whether any Proposing Person intends to deliver a proxy statement and form of proxy to holders of at least the percentage of shares of the Corporation entitled to vote and required to approve the proposal and, if so, identifying such Proposing Person;
(D) a description of any (1) option, warrant, convertible security, stock appreciation right or similar right or interest (including any derivative securities, as defined under Rule 16a-1 under the Exchange Act or other synthetic arrangement having characteristics of a long position), assuming for purposes of these Bylaws presently exercisable, with an exercise or conversion privilege or a settlement or payment mechanism at a price related to any class or series of securities of the Corporation or with a value derived in whole or in part from the value of any class or series of securities of the Corporation, whether or not such instrument or right is subject to settlement in whole or in part in the underlying class or series of securities of the Corporation or otherwise, directly or indirectly held of record or owned beneficially by such Proposing Person and whether or not such Proposing Person may have entered into transactions that hedge or mitigate the economic effects of such security or instrument and (2) each other direct or indirect right or interest that may enable such Proposing Person to profit or share in any profit derived from, or to manage the risk or benefit from, any increase or decrease in the value of the Corporation’s securities, in each case regardless of whether (x) such right or interest conveys any voting rights in such security to such Proposing Person, (y) such right or interest is required to be, or is capable of being, settled through delivery of such security, or (z) such Proposing Person may have entered into other transactions that hedge the economic effect of any such right or interest (any such right or interest referred to in this clause (D) being a “Derivative Interest”);
(E) any proxy, contract, agreement, arrangement, understanding or relationship pursuant to which the Proposing Person has a right to vote any shares of the Corporation or which has the effect of increasing or decreasing the voting power of such Proposing Person;
(F) any contract, agreement, arrangement, understanding or relationship including any repurchase or similar so called “stock borrowing” agreement or arrangement, the purpose or effect of which is to mitigate loss, reduce economic risk or increase or decrease voting power with respect to any capital stock of the Corporation or which provides any party, directly or indirectly, the opportunity to profit from any decrease in the price or value of the capital stock of the Corporation;
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(G) any material pending or threatened legal proceeding involving the Corporation, any affiliate of the Corporation or any of their respective directors or officers, to which such Proposing Person or its affiliates is a party;
(H) any rights directly or indirectly held of record or beneficially by the Proposing Person to dividends on the shares of the Corporation that are separated or separable from the underlying shares of the Corporation;
(I) any equity interests, including any convertible, derivative or short interests, in any principal competitor of the Corporation;
(J) any performance-related fees (other than an asset-based fee) to which the Proposing Person or any affiliate or immediate family member of the Proposing Person may be entitled as a result of any increase or decrease in the value of shares of the Corporation or Derivative Interests;
(K) a representation whether the stockholder, the beneficial owner, if any, on whose behalf the nomination or other business proposal is being made, any control person, or any other participant (as defined in Item 4 of Schedule 14A under the Exchange Act) will engage in a solicitation with respect to such nomination or other business proposal and, if so, the name of each participant in such solicitation; and a statement: (1) confirming whether, the stockholder, beneficial owner, or any control person intends, or is part of a group that (x) in the case of a nomination, intends to solicit proxies or votes in support of such director nominees or nomination in accordance with Rule 14a-19 under the Exchange Act, including but not limited to, delivering a proxy statement and form of proxy and soliciting at least the percentage of the voting power of all of the shares of the stock of the Corporation required under applicable law to elect the nominee, and (y) in the case of a business proposal, intends to deliver a proxy statement and form of proxy and solicit at least the percentage of voting power of all of the shares of stock of the Corporation required under applicable law to approve the proposal; and (2) whether or not any such stockholder, beneficial owner, or any control person intends to otherwise solicit proxies from stockholders in support of such nomination or other business proposal; and
(L) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required pursuant to Section 14(a) of the Exchange Act to be made in connection with a general solicitation of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting.
(ii) Information Regarding the Proposal: As to each item of business that the stockholder giving the notice proposes to bring before the annual meeting:
(A) a description in reasonable detail of the business desired to be brought before the annual meeting and the reasons why such stockholder or any other Proposing Person believes that the taking of the action or actions proposed to be taken would be in the best interests of the Corporation and its stockholders;
(B) a description in reasonable detail of any material interest of any Proposing Person in such business and a description in reasonable detail of all agreements, arrangements and understandings among the Proposing Persons or between any Proposing Person and any other person or entity (including their names) in connection with the proposal; and
(C) the text of the proposal or business (including the text of any resolutions proposed for consideration).
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(c) No Right to Have Proposal Included. A stockholder is not entitled to have its proposal included in the Corporation’s proxy statement and form of proxy solely as a result of such stockholder’s compliance with the foregoing provisions of this Section 10.
(d) Requirement to Attend Annual Meeting. If a stockholder does not appear at the annual meeting to present its proposal, such proposal will be disregarded (notwithstanding that proxies in respect of such proposal may have been solicited, obtained or delivered).
11. Notice of Directors Nominations.
(a) Nomination of Directors. Subject to the rights, if any, of any series of Preferred Stock to nominate or elect directors under circumstances specified in a Preferred Stock Designation, only persons who are nominated in accordance with the procedures set forth in this Section 11 will be eligible to serve as directors. Nominations of persons for election as directors of the Corporation may be made only at an annual meeting of stockholders and only (i) by or at the direction of the Board or (ii) by a stockholder who (A) has complied with all applicable requirements of this Section 11 and Section 12 in relation to such nomination, (B) was a stockholder of record of the Corporation at the time of giving the notice required by Section 12(a) and is a stockholder of record of the Corporation at the time of the annual meeting, (C) is entitled to vote at the annual meeting and (D) subject to Section 12, has nominated a number of nominees that does not exceed the number of directors that will be elected at such meeting.
(b) Required Form for Director Nominations. To be in proper form, a stockholder’s notice to the Secretary must set forth in writing, substantially in the form provided to the stockholder upon written request to the Secretary, which form shall be provided only upon the receipt of evidence reasonably satisfactory to the Secretary verifying that the requesting party is a stockholder or is acting on behalf of a stockholder:
(i) Information Regarding the Nominating Person. As to each Nominating Person (as such term is defined in Section 12(d)(iii)), the information set forth in Section 10(b)(i) (except that for purposes of this Section 11, the term “Nominating Person” will be substituted for the term “Proposing Person” in all places where it appears in Section 10(b)(i) and any reference to “business” or “proposal” therein will be deemed to be a reference to the “nomination” contemplated by this Section 11).
(ii) Information Regarding the Nominee: As to each person whom the stockholder giving notice proposes to nominate for election as a director:
(A) all information with respect to such proposed nominee that would be required to be set forth in a stockholder’s notice pursuant to Section 10(b)(i) if such proposed nominee were a Nominating Person;
(B) all information relating to such proposed nominee that would be required to be disclosed in a proxy statement or other filing required pursuant to Section 14(a) under the Exchange Act to be made in connection with a general solicitation of proxies for an election of directors in a contested election (including such proposed nominee’s written consent to be named in the proxy statement as a nominee and to serve as a director if elected);
(C) a reasonably detailed description of all direct and indirect compensation and other material monetary agreements, arrangements or understandings during the past three years, any other material relationships, between or among such Nominating Person and its affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee and his or her affiliates, associates or others acting in concert therewith, on the other hand, including all information that would be required to be disclosed pursuant to Items 403 and 404 under Regulation S-K if the stockholder giving the notice or any other Nominating Person were the “registrant” for purposes of such rule and the proposed nominee were a director or executive officer of such registrant;
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(D) a completed questionnaire (in the form provided by the Secretary upon written request) with respect to the identity, background and qualification of the proposed nominee and the background of any other person or entity on whose behalf the nomination is being made; and
(E) a written representation and agreement (in the form provided by the Secretary upon written request) that the proposed nominee (1) is qualified and if elected intends to serve as a director of the Corporation for the entire term for which such proposed nominee is standing for election, (2) is not and will not become a party to (x) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how the proposed nominee, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (y) any Voting Commitment that could limit or interfere with the proposed nominee’s ability to comply, if elected as a director of the Corporation, with the proposed nominee’s fiduciary duties under applicable law, (3) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (4) has read and, if elected as a director of the Corporation, the proposed nominee would be in compliance and will comply, with all applicable publicly disclosed corporate governance, ethics, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.
The Corporation may require any proposed nominee to furnish such other information as may be reasonably required by the Corporation to determine the qualifications and eligibility of such proposed nominee to serve as a director.
(c) No Right to Have Nominees Included. A stockholder is not entitled to have its nominees included in the Corporation’s proxy statement solely as a result of such stockholder’s compliance with the foregoing provisions of this Section 11.
(d) Requirement to Attend Annual Meeting. If a stockholder does not appear at the annual meeting to present its nomination, such nomination will be disregarded (notwithstanding that proxies in respect of such nomination may have been solicited, obtained or delivered).
12. Additional Provisions Relating to the Notice of Stockholder Business and Director Nominations.
(a) Timely Notice. To be timely, a stockholder’s notice required by Section 10(a) or Section 11(a) must be delivered to or mailed and received by the Secretary at the principal executive offices of the Corporation not less than one hundred twenty (120) nor more than one hundred fifty (150) days prior to the first anniversary of the preceding year’s annual meeting of stockholders (which date shall, for purposes of the Corporation’s annual meeting of stockholders in the year 2026, be deemed to have occurred on June 1, 2025); provided, however, that if the date of the annual meeting is scheduled for a date more than thirty (30) days prior to or more than sixty (60) days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of the one hundred twentieth (120^th^) day prior to such annual meeting and the tenth (10th) day following the day on which public disclosure of the date of such meeting is first made. In no event will a recess or adjournment of an annual meeting (or any announcement of any such recess or adjournment) commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Notwithstanding the foregoing, in the event the number of directors to be elected to the Board at the annual meeting is increased by the Board, and there is no public announcement by the Corporation naming the nominees for the additional directors at least one hundred thirty (130) days prior to the first anniversary of the date on which the Corporation held the preceding year’s annual meeting of stockholders, a stockholder’s notice pursuant to Section 11(a) will be considered timely, but only with respect to nominees for the additional directorships, if it is delivered to or mailed and received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.
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(b) Updating Information in Notice. A stockholder providing notice of business proposed to be brought before an annual meeting pursuant to Section 10 or notice of any nomination to be made at an annual meeting pursuant to Section 11 must further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to Section 10 or Section 11, as applicable, is true and correct as of the record date for notice of the meeting and as of the date that is ten (10) days prior to the meeting or any recess, adjournment or postponement thereof. Any such update and supplement must be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation, as promptly as practicable.
(c) Determinations of Form, Effect of Noncompliance, Etc.
(i) The presiding officer of any annual meeting will, if the facts warrant, determine that a proposal was not made in accordance with the procedures prescribed by Section 10 and this Section 12 or that a nomination was not made in accordance with the procedures prescribed by Section 11 and this Section 12, and if he or she should so determine, he or she will so declare to the meeting and the defective proposal or nomination, as applicable, will be disregarded. Notwithstanding anything in these Bylaws to the contrary: (i) no nominations shall be made or business shall be conducted at any annual meeting or special meeting except in accordance with the procedures set forth in Sections 10, 11 and 12, and (ii) unless otherwise required by law, if a Proposing Person intending to propose business or a Nominating Person intending to make nominations at an annual meeting or special meeting pursuant to Sections 10, 11 and 12, as applicable, does not provide the information required under Sections 10, 11 and 12 to the Corporation in accordance with the applicable timing requirements set forth in these Bylaws, or the Proposing Person or Nominating Person (or a qualified representative thereof) does not appear at the meeting to present the proposed business or nominations, such business or nominations shall not be considered, notwithstanding that proxies in respect of such business or nominations may have been received by the Corporation.
(ii) Notwithstanding the provisions of Sections 10, 11 and 12 and unless otherwise required by law, (A) if any Proposing Person (1) provides notice pursuant to Rule 14a-19(b) under the Exchange Act with respect to any nomination or business proposal and (2) subsequently fails to comply with the requirements of Rule 14a-19 under the Exchange Act (or fails to timely provide reasonable evidence sufficient to satisfy the Corporation that such Proposing Person has met the requirements of Rule 14a-19(a)(3) under the Exchange Act), then each applicable nomination or business proposal shall be disregarded, notwithstanding that the applicable nominee is included as a nominee in the Corporation’s proxy statement, notice of meeting or other proxy materials for any annual meeting (or any supplement thereto) and notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the Corporation (which proxies and votes shall be disregarded).
(d) Certain Definitions.
(i) For purposes of Sections 10, 11 and 12, “public disclosure” means disclosure in a press release reported by the Dow Jones News Service, Bloomberg, Associated Press or comparable national news service or in a document filed by the Corporation with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Exchange Act or furnished by the Corporation to stockholders.
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(ii) For purposes of Sections 10 and 12, “Proposing Person” means (A) the stockholder providing the notice of business proposed to be brought before an annual meeting, (B) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is given, and (C) any Affiliate or Associate (each within the meaning of Rule 12b-2 under the Exchange Act) of such stockholder or beneficial owner.
(iii) For purposes of Sections 11 and 12, “Nominating Person” means (A) the stockholder providing the notice of the nomination proposed made to be at an annual meeting, (B) the beneficial owner or beneficial owners, if different, on whose behalf the notice of nomination proposed to be made at the annual meeting is given, and (C) any Affiliate or Associate (each within the meaning of Rule 12b-2 under the Exchange Act) of such stockholder or beneficial owner.
13. Record Dates.
(a) Voting Record Dates. In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders, the Board may fix a record date, which will not precede the date upon which the Board resolution fixing the same is adopted and will not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders will be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders will apply to any recess or adjournment of the meeting; provided, however, that the Board may fix a new record date for the determination of stockholders entitled to vote at the recessed or adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to such notice of such recessed or adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 13(a) at the recessed or adjourned meeting.
(b) Payment Record Dates. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date will not be more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose will be at the close of business on the day on which the Board adopts the resolution relating thereto.
(c) Identity of Registered Holder. The Corporation will be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes, and will not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the Corporation has notice thereof, except as expressly provided by applicable law.
14. Recesses and Adjournments. A meeting of stockholders may be recessed or adjourned from time to time by the presiding officer of the meeting. Upon any recessed or adjourned meeting being reconvened, any business may be transacted which properly could have been transacted in the absence of such recess or adjournment.
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DIRECTORS
15. Function. The business and affairs of the Corporation will be managed under the direction of the Board.
16. Number, Election and Terms. Subject to the rights, if any, of any series of Preferred Stock to elect additional directors under circumstances specified in a Preferred Stock Designation, and to the minimum and maximum number of authorized directors provided in the Certificate of Incorporation, the authorized number of directors may be fixed from time to time only by a resolution adopted by the Board. The directors, other than those who may be elected by the holders of any series of the Preferred Stock, will be classified with respect to the time for which they severally hold office in accordance with the provisions of the Certificate of Incorporation.
17. Removal. Directors may be removed from office only in the manner provided in the Certificate of Incorporation and applicable law.
18. Resignation. Any director may resign at any time upon notice given in writing or by electronic transmission to the Chairperson, if any, the President, the Chief Executive Officer or the Secretary. Any resignation is effective when the resignation is delivered to the Corporation unless the resignation specifies a later effective date or an effective date that is contingent upon the occurrence or non-occurrence of one or more specified events.
19. Regular Meetings. Regular meetings of the Board may be held immediately after the annual meeting of the stockholders and at such other time and place either within or without the State of Delaware as may from time to time be determined by the Board. Notice of regular meetings of the Board need not be given.
20. Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chief Executive Officer, President, any Vice President, the Secretary, or by any member of the Board.
21. Quorum; Voting. At all meetings of the Board, a majority of the directors at any time in office will constitute a quorum of the Board for the transaction of business. Except for action to be taken by committees of the Board as provided in Section 23, and except as otherwise provided by the DGCL, the Certificate of Incorporation or these Bylaws, the act of a majority of the directors present at any meeting at which there is a quorum will be the act of the Board. If a quorum is not present at any meeting of the Board, the directors present thereat may adjourn the meeting from time to time to another place, time, or date, without notice other than announcement at the meeting, until a quorum is present. Unless otherwise restricted by the Certificate of Incorporation, these Bylaws or applicable law, any action required to be taken at a meeting of the Board or any committee thereof, may be taken without a meeting if all directors or members of such committee, as the case may be, consent thereto in writing or by electronic transmission and any consent may be documented, signed and delivered in accordance with applicable law. After an action is taken by unanimous written consent, such consent shall be filed with the minutes of proceedings for the Board or committee in accordance with applicable law.
22. Participation in Meetings by Remote Communications. Members of the Board or any committee designated by the Board may participate in a meeting of the Board or any such committee, as the case may be, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting will constitute presence in person at the meeting.
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23. Committees. The Board may designate one (1) or more committees, each committee to consist of one (1) or more of the directors of the Board. The Board may designate one (1) or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Unless the Board provides otherwise, each committee designated by the Board may make, alter and repeal rules and procedures for the conduct of its business. In the absence of such rules and procedures, each committee shall conduct its business in the same manner as the Board conducts its business. Any resolution of the Board establishing or directing any committee of the Board or establishing or amending the charter of any such committee may establish requirements or procedures relating to the governance and/or operation of such committee that are different from, or in addition to, those set forth in these Bylaws and, to the extent that there is any inconsistency between these Bylaws and any such resolution or charter, the terms of such resolution or charter shall be controlling.
24. Compensation. The Board may establish the compensation of directors, including without limitation compensation for membership on the Board and on committees of the Board, attendance at meetings of the Board or committees of the Board, and for other services provided to the Corporation or at the request of the Board.
25. Rules. The Board may adopt rules and regulations for the conduct of meetings and the oversight of the management of the affairs of the Corporation.
26. Chairperson; Vice Chairperson. The Board of Directors may appoint from its members a Chairperson and a Vice Chairperson, neither of whom need be an employee or officer of the Corporation. If the Board of Directors appoints a Chairperson, such Chairperson shall perform such duties and possess such powers as are assigned by the Board of Directors. If the Board of Directors appoints a Vice Chairperson, such Vice Chairperson shall perform such duties and possess such powers as are assigned by the Board of Directors. Unless otherwise provided by the Board of Directors, the Chairperson or, in his or her absence, the Vice Chairperson, if any, shall preside at all meetings of the Board of Directors.
27. Indemnification.
(a) Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative, is or was a director or an officer of the Corporation (including any constituent corporation absorbed in a merger) or, while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation (including any such constituent corporation) as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, agent or trustee or in any other capacity while serving as a director, officer, employee, agent or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware law, as the same exists or may hereafter be amended (but, in the case of any such amendment, if permitted, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except with respect to proceedings to enforce rights to indemnification or advancement of expenses or with respect to any compulsory counterclaim brought by such indemnitee, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board.
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(b) Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 27(a), an indemnitee shall also have the right to be paid by the Corporation, to the fullest extent not prohibited by applicable law, the expenses (including attorney’s fees) incurred by indemnitee in appearing at, participating in or defending any such proceeding in advance of its final disposition or in connection with a proceeding brought to establish or enforce a right to indemnification or advancement of expenses under this Section 27 (which shall be governed by Section 27(c) (hereinafter an “advancement of expenses”)); provided, however, that, if the DGCL requires or in the case of an advancement of expenses made in a proceeding brought to establish or enforce a right to indemnification or advancement of expenses, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made solely upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified under Section 27(a) and Section 27(b) or otherwise.
(c) Right of Indemnitee to Bring Suit. If a claim under Section 27(a) or Section 27(b) is not paid in full by the Corporation within (i) sixty (60) days after a written claim for indemnification has been received by the Corporation or (ii) thirty (30) days after a claim for an advancement of expenses has been received by the Corporation, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim or to obtain advancement of expenses, as applicable. To the fullest extent permitted by law, if successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Section 27 or otherwise shall be on the Corporation.
(d) Indemnification Not Exclusive. The provision of indemnification to or the advancement of expenses and costs to any indemnitee under this Section 27, or the entitlement of any indemnitee to indemnification or advancement of expenses and costs under this Section 27, shall not limit or restrict in any way the power of the Corporation to indemnify or advance expenses and costs to such indemnitee in any other way permitted by law or be deemed exclusive of, or invalidate, any right to which any indemnitee seeking indemnification or advancement of expenses and costs may be entitled under any law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such indemnitee’s capacity as an officer, director, employee or agent of the Corporation and as to action in any other capacity.
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(e) Corporate Obligations; Reliance. The rights granted pursuant to the provisions of this Section 27 shall vest at the time a person becomes a director or officer of the Corporation and shall be deemed to create a binding contractual obligation on the part of the Corporation to the persons who from time to time are elected as officers or directors of the Corporation, and such persons in acting in their capacities as officers or directors of the Corporation or any subsidiary shall be entitled to rely on such provisions of this Section 27 without giving notice thereof to the Corporation. Such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Section 27 that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.
(f) Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
(g) Indemnification of Employees and Agents of the Corporation and Others. The Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any person (in addition to an indemnitee) serving at the request of the Corporation as an officer, director, employee or agent of any other enterprise to the fullest extent of the provisions of this Section 27 with respect to the indemnification and advancement of expenses of indemnitees hereunder.
NOTICES
28. Generally.
(a) Form of Notices. Except as otherwise provided by law, these Bylaws, or the Certificate of Incorporation, whenever by law or under the provisions of the Certificate of Incorporation or these Bylaws notice is required to be given to any director or stockholder, it will not be construed to require personal notice, but such notice may be given in writing, by mail or courier service or, to the extent permitted by the DGCL, by electronic transmission, addressed to such director or stockholder. Any notice sent to stockholders by mail or courier service shall be sent to the address of such stockholder as it appears on the records of the Corporation, with postage thereon prepaid, and such notice will be deemed to be given at the time when the same is deposited in the United States mail or with the courier service. Notices sent by electronic transmission shall be deemed effective as set forth in Section 232 of the DGCL. For purposes of this Section 28, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
(b) Notices to Directors. Notices to directors may be given by mail or courier service, telephone, electronic transmission or as otherwise may be permitted by these Bylaws.
29. Waivers. Whenever any notice is required to be given by law or under the provisions of the Certificate of Incorporation or these Bylaws, a waiver thereof in writing, signed by the person entitled to such notice, or a waiver by electronic transmission by the person entitled to such notice, whether before or after the time of the event for which notice is to be given, will be deemed equivalent to such notice. Attendance of a person at a meeting will constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
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OFFICERS
30. Generally.
(a) The officers of the Corporation will be elected by the Board and will consist of officers with titles and duties as determined by the Board, but in any case shall include a Chief Executive Officer (which may be the President), a President, a Treasurer and a Secretary, all of whom shall be elected at the annual meeting of the Board. The Board may also choose one or more Vice Presidents (who may be given particular designations with respect to authority, function, or seniority), one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as the Board may from time to time determine. Notwithstanding the foregoing, the Board may authorize the Chief Executive Officer to appoint any person to any office other than the Secretary or Treasurer. Any number of offices may be held by the same person. Any of the offices may be left vacant from time to time as the Board may determine. In the case of the absence or disability of any officer of the Corporation or for any other reason deemed sufficient by a majority of the Board, the Board may delegate the absent or disabled officer’s powers or duties to any other officer or to any director.
(b) Chief Executive Officer. Unless the Board has designated another person as the Corporation’s Chief Executive Officer, the President shall be the Chief Executive Officer of the Corporation. The Chief Executive Officer shall have general charge and supervision of the business of the Corporation subject to the direction of the Board and shall perform all duties and have all powers that are commonly incident to the office of chief executive or that are delegated to such officer by the Board. The Chief Executive Officer may sign bonds, mortgages, certificates for shares and all other contracts and documents whether or not under the seal of the Corporation except in cases where the signing and execution thereof shall be expressly delegated by law, by the Board or by these Bylaws to some other officer or agent of the Corporation.
(c) President. In the absence of the Chief Executive Officer or in the event of his inability or refusal to act, the President shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer. At all other times the President shall have the active management of the business of the Corporation under the general supervision of the Chief Executive Officer or the Board of Directors. The President shall have concurrent power with the Chief Executive Officer to sign bonds, mortgages, certificates for shares and other contracts and documents, whether or not under the seal of the Corporation except in cases where the signing and execution thereof shall be expressly delegated by law, by the Board, or by these Bylaws to some other officer or agent of the Corporation. In general, the President shall perform all duties incident to the office of president and such other duties as the Chief Executive Officer (if the President is not the Chief Executive Officer) or the Board may from time to time prescribe.
(d) Vice Presidents. Each Vice President shall have such powers and perform such duties as may be assigned to him or her from time to time by the Board or the Chief Executive Officer (or the President if there is no Chief Executive Officer). The Board may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board.
(e) Secretary; Assistant Secretary. The Secretary, or an Assistant Secretary, shall attend all sessions of the Board and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for committees when required. He or she shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board, and shall perform such other duties as may be assigned by the Board. The Secretary, or an Assistant Secretary, shall keep in safe custody the seal of the Corporation and have authority to affix the seal to all documents requiring it and attest to the same.
14
(f) Treasurer; Assistant Treasurer. The Treasurer, or an Assistant Treasurer, shall have the custody of the corporate funds and other property of the Corporation, except as otherwise provided by the Board, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. The Treasurer, or an Assistant Treasurer, shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and whenever requested by the Board, shall render an account of all his or her transactions as treasurer and of the financial condition of the Corporation, and shall perform such other duties as may be assigned by the Board.
(g) Delegation of Authority. The Board may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding the provisions herein.
(h) Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chief Executive Officer, the President, any Vice President or any other officer authorized to do so by the Board and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any company in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board may, by resolution, from time to time confer like powers upon any other person or persons.
31. Compensation. The compensation of all executive officers of the Corporation will be fixed by the Board or by a committee of the Board. The Board may fix or delegate the power to fix, the compensation of other officers and agents of the Corporation to an officer of the Corporation.
32. Succession. The officers of the Corporation will hold office until their successors are elected and qualified or until such officer’s earlier death, resignation or removal. Any officer may be removed at any time by the Board. Any vacancy occurring in any office of the Corporation may be filled by the Board or may, in the Board’s discretion, be left unfilled for such period as the Board may determine other than the offices of Chief Executive Officer, President, Treasurer and Secretary. Any officer of the Corporation may resign at any time by giving written notice of his or her resignation to the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon receipt unless such notice provides that the resignation is effective at some later time or upon the occurrence of some later event.
33. Authority and Duties. Each of the officers of the Corporation will have such authority and will perform such duties as are customarily incident to their respective offices or as may be specified from time to time by the Board.
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STOCK
34. Certificates. The Board may provide by resolution or resolutions that some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares. Certificates, if any, representing shares of stock of the Corporation will be in such form as is determined by the Board, subject to applicable legal requirements. Each such certificate shall be numbered and shall be signed by, or in the name of the Corporation by, the Chairperson, if any, or the President or the Chief Executive Officer or the Chief Financial Officer, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary. Any or all of the signatures on a certificate may be a facsimile or electronic signature. In case any officer, transfer agent or registrar who has signed or whose facsimile or electronic signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.
35. Lost, Stolen or Destroyed Certificates. The Secretary may direct a new certificate or certificates or uncertificated shares to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact, satisfactory to the Secretary, by the person claiming the certificate of stock to be lost, stolen or destroyed. As a condition precedent to the issuance of a new certificate or certificates, the Secretary may require the owners of such lost, stolen or destroyed certificate or certificates to give the Corporation a bond in such sum and with such surety or sureties as the Secretary may direct as indemnity against any claims that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of the new certificate or uncertificated shares.
36. Transfers. Shares of stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of shares shall be made (a) upon the books of the Corporation only by the holder of record thereof, or by a duly authorized agent, transferee or legal representative and (b) in the case of certificated shares, upon the surrender to the Corporation of the certificate or certificates for such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the Corporation or is transfer agent may reasonably require. No transfer shall be made that is inconsistent with the provisions of applicable law.
GENERAL
37. Fiscal Year. The fiscal year of the Corporation will end on December 31 of each calendar year or such other date as may be fixed from time to time by the Board.
38. Reliance upon Books, Reports and Records. Each director, each member of a committee designated by the Board, and each officer of the Corporation will, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports, or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board, or by any other person or entity as to matters the director, committee member, or officer believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
39. Amendments. Notwithstanding any other provision of these Bylaws, any alteration, amendment or repeal of these Bylaws, or the adoption of new Bylaws, shall require the approval of the Board or the stockholders of the Corporation as provided by the Certificate of Incorporation (including any applicable Preferred Stock Designation) and applicable law.
40. Severability. If any provision of these Bylaws shall be held to be invalid, illegal, unenforceable or in conflict with the provisions of the Certificate of Incorporation, then such provision shall nonetheless be enforced to the maximum extent possible consistent with such holding and the remaining provisions of these Bylaws (including without limitation, all portions of any section of these Bylaws containing any such provision held to be invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation, that are not themselves invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation) shall remain in full force and effect.
41. Certain Defined Terms. Capitalized terms used herein and not otherwise defined have the meanings given to them in the Certificate of Incorporation. The use of the term “days” within these Bylaws, other than when referred to as “business days”, shall mean calendar days. The use of “business days” shall mean days other than Saturday, Sunday, and any day designated as a federal holiday as observed by the SEC. The use of “including” shall mean, including without limitation.
16
Exhibit 3.4
FIRST AMENDMENT
TO THE
BYLAWS
OF
TERRESTRIAL ENERGY INC.
(formerly HCM II Acquisition Corp.)
This FIRST AMENDMENT (this “Amendment”) to the Bylaws of Terrestrial Energy Inc., a Delaware corporation formerly known as “HCM II Acquisition Corp.” (the “Corporation”), is adopted and effective as of October 28, 2025 pursuant to Section 39 of the Bylaws of the Corporation and the General Corporation Law of the State of Delaware.
WHEREAS, the Corporation has changed its name to “Terrestrial Energy Inc.” effective as of the date hereof pursuant to the filing of a Certificate of Amendment to the Corporation’s Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Name Change”).
NOW, THEREFORE, the Bylaws of the Corporation shall be amended as follows:
| 1. | All references in the Bylaws of the Corporation shall be deleted<br>in their entirety and replaced with references to “Terrestrial Energy Inc.” |
|---|---|
| 2. | The remainder of the Bylaws of the Corporation shall remain<br>as is and in full force and effect. |
| --- | --- |
The undersigned hereby certifies that the foregoing amendment to the Bylaws of the Corporation was adopted and approved by the board of directors of the Corporation by unanimous written consent.
Adopted and effective as of October 28, 2025.
| /s/ Steve Millsap | |
|---|---|
| Name: | Steve<br> Millsap |
| Title: | Secretary |
Exhibit 10.1
AMENDED AND RESTATED WARRANT AGREEMENT
THIS AMENDED AND RESTATEDWARRANT AGREEMENT (this “Agreement”), dated as of October 28, 2025, is by and between HCM II Acquisition Corp., a Delaware corporation (and after the effectiveness of the name change, Terrestrial Energy Inc., a Delaware corporation) (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (in such capacity, the “WarrantAgent,” and also referred to herein as the “Transfer Agent”), and amends and restates in its entirety that certain Warrant Agreement, dated as of August 19, 2024 (“Prior Agreement”), by and between HCM II Acquisition Corp., a Cayman Islands exempted company (“HCM II”), and Warrant Agent pursuant to Section 9.8 of the Prior Agreement, this Agreement shall be effective as of the closing of the Business Combination (as defined below) (such date, the “EffectiveDate”).
WHEREAS, HCM II and the Warrant Agent previously entered into the Prior Agreement in connection with HCM II’s initial public offering (the “Offering”) of units of HCM II’s equity securities, each such unit comprised of one Class A ordinary share of HCM II, par value $0.0001 per share (“Class A Shares”) and one-half of one Public Warrant (as defined below) (the “Units”) and, in connection therewith, HCM II had issued and delivered 11,500,000 warrants to public investors in the Offering (the “PublicWarrants”);
WHEREAS, HCM II entered into that certain Sponsor Private Placement Warrants Purchase Agreement with HCM Investor Holdings II, LLC, a Cayman Islands limited liability company (the “Sponsor”), pursuant to which the Sponsor agreed to purchase an aggregate of 4,275,000 private placement warrants (including if the Over-allotment Option is exercised in full) simultaneously with the closing of the Offering (the “Sponsor Private Placement Warrants”), each bearing the legend set forth in Exhibit A hereto at a purchase price of $1.00 per Sponsor Private Placement Warrant;
WHEREAS, HCM II entered into that certain Underwriter Private Placement Warrants Purchase Agreement with Cantor Fitzgerald & Co., Inc., a New York limited liability company (the “Lead Underwriter”), pursuant to which the Lead Underwriter agreed to purchase an aggregate of 2,000,000 private placement warrants simultaneously with the closing of the Offering (the “Lead Underwriter Private PlacementWarrants” and, together with the Sponsor Private Placement Warrants, the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”), each bearing the legend set forth in Exhibit A hereto at a purchase price of $1.00 per Lead Underwriter Private Placement Warrant;
WHEREAS, HCM II entered into a Business Combination Agreement, dated March 26, 2025 (as amended, modified or supplemented, the “Business CombinationAgreement” and the transactions contemplated by the Transaction Agreement, the “Business Combination”), by and among HCM II, Terrestrial Energy Inc., a Delaware corporation (referred to herein prior to the Business Combination as “TerrestrialEnergy”, and, subsequent to the Business Combination, as “Terrestrial Energy Opco”) and HCM II Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of HCM II (“Merger Sub”), pursuant to which, (1) at the closing of the transactions contemplated by the Business Combination Agreement (as defined below) (the “Closing”) and following the Domestication (as defined below), Merger Sub will merge with and into Terrestrial Energy (the “Merger”), with Terrestrial Energy surviving as a wholly-owned subsidiary of HCM II, pursuant to the terms and subject to the conditions set forth in the Business Combination Agreement, resulting in a combined company whereby HCM II will become the sole stockholder of Terrestrial Energy Opco, and substantially all of the assets and the business of the combined company will be held and operated by Terrestrial Energy Opco and its subsidiaries; (2) HCM II will domesticate (the “Domestication”) as a Delaware corporation (following the Domestication, the Company) in accordance with the Delaware General Corporation Law (“DGCL”), the Companies Act (as revised) of the Cayman Islands (the “Companies Act”) and the amended and restated memorandum and articles of association of HCM II (as may be amended from time to time, the “Cayman Constitutional Documents”), (3) the other transactions contemplated by the Business Combination Agreement and documents related thereto will be consummated and (4) effective immediately following the consummation of the Business Combination, the Company will be renamed “Terrestrial Energy Inc.”;
WHEREAS, as a result of the Merger, each of the then issued and outstanding warrants representing the right to purchase one HCM II Class A Ordinary Share shall convert automatically into a warrant to acquire one (1) share of the Company;
WHEREAS, the Company has filed a registration statement on Form S-4 (File No. 333-288735) (the “Registration Statement”) to register the Warrants being assumed by the Company as a result of the Merger, the terms of the Prior Agreement and this Agreement and the shares of common stock of the Company, par value $0.0001 per share (“Common Stock”) issuable upon exercise thereof;
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants;
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
| 1. | Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement. |
|---|---|
| 2. | Warrants. |
| --- | --- |
| 2.1 | Form of Warrant. Each Warrant shall be issued in registered form only, and, if a physical certificate is issued, shall be in substantially the form of Exhibit B hereto, the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the Chairperson of the Company’s board of directors (the “Board”), President, Chief Executive Officer, Chief Financial Officer, Secretary or other principal officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance. All of the Public Warrants shall initially be represented by one or more book-entry certificates (each, a “Book-Entry Warrant Certificate”). |
| --- | --- |
| 2.2 | Effect of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant certificate shall be invalid and of no effect and may not be exercised by the holder thereof. |
| --- | --- |
| 2.3 | Registration. |
| --- | --- |
| 2.3.1 | Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”) for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. All of the Public Warrants shall initially be represented by one or more Book-Entry Warrant Certificates deposited with The Depository Trust Company (the “Depositary”) and registered in the name of Cede & Co., a nominee of the Depositary. Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depositary or its nominee for each Book- Entry Warrant Certificate, or (ii) institutions that have accounts with the Depositary (each such institution, with respect to a Warrant in its account, a “Participant”). |
| --- | --- |
2
If the Depositary subsequently ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants (“Definitive Warrant Certificate”). Such Definitive Warrant Certificate shall be in the form annexed hereto as Exhibit B, with appropriate insertions, modifications and omissions, as provided above.
| 2.3.2 | Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”) as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on a Definitive Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. |
|---|---|
| 2.4 | [RESERVED] |
| --- | --- |
| 2.5 | [RESERVED] |
| --- | --- |
| 2.6 | Private Placement Warrants. The Private Placement Warrants shall be identical to the Public Warrants, except that until the date that is thirty (30) days after the completion by the Company of the Business Combination the Private Placement Warrants may not be transferred, assigned or sold by the holders thereof, other than: |
| --- | --- |
| 2.6.1 | to the Company’s or Lead Underwriter’s officers or directors, any affiliate or family member of any of the Company’s or Lead Underwriter’s officers or directors, any members or partners of the Sponsor or their affiliates, any affiliates of the Sponsor, the Lead Underwriter or any employees of such affiliates; |
| --- | --- |
| 2.6.2 | in the case of an individual, by gift to a member of such individual’s immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate family, an affiliate of such individual or to a charitable organization; |
| --- | --- |
| 2.6.3 | in the case of an individual, by virtue of the laws of descent and distribution upon death of such person; |
| --- | --- |
| 2.6.4 | in the case of an individual, pursuant to a qualified domestic relations order; |
| --- | --- |
| 2.6.5 | by private sales or transfers made in connection with any forward purchase agreement or similar arrangement, or in connection with the consummation of the Business Combination at prices no greater than the price at which the Warrants were originally purchased; |
| --- | --- |
| 2.6.6 | by pro rata distributions from the Sponsor or Lead Underwriter. to its respective members, partners or stockholders pursuant to the Sponsor’s or Lead Underwriter’s limited liability company agreement or other charter documents; |
| --- | --- |
| 2.6.7 | by virtue of the laws of the State of Delaware or the limited liability company agreement of the Sponsor upon dissolution of the Sponsor or upon dissolution of the Lead Underwriter; |
| --- | --- |
| 2.6.8 | [RESERVED]; |
| --- | --- |
| 2.6.9 | to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses 2.6.1 through 2.6.7 above; |
| --- | --- |
| 2.6.10 | [RESERVED]; and |
| --- | --- |
3
| 2.6.11 | in the event that, subsequent to the consummation of the Business Combination, the Company completes a liquidation, merger, share exchange or other similar transaction which results in all of its stockholders having the right to exchange their Common Stock for cash, securities or other property; provided, however, that, in the case of clauses 2.6.1 through 2.6.7, and 2.6.9 these transferees (the “Permitted Transferees”) enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement and the other restrictions contained in the letter agreement, dated as of the date hereof, by and among the Company, the Sponsor, the Lead Underwriter and the Company’s officers and directors. |
|---|---|
| 2.7 | [RESERVED] |
| --- | --- |
| 3. | Terms and Exercise of Warrants. |
| --- | --- |
| 3.1 | Warrant Price. Each Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, including without limitation, subsection 3.3.5, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $11.50 per share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price” as used in this Agreement shall mean the price per share (including in cash or by payment of Warrants pursuant to a “cashless exercise,” to the extent permitted hereunder) described in the prior sentence at which the shares of Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) business days (unless otherwise required by the Commission, any national securities exchange on which the Warrants are listed or applicable law), provided, that the Company shall provide at least three (3) days’ prior written notice of such reduction to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants. |
| --- | --- |
| 3.2 | Duration of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) (A) commencing on the date that is thirty (30) days after the first date on which the Company completes a Business Combination, and terminating on the earliest to occur of: (x) 5:00 p.m., New York City time on the date that is five (5) years after the Effective Date, (y) the liquidation of the Company, and (z) with respect to a redemption pursuant to Section 6.1 hereof, 5:00 p.m., New York City time on the Redemption Date (as defined below) as provided in Section 6.2 hereof (the “Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below, with respect to an effective registration statement or a valid exemption therefrom being available. Each outstanding Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, that the Company shall provide at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such extension shall be identical in duration among all the Warrants. |
| --- | --- |
| 3.3 | Exercise of Warrants. |
| 3.3.1 | Payment. Subject to the provisions of the Warrant and this Agreement, including without limitation, subsection 3.3.5, a Warrant may be exercised by the Registered Holder thereof by delivering to the Warrant Agent at its corporate trust department (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate, the Warrants to be exercised (the “Book-Entry Warrants”) on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant Agent to the Depositary from time to time, (ii) an election to purchase (“Election to Purchase”) shares of Common Stock pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the Definitive Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly delivered by the Participant in accordance with the Depositary’s procedures, and (iii) payment in full of the Warrant Price for each share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the shares of Common Stock and the issuance of such shares of Common Stock, as follows: |
| --- | --- |
| (a) | in lawful money of the United States, in good bank draft or good certified check payable to the order of the Warrant Agent or by wire transfer of immediately available funds; |
| --- | --- |
4
| (b) | in the event of a redemption pursuant to Section 6 hereof in which the Company’s board of directors (the “Board”) has elected to require all holders of the Warrants to exercise such Warrants on a “cashless basis,” by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the excess of the “Fair Market Value”, as defined in this subsection 3.3.1(b), over the Warrant Price by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(b) and Section 6.3, the “Fair Market Value” shall mean the average reported closing price of the shares of Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of the Warrants, pursuant to Section 6 hereof; or |
|---|---|
| (c) | on a cashless basis as provided in Section 7.4 hereof. |
| --- | --- |
| 3.3.2 | Issuance of Shares of Common Stock on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant a book-entry position or certificate, as applicable, for the number of full shares of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new book-entry position or countersigned Warrant, as applicable, for the number of shares of Common Stock as to which such Warrant shall not have been exercised. If fewer than all the Warrants evidenced by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the records maintained by the Depositary, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the Warrants remaining after such exercise. Notwithstanding the foregoing, the Company shall not be obligated to deliver any shares of Common Stock pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) with respect to the shares of Common Stock underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying its obligations under Section 7.4 or a valid exemption from registration is available. No Warrant shall be exercisable and the Company shall not be obligated to issue shares of Common Stock upon exercise of a Warrant unless the Common Stock issuable upon such Warrant exercise have been registered, qualified or deemed to be exempt from registration or qualification under the securities laws of the state of residence of the Registered Holder of the Warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant shall not be entitled to exercise such Warrant. In no event will the Company be required to net cash settle the Warrant exercise. The Company may require holders of Public Warrants to settle the Warrant on a “cashless basis” pursuant to Section 7.4. If, by reason of any exercise of Warrants on a “cashless basis,” the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share of Common Stock, the Company shall round down to the nearest whole number, the number of shares of Common Stock to be issued to such holder. |
| --- | --- |
| 3.3.3 | Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and non- assessable. |
| --- | --- |
| 3.3.4 | Date of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares of Common Stock on the date on which the Warrant, or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date when the share transfer books of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder of such shares of Common Stock at the close of business on the next succeeding date on which the share transfer books or book-entry system are open. |
| --- | --- |
5
| 3.3.5 | Maximum Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates) or any “group” of which the holder or its affiliate is a member, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify)(the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such person and its affiliates, or any group of which such person and its affiliates is a member, shall include the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates, or any group of which any such person or its affiliates is a member, and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates, or any group of which such person or its affiliates is a member (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the applicable regulations of the Commission. For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Commission, and the percentage held by the holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. To the extent that a holder makes the election described in this subsection 3.3.5, the Warrant Agent shall not effect the exercise of the holder’s Warrant, and such holder shall not have the right to exercise such Warrant unless it provides to the Warrant Agent in its Election to Purchase, a certification that, upon after giving effect to such exercise, such person (together with such person’s affiliates) or any “group” of which such holder or its affiliates is a member, would not beneficially own in excess of the Maximum Percentage of the Common Stock outstanding immediately after giving effect to such exercise as determined in accordance with this subsection 3.3.5. For purposes of the Warrant, in determining the number of outstanding shares of Common Stock, the holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the U.S. Securities and Exchange Commission (the “Commission”) as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company shall, within two (2) business days, confirm orally and in writing to such holder the number of shares of Common<br>Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company. |
|---|---|
| 4. | Adjustments. |
| --- | --- |
| 4.1 | Stock Dividends. |
| --- | --- |
| 4.1.1 | Split-Ups. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the outstanding shares of Common Stock. A rights offering to holders of the Common Stock entitling holders to purchase shares of Common Stock at a price less than the “Fair Market Value” (as defined below) shall be deemed a stock dividend of a number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for the Common Stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of Common Stock paid in such rights offering and divided by (y) the Fair Market Value. For purposes of this subsection 4.1.1, (i) if the rights offering is for securities convertible into or exercisable for Common Stock, in determining the price payable for Common Stock, there shall be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “Fair Market Value” means the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.. |
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6
| 4.1.2 | Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to all or substantially all of the holders of shares of Common Stock on account of such shares of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, or (b) Ordinary Cash Dividends (as defined below) (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Board, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2, “Ordinary Cash Dividends” means any cash dividend or cash distribution which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Common Stock during the 365-day period ending on the date of declaration of such dividend or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of shares of Common Stock issuable on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the Units in the Offering) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50. Solely for purposes of illustration, if the Company, at a time while the Warrants are outstanding and unexpired, pays a cash dividend of $0.35 and previously paid an aggregate of $0.40 of cash dividends and cash distributions on the Common Stock during the 365-day period ending on the date of declaration of such $0.35 dividend, then the Warrant Price will be decreased, effectively immediately after the effective date of such $0.35 dividend, by $0.25 (the absolute value of the difference between $0.75 (the aggregate amount of all cash dividends and cash distributions paid or made in such 365-day period, including such $0.35 dividend) and $0.50 (the greater of (x) $0.50 and (y) the aggregate amount of all cash dividends and cash distributions paid or made in such 365-day period prior to such $0.35 dividend)). |
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| 4.2 | Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock. |
| --- | --- |
| 4.3 | Adjustments in Warrant Price. |
| --- | --- |
| 4.3.1 | Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter. |
| --- | --- |
| 4.3.2 | [RESERVED] |
7
| 4.4 | Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by subsections 4.1.1, 4.1.2 or Section 4.2 hereof or that solely affects the par value of such Common Stock), or in the case of any merger or consolidation of the Company with or into another entity or conversion of the Company as another entity (other than a consolidation or merger in which the Company is the continuing corporation and is not a subsidiary of another entity whose stockholders did not own all or substantially all of the Common Stock of the Company in substantially the same proportions immediately before such transaction and that does not result in any reclassification or reorganization of the outstanding Common Stock), or in the case of any sale or conveyance to another entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the “Alternative Issuance”); provided, however, that (i) if the holders of the shares of Common Stock were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of the shares of Common Stock in such consolidation or merger that affirmatively make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the shares of Common Stock under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act (or any successor rule)) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act (or any successor rule)) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act (or any successor rule)) more than 65% of the voting power of the Company’s outstanding equity securities (including with respect to the election of directors), the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the weighted average of the amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and participated in such tender or exchange offer on a pro rata basis with all other holders of Common Stock, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided further that if less than 70% of the consideration receivable by the holders of the Common Stock in the applicable event is payable in the form of capital stock or shares in the successor entity that is listed for trading on a national securities exchange<br>or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant to a Current Report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference (but in no event less than zero) of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value” means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes model as calculated by an accounting, appraisal, investment banking firm or consultant of nationally recognized standing that is, in the good faith judgment of the Board, qualified to make such calculation. “Per Share Consideration” means (i) if the consideration paid to holders of the Common Stock consists exclusively of cash, the amount of such cash per share of Common Stock, and (ii) in all other cases, the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event. If any reclassification or reorganization also results in a change in shares of Common Stock covered by subsection 4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced to less than the par value per share issuable upon exercise of the Warrant. |
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| 4.5 | Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares of Common Stock issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, the Company shall give written notice of the occurrence of such event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event. |
8
| 4.6 | No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares of Common Stock upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to such holder. |
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| 4.7 | Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares of Common Stock as is stated in the Warrants initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed. |
| --- | --- |
| 4.8 | Other Events. In case any event shall occur affecting the Company as to which none of the provisions of the preceding subsections of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment. The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion. For the avoidance of doubt, all adjustments made pursuant to this Section 4.8 shall be made equally to all outstanding Warrants. |
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| 4.9 | [RESERVED] |
| --- | --- |
| 5. | Transfer and Exchange of Warrants. |
| 5.1 | Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, in the case of a certificated Warrant, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case of certificated Warrants, the Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request. |
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9
| 5.2 | Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book- Entry Warrant Certificate or Definitive Warrant Certificate, each Book-Entry Warrant Certificate and Definitive Warrant Certificate may be transferred only in whole and only to the Depositary, to another nominee of the Depositary, to a successor depository, or to a nominee of a successor depository; provided further, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend. |
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| 5.3 | Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance of a warrant certificate or book-entry position for a fraction of a warrant, except as part of the Units. |
| --- | --- |
| 5.4 | Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants. |
| --- | --- |
| 5.5 | Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose. |
| --- | --- |
| 5.6 | [RESERVED]. |
| --- | --- |
| 6. | Redemption. |
| 6.1 | Redemption of Warrants for Cash. All, but not less than all, of the outstanding Warrants may be redeemed (in whole and not in part), at the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.2 below, at a Redemption Price (as defined below) of $0.01 per Warrant; provided that (a) the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof) and (b) there is an effective registration statement covering the shares of Common Stock issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the Measurement Period and the 30-day Redemption Period (each as defined in Section 6.2 below). |
| --- | --- |
| 6.2 | Date Fixed for, and Notice of, Redemption; Redemption Price; Reference Value. In the event that the Company elects to redeem the Warrants pursuant to Section 6.1, the Company shall fix a date for the redemption (the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the Redemption Date (such period, the “Redemption Period”) to the Registered Holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered Holder received such notice. |
| --- | --- |
| 6.3 | Exercise After Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with Section 3 of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the Redemption Date. In the event the Company determines to require all holders of Warrants to exercise their Warrants on a “cashless basis” pursuant to subsection 3.3.1(b), the notice of redemption will contain the information necessary to calculate the number of shares of Common Stock to be received upon exercise of the Warrants, including the “Fair Market Value” (as such term is defined in subsection 3.3.1(b) hereof) in such case. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price. |
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10
| 7. | Other Provisions Relating to Rights of Holders of Warrants. |
|---|---|
| 7.1 | No Rights as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter. |
| --- | --- |
| 7.2 | Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone. |
| --- | --- |
| 7.3 | Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement. |
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| 7.4 | Registration of Common Stock; Cashless Exercise at Company’s Option. |
| --- | --- |
| 7.4.1 | Registration of the Common Stock. The Company agrees that as soon as practicable, but in no event later than twenty (20) business<br>days after the Effective Date, it shall use its commercially reasonable efforts to file with the Commission a post-effective amendment<br>to the Registration Statement, or a new registration statement registering, under the Securities Act, the issuance of the shares of Common<br>Stock issuable upon exercise of the Warrants. The Company shall use its commercially reasonable efforts to cause the same to become effective<br>and to maintain the effectiveness of such post-effective amendment or registration statement, and a current prospectus relating thereto,<br>until the expiration or redemption of the Warrants in accordance with the provisions of this Agreement. If any such post-effective or<br>registration statement has not been declared effective by the sixtieth (60th) business day following the Effective Date, holders of the<br>Warrants shall have the right, during the period beginning on the sixty-first (61st) business day after the Effective Date and ending<br>upon such post-effective amendment or registration statement being declared effective by the Commission, and during any other period when<br>the Company shall fail to have maintained an effective registration statement covering the shares of Common Stock issuable upon exercise<br>of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging the Warrants (in accordance with Section 3(a)(9)<br>of the Securities Act (or any successor rule) or another exemption) for that number of shares of Common Stock equal to the quotient obtained<br>by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the excess of the “Fair<br>Market Value” (as defined below) over the Warrant Price by (y) the Fair Market Value. Solely for purposes of this subsection 7.4.1,<br>“Fair Market Value” shall mean the average reported closing price of the shares of Common Stock as reported during the ten<br>(10) trading day period ending on the third (3rd) trading day prior to the date that notice of exercise is received by the Warrant Agent<br>from the holder of such Warrants or its securities broker or intermediary. The date that notice of “cashless exercise” is<br>received by the Warrant Agent shall be conclusively determined by the Warrant Agent. In connection with the “cashless exercise”<br>of a Public Warrant, the Company shall, upon request, provide the Warrant Agent with an opinion of counsel for the Company (which shall<br>be an outside law firm with securities law experience) stating that (i) the exercise of the Warrants on a “cashless basis”<br>in accordance with this subsection 7.4.1 is not required to be registered under the Securities Act and (ii) the shares of Common Stock<br>issued upon such exercise shall be freely tradable under United States federal securities laws by anyone who is not an affiliate (as such<br>term is defined in Rule 144 under the Securities Act (or any successor rule)) of the Company and, accordingly, shall not be required to<br>bear a restrictive legend. Except as provided in subsection 7.4.2, for the avoidance of any doubt, unless and until all of the Warrants<br>have been exercised or have expired, the Company shall continue to be obligated to comply with its registration obligations under the<br>first three sentences of this subsection 7.4.1. |
| --- | --- |
| 7.4.2 | Cashless Exercise at Company’s Option. If the shares of Common Stock are at the time of any exercise of a Warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act (or any successor rule), the Company may, at its option, require holders of Public Warrants who exercise their Warrants to exercise such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act (or any successor rule) as described in subsection 7.4.1 and (i) in the event the Company so elects, the Company shall not be required to file or maintain in effect a registration statement for the registration, under the Securities Act, of the shares of Common Stock issuable upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary or (ii) if the Company does not so file or maintain such registration statement, the Company agrees to use its commercially reasonable efforts to register or qualify for sale the Common Stock issuable upon exercise of the Public Warrants under the applicable blue sky laws of the state of residence of the exercising Public Warrant holder to the extent an exemption is not available. |
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| 8. | Concerning the Warrant Agent and Other Matters. |
|---|---|
| 8.1 | Payment of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares of Common Stock. |
| --- | --- |
| 8.2 | Resignation, Consolidation, or Merger of Warrant Agent. |
| --- | --- |
| 8.2.1 | Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation or other entity organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations. |
| --- | --- |
| 8.2.2 | Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the Transfer Agent for the shares of Common Stock not later than the effective date of any such appointment. |
| --- | --- |
| 8.2.3 | Merger or Consolidation of Warrant Agent. Any entity into which the Warrant Agent may be merged or with which it may be consolidated or any entity resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act. |
| --- | --- |
| 8.3 | Fees and Expenses of Warrant Agent. |
| --- | --- |
| 8.3.1 | Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder. |
| --- | --- |
| 8.3.2 | Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement. |
| --- | --- |
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| 8.4 | Liability of Warrant Agent. |
|---|---|
| 8.4.1 | Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, President, Executive Vice President, Vice President, Secretary or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement. |
| --- | --- |
| 8.4.2 | Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct, fraud or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, out of pocket costs and reasonable outside counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agent’s gross negligence, willful misconduct, fraud or bad faith. |
| 8.4.3 | Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock shall, when issued, be valid and fully paid and non-assessable. |
| --- | --- |
| 8.5 | Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of the Warrants. |
| --- | --- |
| 8.6 | [RESERVED].. |
| --- | --- |
| 9. | Miscellaneous Provisions. |
| --- | --- |
| 9.1 | Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns. |
| --- | --- |
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| 9.2 | Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows: |
|---|
HCM II Acquisition Corp.
100 First Stamford Place, Suite 330
Stamford, CT 06902
Attention: Shawn Matthews, Chairman and Chief Executive Officer
Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
in each case, with copies to:
King & Spalding LLP
1185 Avenue of the Americas,
34th Floor
New York, New York 10036
Attn: Kevin E. Manz, Esq.
Telephone: (212) 556-2100
and
Cantor Fitzgerald & Co., Inc.
499 Park Avenue
New York, NY 10022
Telephone: (212) 938-5000
| 9.3 | Applicable Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum provisions in this Section 9.3. If any action, the subject matter of which is within the scope the forum provisions above, is filed in a court other than a court located within the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any warrant holder, such warrant holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of New York or the United States District Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder. |
|---|
14
| 9.4 | Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person, corporation or other entity other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants. |
|---|---|
| 9.5 | Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to submit such holder’s Warrant for inspection by the Warrant Agent. |
| --- | --- |
| 9.6 | Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. |
| --- | --- |
| 9.7 | Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof. |
| --- | --- |
| 9.8 | Amendments. This Agreement may be amended by the parties<br>hereto without the consent of any Registered Holder (i) for the purpose of (x) curing any ambiguity or to correct any defective provision<br>contained herein, (y) adjusting the definition of “Ordinary Cash Dividend” as contemplated by and in accordance with the<br>second sentence of subsection 4.1.2 or (z) adding or changing any other provisions with respect to matters or questions arising under<br>this Agreement as the Company may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the<br>Registered Holders, and (ii) to provide for the delivery of an Alternative Issuance pursuant to Section 4.4. All other modifications<br>or amendments, including any modification or amendment to increase the Warrant Price or shorten the Exercise Period shall require the<br>vote or written consent of the Registered Holders of 50% of the number of the then outstanding Public Warrants and, solely with respect<br>to any amendment to the terms of the Private Placement Warrants or any provision of this Agreement with respect to the Private Placement<br>Warrants (including, for the avoidance of doubt, the forfeiture or cancellation of any Private Placement), 50% of the number of then<br>outstanding Private Placement Warrants (including the vote or written consent of the Lead Underwriter). Notwithstanding the foregoing,<br>the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively,<br>without the consent of the Registered Holders. |
| --- | --- |
| 9.9 | Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable. |
| --- | --- |
[Signature Page Follows]
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
| HCM II Acquisition Corp. | |
|---|---|
| By: | /s/<br> Shawn Matthews |
| Name: Shawn Matthews | |
| Title: Chief Executive Officer |
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent | |
|---|---|
| By: | /s/ Ana Gois |
| Name: Ana Gois | |
| Title: Vice President |
EXHIBIT A
PRIVATE PLACEMENT WARRANTS LEGEND
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE AGREEMENTS BY AND AMONG HCM II ACQUISITION CORP. (THE “COMPANY”), AND THE OTHER SIGNATORIES THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION 3 OF THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE AND COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.
Exhibit A-1
EXHIBIT B
[FORM OF WARRANT CERTIFICATE]
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISEDPRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDEDFOR IN THE WARRANT AGREEMENT DESCRIBED BELOW
TERRESTRIAL ENERGY INC.
Incorporated Under the Laws of the Stateof Delaware
CUSIP [ ]
Warrant Certificate
This Warrant Certificate certifies that [●] (the “Holder”), or registered assigns, is the registered holder of warrant(s) evidenced hereby (the **“Warrants”**and each, a “Warrant”) to purchase shares of common stock, $0.0001 par value per share (the “Common Stock”), of Terrestrial Energy Inc., a Delaware corporation (the “Company”). Each whole Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable shares of Common Stock as set forth below, at the exercise price (the “Warrant Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Warrant Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially exercisable for one fully paid and non-assessable share of Common Stock. No fractional shares will be issued upon exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share of Common Stock, the Company will, upon exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to the Warrant holder. The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
The initial Warrant Price per share of Common Stock for any Warrant is equal to $11.50 per share. The Warrant Price is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions, as set forth in the Warrant Agreement. In addition, and notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, to the extent that the holder of a Warrant has delivered a notice contemplated by subsection 3.5.5 of the Warrant Agreement, neither the Company nor the Warrant Agent shall issue to Holder, and Holder may not acquire, any right it might have to acquire, a number of shares of Common Stock upon exercise of any Warrant to the extent that, upon such exercise, the number of shares of Common Stock then beneficially owned by Holder would exceed the Maximum Percentage of Common Stock outstanding immediately after giving effect to such exercise as determined in accordance with subsection 3.3.5. of the Warrant Agreement.
Exhibit B-1
Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York.
| TERRESTRIAL ENERGY INC. | |
|---|---|
| By: | |
| Name: | |
| Title: |
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent | |
|---|---|
| By: | |
| Name: | |
| Title: |
Exhibit B-2
Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.
Exhibit B-4
Exhibit 10.2
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTIONAGREEMENT (the “Agreement”) is entered into as of October 28, 2025, by and between Terrestrial Energy Inc., a Delaware corporation (“TEI”) and HCM II Acquisition Corp., a Delaware corporation (“SPAC”). This Agreement shall be effective as of the closing of the Business Combination (as defined below) (such date, the “Effective Time”).
WHEREAS, TEI has previously entered in to a number of warrant agreements (the “Warrant Agreements”) governing the terms of TEI’s outstanding warrants (the “Warrants”) to purchase shares of common stock of TEI;
WHEREAS, TEI entered into a Business Combination Agreement, dated March 26, 2025 (as amended, modified or supplemented, the “Business Combination Agreement” and the transactions contemplated by the Business Combination Agreement, the “Business Combination”), by and among SPAC, TEI and HCM II Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of SPAC (“Merger Sub”), pursuant to which, among other things, Merger Sub will merge with and into TEI, with TEI surviving the merger as a direct wholly owned subsidiary of SPAC;
WHEREAS, the Business Combination is a “SPAC Transaction” and SPAC is a “Resulting Issuer”, in each case as contemplated by the Warrant Agreements;
WHEREAS, pursuant to the Business Combination Agreement and the Warrant Agreements, at the Effective Time SPAC will assume TEI’s rights and obligations under the Warrant Agreements;
WHEREAS, as a result of the foregoing, the parties hereto wish for TEI to assign to SPAC all of TEI’s rights and interests and obligations in and under the Warrant Agreements and for SPAC to accept such assignment, and assume all of TEI’s obligations thereunder, in each case, effective as of the Effective Time; and
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, the parties hereby agree as follows:
1. Assignmentand Assumption of Warrant Agreement. TEI hereby assigns, conveys, transfers and delivers, and SPAC hereby agrees to accept, assume and perform, effective as of the Effective Time, all of TEI’s rights, interests and obligations in, and under the Warrant Agreements. For avoidance of doubt, effective as of the Effective Time, each issued and outstanding Warrant of TEI immediately prior to the Effective Time, shall be automatically and irrevocably modified, to represent the right to acquire and receive, upon the exercise of such warrant and payment of the exercise price, on the same terms and conditions as nearly equivalent as may be practicable to the provisions set forth in the Warrant Agreement, 44.70293025 shares of Common Stock of the SPAC.
2. GoverningLaw. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State without resort to that State’s conflict-of-laws rules.
3. Counterpart. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by email or exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Agreement by such party.
4. Successorsand Assigns. All the covenants and provisions of this Agreement shall bind and inure to the benefit of each party’s respective successors and assigns.
5. NoModification to Warrant Agreements. All of the terms and provisions in the Warrant Agreements are and shall remain in full force and effect, on the terms and subject to the conditions set forth therein. This Agreement does not constitute, directly or by implication, an amendment or waiver of any provision of the Warrant Agreements, or any other right, remedy, power, or privilege of any party thereto, except as expressly contemplated by the Warrant Agreements in connection with a SPAC Transaction.
6. Effectiveness. This Agreement shall be effective as of the Effective Time. This Agreement shall automatically terminate and be null and void and of no effect if the Business Combination Agreement is terminated in accordance with its terms prior to the Effective Time.
[Signature Pages Follow]
-2-
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date and year first written above.
| Terrestrial Energy Inc. | ||
|---|---|---|
| By: | /s/ Simon Irish | |
| Name: | Simon Irish | |
| Title: | Chief Executive Officer | |
| HCM II Acquisition Corp. | ||
| By: | /s/ Shawn Matthews | |
| Name: | Shawn Matthews | |
| Title: | Chief Executive Officer |
-3-
Exhibit 10.3
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of October 28, 2025, is made and entered into by and among HCM II Acquisition Corp., a Delaware corporation which will change its name to “Terrestrial Energy Inc.” (formerly a Cayman Islands exempted company limited by shares, prior to the Domestication (as defined herein)) (the “Company”), Cantor Fitzgerald & Co., a New York general partnership (“Cantor”), HCM Investor Holdings II, LLC, a Cayman Islands limited liability company (the “Sponsor” , the members of the Sponsor identified on an Exhibit A joinder as a “Other Sponsor Holder” (such members, together with the Sponsor, the “Sponsor Holders”), and each such party, together with the Sponsor, the Sponsor Holders, Cantor and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, a “Holder” and collectively the “Holders”).
RECITALS
WHEREAS, the Company, Cantor, and the Sponsor are party to that certain Registration Rights Agreement, dated as of August 15, 2024 (the “Original RRA”);
WHEREAS, the Company is party to that certain Business Combination Agreement, dated as of March 26, 2025 (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Business Combination Agreement” and the transactions contemplated thereby, the “Business Combination”), by and between the Company, Terrestrial Energy Inc., a Delaware corporation which will change its name to “Terrestrial Energy Development Inc.” (“Legacy Terrestrial Energy”), and HCM II Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company;
WHEREAS, prior to the date hereof and subject to the conditions of the Business Combination Agreement, the Company transferred by way of continuation from the Cayman Islands to Delaware and domesticated as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended, and Part XII of the Companies Act (as revised) of the Cayman Islands (the “Domestication”), and as part of the Domestication, (i) each Class B ordinary share, par value $0.0001 per share, of the Company converted into one Class A ordinary share, (ii) each Class A ordinary share, par value $0.0001 per share, of the Company converted into one share of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) and (iii) each warrant to purchase one Class A ordinary share of the Company converted into one warrant to purchase one share of Common Stock (the “Warrants”);
WHEREAS, prior to the consummation of the Business Combination and subject to the conditions of the Business Combination Agreement, the Legacy Terrestrial Energy and the Company will enter into an assignment and assumption agreement, which will provide for the assignment and assumption by the Company of the Legacy Terrestrial Energy’s rights and obligations under the Terrestrial Energy Warrants, which will be effective as of the Effective Time (as defined in the Business Combination Agreement);
WHEREAS, pursuant to the transactions contemplated by the Business Combination Agreement and subject to the terms and conditions set forth therein, the security holders of Legacy Terrestrial Energy received an aggregate of 48,028,872 shares of Common Stock;
WHEREAS, pursuant to Section 5.5 of the Original RRA, the provisions, covenants and conditions set forth therein may be amended or modified upon the written consent of the Company and the Holders (as defined in the Original RRA) (the “Original Holders”) of at least a majority in interest of the Registrable Securities (as defined in the Original RRA) (the “Original Registrable Securities”) at the time in question, and Cantor and Sponsor are Original Holders of at least a majority in interest of the Original Registrable Securities as of the date hereof; and
WHEREAS, in connection with the consummation of the transactions described above, the Company and the Original Holders desire to amend and restate the Original RRA in its entirety as set forth herein, and the Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to the Registrable Securities (as defined below) on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
| 1.1 | Definitions. The terms defined in this ARTICLE<br>1 shall, for all purposes of this Agreement, have the respective meanings set forth below: |
|---|
“Additional Holder” shall have the meaning given in Section 5.11.
“Additional HolderCommon Stock” shall have the meaning given in Section 5.11.
“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company or the Board, in each case, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.
“Agreement” shall have the meaning given in the Preamble hereto.
“Block Trade” shall have the meaning given in Section 2.4.1.
“Board” shall mean the board of directors of the Company.
“Business Combination” shall have the meaning given in the Recitals hereto.
“Business CombinationAgreement” shall have the meaning given in the Recitals hereto. “Business Day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Law to close.
“Cantor” shall have the meaning given in the Preamble hereto.
“Closing” shall have the meaning given in the Business Combination Agreement.
“Closing Date” shall have the meaning given in the Business Combination Agreement.
“Commission” shall mean the U.S. Securities and Exchange Commission.
“Common Stock” shall have the meaning given in the Recitals hereto.
“Company” shall have the meaning given in the Preamble hereto and includes the Company’s successors by recapitalization, merger, consolidation, spin-off, reorganization or similar transaction.
“Demanding Holder” shall have the meaning given in Section 2.1.4.
“Domestication” shall have the meaning given in the Recitals hereto.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Exchangeable Shares” shall have the meaning given in the Business Combination Agreement.
“Floor Price” shall mean $1.00.
“Form S-1 Shelf” shall have the meaning given in Section 2.1.1.
“Form S-3 Shelf” shall have the meaning given in Section 2.1.1.
2
“Governmental Authority” shall mean any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality, department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.
“Holder Information” shall have the meaning given in Section 4.1.2.
“Holders” shall have the meaning given in the Preamble.
“Joinder” shall have the meaning given in Section 5.11.
“Law” shall mean any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, order or consent that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
“Legacy TerrestrialEnergy” shall have the meaning given in the Recitals hereto.
“Legal Proceeding” shall mean any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint, stipulation, assessment or arbitration, or any request (including any request for information), inquiry, hearing, proceeding or investigation, by or before any Governmental Authority.
“Lock-Up Agreements” shall mean the TEI Holder Lock-Up Agreement and the Sponsor Holder Lock-Up Agreement, collectively.
“Lock-Up Period” shall mean (a) with respect to the Sponsor Holder and their respective Permitted Transferees, the lock-up period specified with respect to a party in the Sponsor Holder Lock-Up Agreement and (b) with respect to the Terrestrial Energy Holders and their respective Permitted Transferees, the lock-up period specified with respect to a party in the TEI Holder Lock-Up Agreement.
“Maximum Numberof Securities” shall have the meaning given in Section 2.1.5.
“Minimum TakedownThreshold” shall have the meaning given in Section 2.1.4.
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading.
“Original RegistrableSecurities” shall have the meaning given in the Recitals hereto.
“Original RRA” shall have the meaning given in the Recitals hereto.
“Other CoordinatedOffering” shall have the meaning given in Section 2.4.1.
“Permitted Transferees” shall mean persons to whom a holder of Registrable Securities is permitted to transfer such Registrable Securities prior to the expiration of the applicable Lock-Up Period pursuant to the applicable Lock-Up Agreement.
“Person” shall mean an individual, corporation, 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 thereof, or an agency or instrumentality thereof.
“Piggyback Registration” shall have the meaning given in Section 2.2.1.
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
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“Registrable Security” or “Registrable Securities” shall mean: (i) any outstanding shares of Common Stock held by a Holder following the Closing that are issued in connection with the transactions contemplated by the Business Combination Agreement, including, for the avoidance of doubt, any shares of Common Stock issued in connection with the Domestication and shares of Common Stock issuable in respect of certain convertible notes of Legacy Terrestrial Energy in connection with the Business Combination; (ii) any shares of Common Stock that may be acquired by Holders upon the exercise, conversion, exchange or redemption of any other security of the Company or other right of a Holder to acquire Common Stock following the Closing that are issued in connection with the transactions contemplated by the Business Combination Agreement, including, for the avoidance of doubt, the shares of Common Stock issuable upon exercise of Warrants, shares of Common Stock issuable upon exercise of the Terrestrial Energy Warrants, shares of Common Stock issuable upon exercise of the Terrestrial Energy Options, and shares of Common Stock that may be acquired directly or indirectly by Holders upon exchange of any Exchangeable Shares; (iii) any outstanding Warrants held by a Holder with respect to any outstanding shares of Common Stock; (iv) any outstanding shares of Common Stock or warrants to purchase shares of Common Stock (including any shares of Common Stock issued or issuable upon the exercise of any such warrant) of the Company held by a Holder following the date hereof to the extent that such securities are “restricted securities” (as defined in Rule 144) or are otherwise held by an “affiliate” (as defined in Rule 144) of the Company; and (v) any other equity security of the Company issued or issuable with respect to any securities referenced in clause (i), (ii), (iii) or (iv) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation, spin-off, reorganization, exchange or similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of the following events: (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement by the applicable Holder to a Person that is not an “affiliate” (as defined in Rule 144) of the Company and new certificates for such securities not bearing (or book-entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (ii) such securities shall have been otherwise transferred (or moved to a brokerage account), new certificates for such securities not bearing (or book-entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) such securities may be sold without registration pursuant to Rule 144 (but with no volume or other restrictions or limitations including as to manner or timing of sale or current public information requirements); (v) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction; and (vi) the expiration of five (5) years after the closing of the Business Combination, which such five (5)-year period may be extended the Company in its sole discretion.
“Registration” shall mean a registration, including related Shelf Takedowns, effected by preparing and filing a Registration Statement, Prospectus or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registration Expenses” shall mean the documented, out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc. and any national securities exchange on which the Common Stock are then listed);
(B) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);
(C) printing, messenger, telephone and delivery expenses;
(D) reasonable fees and disbursements of counsel for the Company;
(E) reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and
(F) reasonable fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders in an Underwritten Offering or Other Coordinated Offering, provided, however, that such reimbursable fees and expenses of counsel shall not exceed $125,000.
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“Registration Statement” shall mean any registration statement that covers Registrable Securities pursuant to the provisions of this Agreement, including any Shelf, and in each case, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holders” shall have the meaning given in Section 2.1.5.
“Rule 144” shall mean Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.
“Shelf” shall mean the Form S-1 Shelf, the Form S-3 Shelf, or any Subsequent Shelf Registration, as the case may be.
“Shelf Registration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.
“Shelf Takedown” shall mean an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including a Piggyback Registration.
“Sponsor” shall have the meaning given in the Preamble hereto.
“Sponsor Holders” shall have the meaning given in the Preamble hereto.
“Sponsor HolderLock-Up Agreement” shall mean the lock-up agreement, dated October 28, 2025, entered into by the Company and the Sponsor.
“Sponsor MajorityHolders” shall mean the Sponsor Holders holding in the aggregate a majority of the Registrable Securities then held by the Sponsor Holders on an as-converted to Common Stock basis.
“Subsequent ShelfRegistration” shall have the meaning given in Section 2.1.2.
“TEI Holder Lock-UpAgreements” shall mean the lock-up agreements, dated October 28, 2025, entered into by and among the Company and the applicable Terrestrial Energy Holder named therein.
“Terrestrial EnergyOptions” shall mean the options outstanding as of the date of the Business Combination Agreement to purchase shares of common stock of Legacy Terrestrial Energy outstanding as of immediately prior to the effective time of the Business Combination Agreement.
“Terrestrial EnergyWarrants” shall mean the warrants outstanding as of the date of the Business Combination Agreement to purchase shares of common stock of Legacy Terrestrial Energy and all other warrants to purchase any shares or other equity interests of the Legacy Terrestrial Energy outstanding as of immediately prior to the effective time of the Business Combination Agreement.
“Total Limit” shall have the meaning given in Section 2.1.6.
“Transfer” shall mean the (i) sale or assignment of, offer to sell, contract or agreement to sell, hypothecation, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (ii) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) public announcement of any intention to effect any transaction specified in clause (i) or (ii).
“Transfer Agent” shall have the meaning given in Section 2.5.
“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.
“Underwritten Lock-UpPeriod” shall have the meaning given in Section 2.3.
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“Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Underwritten ShelfTakedown” shall have the meaning given in subsection 2.1.4.
“Withdrawal Notice” shall have the meaning given in Section 2.1.6.
“Yearly Limit” shall have the meaning given in Section 2.1.4.
ARTICLE 2
REGISTRATIONS
| 2.1 | Shelf Registration. |
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| 2.1.1 | Filing. The Company<br>shall, subject to Section 3.4, use its commercially reasonable efforts to submit or file within 30 calendar days following the<br>Closing Date a Registration Statement for a Shelf Registration on Form S-1 (the “Form S-1 Shelf”) or, if the<br>Company is eligible to use a Registration Statement on Form S-3, a Shelf Registration on Form S-3 (the “Form S-3 Shelf”),<br>in each case, covering the resale of all Registrable Securities (determined as of two (2) Business Days prior to such submission or filing<br>and assuming that all Terrestrial Energy Warrants are exercised in full at an exercise price equal to the Floor Price) on a delayed or<br>continuous basis and shall use its commercially reasonable efforts to have such Shelf declared effective as soon as reasonably practicable<br>after the filing thereof, but no later than the earlier of (a) the 90^th^ calendar day (or<br>120^th^ calendar day if the Commission notifies the Issuer that it will “review”<br>the Registration Statement) following the filing date thereof if the Commission notifies the Company that it will “review”<br>the Registration Statement and (b) the tenth (10^th^) Business Day after the date the Company<br>is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed”<br>or will not be subject to further review; provided that if such deadline falls on a Saturday, Sunday or other day that the Commission<br>is closed for business, such deadline shall be extended to the next Business Day on which the Commission is open for business. Such Shelf<br>shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally<br>available to, and requested by, any Holder named therein. Subject to Sections 2.1.3 and 3.4, the Company shall maintain<br>a Shelf in accordance with the terms hereof, and shall prepare and file with the Commission such amendments, including post-effective<br>amendments, and supplements as may be necessary to keep a Shelf continuously effective, available for use to permit the Holders named<br>therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such<br>time as there are no longer any Registrable Securities. In the event the Company files a Form S-1 Shelf, the Company shall use its commercially<br>reasonable efforts to convert the Form S-1 Shelf (and any Subsequent Shelf Registration) to a Form S-3 Shelf as soon as reasonably practicable<br>after the Company is eligible to use Form S-3. |
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| 2.1.2 | Subsequent Shelf Registration. If any Shelf ceases<br>to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, the Company shall,<br>subject to Section 3.4, use its commercially reasonable efforts to, as promptly as is reasonably practicable, cause such Shelf<br>to again become effective under the Securities Act (including using its commercially reasonable efforts to obtain the prompt withdrawal<br>of any order suspending the effectiveness of such Shelf), and shall use its commercially reasonable efforts to, as promptly as is reasonably<br>practicable, amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of<br>such Shelf or file an additional registration statement as a Shelf Registration (a “Subsequent Shelf Registration”)<br>registering the resale of all Registrable Securities under such Shelf (determined as of two (2) Business Days prior to such filing and<br>assuming that all Terrestrial Energy Warrants are exercised in full at an exercise price equal to the Floor Price), and pursuant to any<br>method or combination of methods legally available to, and requested by, any Holder named therein. If a Subsequent Shelf Registration<br>is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective<br>under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf<br>Registration shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act) if the<br>Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent applicable eligibility<br>determination date) and (ii) keep such Subsequent Shelf Registration continuously effective, available for use to permit the Holders<br>named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until<br>such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration shall be on Form S-3 to the extent<br>that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form. |
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| 2.1.3 | New Registrable Securities. Subject to Section<br>3.4, in the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis,<br>the Company shall, upon the written request of such Holder, promptly use its commercially reasonable efforts to cause the resale of such<br>Registrable Securities to be covered by either, at the Company’s option, any then-available Shelf (including by means of a post-effective<br>amendment) or a Subsequent Shelf Registration and cause the same to become effective as soon as practicable after such filing and such<br>Shelf or Subsequent Shelf Registration shall be subject to the terms hereof; provided, however, that the Company shall only be<br>required to cause such Registrable Securities to be so covered twice per calendar year for the Sponsor Holders, collectively. |
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| 2.1.4 | Requests for Underwritten Shelf Takedowns. Subject<br>to Section 3.4, at any time and from time to time when an effective Shelf is on file with the Commission, any Holder (a “DemandingHolder”) may request to sell all or any portion of its Registrable Securities in an Underwritten Offering or other coordinated<br>offering that is registered pursuant to the Shelf (each, an “Underwritten Shelf Takedown”); provided<br>that the Company shall only be obligated to effect an Underwritten Shelf Takedown if such offering shall include Registrable Securities<br>proposed to be sold by the Demanding Holder, either individually or together with other Demanding Holders, with a total offering price<br>reasonably expected to exceed, in the aggregate, $25 million (the “Minimum Takedown Threshold”). All requests<br>for Underwritten Shelf Takedowns shall be made by giving written notice to the Company, which shall specify the approximate number of<br>Registrable Securities proposed to be sold in the Underwritten Shelf Takedown. Subject to Section 2.4.4, the Company shall have<br>the right to select the Underwriters for such offering (which shall consist of one or more reputable nationally recognized investment<br>banks), subject to the initial Demanding Holder’s prior approval (which approval shall not be unreasonably withheld, conditioned<br>or delayed). Subject to Section 2.4.6, the Sponsor Holders, collectively, may demand Underwritten Shelf Takedowns pursuant to<br>this Section 2.1.4 not more than two (2) times in any 12-month period (the “Yearly Limit”). Notwithstanding<br>anything to the contrary in this Agreement, the Company may effect any Underwritten Offering pursuant to any then-effective Registration<br>Statement, including a Form S-3, that is then available for such offering. |
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| 2.1.5 | Reduction of Underwritten Offering. If the managing<br>Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the Company, the Demanding Holders and the Holders<br>requesting piggy back rights pursuant to this Agreement with respect to such Underwritten Shelf Takedown (the “RequestingHolders”) (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and<br>the Requesting Holders (if any) desire to sell, taken together with all other shares of Common Stock or other equity securities that<br>the Company desires to sell all other shares of Common Stock or other equity securities, if any, that have been requested to be sold<br>in such Underwritten Offering pursuant to separate written contractual piggy-back registration rights held by any other stockholders<br>who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering<br>without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering<br>(such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”),<br>then the Company shall include in such Underwritten Offering, before including any shares of Common Stock or other equity securities<br>proposed to be sold by the Company or by other holders of Common Stock or other equity securities, the Registrable Securities of the<br>Demanding Holders and the Requesting Holders (if any) (pro rata, as nearly as possible, based on the respective number of Registrable<br>Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such Underwritten Shelf Takedown and<br>the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten<br>Shelf Takedown that can be sold without exceeding the Maximum Number of Securities). To facilitate the allocation of Registrable Securities<br>in accordance with the above provisions, the Company or the Underwriters may round the number of shares allocated to any Holder to the<br>nearest ten (10) Registrable Securities. |
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| 2.1.6 | Underwritten Shelf Takedown Withdrawal. Prior to the<br>filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Shelf Takedown,<br>a majority in interest of the Demanding Holders initiating an Underwritten Shelf Takedown shall have the right to withdraw from such<br>Underwritten Shelf Takedown for any or no reason whatsoever upon written notification (a “Withdrawal Notice”)<br>to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten Shelf Takedown; provided<br>that any other Demanding Holder(s) may elect to have the Company continue an Underwritten Shelf Takedown if the Minimum Takedown Threshold<br>would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten Shelf Takedown by the Demanding Holder(s).<br>If withdrawn, a demand for an Underwritten Shelf Takedown shall constitute a demand for an Underwritten Shelf Takedown by the withdrawing<br>Demanding Holder for purposes of Section 2.1.4 and shall count toward the Yearly Limit and the Total Limit, unless either (i)<br>the Demanding Holder(s) making the withdrawal has not previously withdrawn any Underwritten Shelf Takedown or (ii) the Demanding Holder(s)<br>making the withdrawal reimburses the Company for all Registration Expenses with respect to such Underwritten Shelf Takedown (or, if there<br>is more than one Demanding Holder, a pro rata portion of such Registration Expenses based on the respective number of Registrable Securities<br>that each Demanding Holder has requested be included in such Underwritten Shelf Takedown); provided that, if any other Demanding<br>Holder(s) elects to continue an Underwritten Shelf Takedown pursuant to the proviso in the immediately preceding sentence, such Underwritten<br>Shelf Takedown shall instead count as an Underwritten Shelf Takedown demanded by such Demanding Holder(s) for purposes of Section<br>2.1.4 and shall count toward the Yearly Limit and the Total Limit. Following the receipt of any Withdrawal Notice, the Company shall<br>promptly forward such Withdrawal Notice to any other Requesting Holders. Notwithstanding anything to the contrary in this Agreement,<br>the Company shall be responsible for the Registration Expenses incurred in connection with a Shelf Takedown prior to its withdrawal under<br>this Section 2.1.6, other than if a Demanding Holder elects to pay such Registration Expenses pursuant to clause (ii) of<br>the second sentence of this Section 2.1.6. |
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| 2.2 | Piggyback Registration. |
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| 2.2.1 | Piggyback Rights. If the Company or any Holder proposes<br>to conduct a registered offering of, or if the Company proposes to file a Registration Statement under the Securities Act with respect<br>to the Registration of, equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity<br>securities, or Company equity securities for its own account or for the account of stockholders of the Company (or by the Company and<br>by the securityholders of the Company including, without limitation, an Underwritten Shelf Takedown pursuant to Section 2.2.1),<br>other than a Registration Statement (or any registered offering with respect thereto) (i) filed in connection with any employee stock<br>option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing securityholders,<br>(iii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities<br>Act or any successor rule thereto), (iv) for an offering of debt that is convertible into equity securities of the Company, (v) for a<br>dividend reinvestment plan, or (vi) a Block Trade or an Other Coordinated Offering (which shall be subject to Section 2.4), then<br>the Company shall give written notice of such proposed offering to all of the Holders of Registrable Securities as soon as practicable<br>but not less than seven days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering<br>pursuant to a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such<br>offering, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of<br>distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the<br>Holders of Registrable Securities the opportunity to include in such registered offering such number of Registrable Securities as such<br>Holders may request in writing within two (2) Business Days after transmission of such written notice (such Registration, a “PiggybackRegistration”). Subject to Section 2.2.2, the Company shall, in good faith, cause such Registrable Securities to<br>be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the managing Underwriter<br>or Underwriters of such Piggyback Registration to permit the Registrable Securities requested by the Holders pursuant to this Section<br>2.2.1 to be included therein on the same terms and conditions as any similar securities of the Company included in such registered<br>offering and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution<br>thereof. The inclusion of any Holder’s Registrable Securities in a Piggyback Registration shall be subject to such Holder’s<br>agreement to enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by<br>the Company. |
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| 2.2.2 | Reduction of Piggyback Registration. If the managing<br>Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and<br>the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares<br>of Common Stock or other equity securities that the Company or the Demanding Holders desire to sell, taken together with (i) the shares<br>of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been demanded pursuant to separate<br>written contractual arrangements with Persons other than the Holders of Registrable Securities hereunder (ii) the Registrable Securities<br>as to which Registration has been requested pursuant to this Section 2.2, and (iii) the shares of Common Stock or other equity<br>securities, if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual piggy-back<br>registration rights of Persons other than the Holders of Registrable Securities hereunder, exceeds the Maximum Number of Securities,<br>then: |
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| (a) | If the Registration or registered offering is undertaken for<br>the Company’s account, the Company shall include in any such Registration or registered offering (A) first, the shares of Common<br>Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities;<br>(B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable<br>Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof (prorata, as nearly as practicable, based on the respective number of Registrable Securities that such Holder has requested be included<br>in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such<br>Underwritten Offering), which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum<br>Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other<br>equity securities, if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual<br>piggy-back registration rights of Persons other than the Holders of Registrable Securities hereunder, which can be sold without exceeding<br>the Maximum Number of Securities; |
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| (b) | If the Registration or registered offering is pursuant to<br>a request by Persons other than the Holders of Registrable Securities, then the Company shall include in any such Registration or registered<br>offering (A) first, the shares of Common Stock or other equity securities, if any, of such requesting Persons, other than the Holders<br>of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum<br>Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their<br>rights to register their Registrable Securities pursuant to Section 2.2.1, pro rata, as nearly as practicable, based on the respective<br>number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of<br>Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding<br>the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing<br>clauses (A) and (B), the shares of Common Stock or other equity securities that the Company desires to sell, which can<br>be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not<br>been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other equity securities,<br>if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual piggy-back registration<br>rights of such Persons other than the Holder of Registrable Securities hereunder, which can be sold without exceeding the Maximum Number<br>of Securities; and |
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| (c) | If the Registration or registered offering is pursuant to<br>a request by Holder(s) of Registrable Securities pursuant to Section 2.1, then the Company shall include in any such Registration<br>or registered offering securities in the priority set forth in Section 2.1.5. |
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| 2.2.3 | Piggyback Registration Withdrawal. Any Holder of Registrable<br>Securities (other than a Demanding Holder, whose right to withdraw from an Underwritten Shelf Takedown, and related obligations, shall<br>be governed by Section 2.1.6) shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon<br>written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback<br>Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration<br>or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the filing of the applicable “red herring”<br>prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The Company (whether<br>on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual<br>obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time<br>prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement (other than Section<br>2.1.6), the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior<br>to its withdrawal under this Section 2.2.3. |
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| 2.2.4 | Unlimited Piggyback Registration Rights. For purposes<br>of clarity, subject to Section 2.1.6, any Piggyback Registration effected pursuant to Section 2.2 hereof shall not be counted<br>as an Underwritten Shelf Takedown under Section 2.1.4 and shall not count toward the Yearly Limit or the Total Limit. |
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| 2.3 | Market Stand-off. In connection with any Underwritten<br>Offering of equity securities of the Company (other than a Block Trade or Other Coordinated Offering), if requested by the managing Underwriter,<br>each Holder that is an executive officer or director of the Company or a Holder in excess of 5.0% of the then-outstanding Common Stock<br>or securities convertible thereinto (and for which it is customary for such a Holder to agree to a lock-up) agrees that it shall not<br>Transfer any shares of Common Stock or other equity securities of the Company (other than those included in such offering pursuant to<br>this Agreement), without the prior written consent of the Company, during the 90-day period (or such shorter time agreed to by the managing<br>Underwriters) beginning on the date of pricing of such offering (the “Underwritten Lock-Up Period”), except<br>(i) to Permitted Transferees, (ii) as expressly permitted in writing by the Company or (iii) in the event the Underwriters managing the<br>offering otherwise consent in writing. Each such Holder agrees to execute a customary lock-up agreement in favor of the Underwriters<br>to such effect (in each case on substantially the same terms and conditions as all other Holders). The terms of such lock-up agreements<br>shall be negotiated among the applicable Holders, the Company and the Underwriters and shall include customary exclusions from the restrictions<br>on Transfer set forth therein. The Company will not be obligated to undertake an Underwritten Shelf Takedown during any Underwritten<br>Lock-Up Period binding on the Holders, nor will the Company be obligated to include in any Piggyback Registration any Registrable Securities<br>that are then subject to a “lock-up” agreement. |
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| 2.4 | Block Trades; Other Coordinated Offerings. |
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| 2.4.1 | Notwithstanding any other provision of this ARTICLE 2<br>but subject to Section 3.4, at any time and from time to time when an effective Shelf is on file with the Commission, if a Demanding<br>Holder wishes to engage in (a) an underwritten registered offering not involving a “roadshow,” an offer commonly known as<br>a “block trade” (a “Block Trade”) or (b) an “at the market” or similar registered offering<br>through a broker, sales agent or distribution agent, whether as agent or principal, (an “Other Coordinated Offering”),<br>in each case, with an anticipated aggregate offering price of, either (x) at least $25 million or (y) all remaining Registrable Securities<br>held by the Demanding Holder, then such Demanding Holder only needs to notify the Company of the Block Trade or Other Coordinated Offering<br>at least five (5) Business Days prior to the day such offering is to commence and the Company shall as expeditiously as possible use<br>its commercially reasonable efforts to facilitate such Block Trade or Other Coordinated Offering; provided that the Demanding<br>Holders representing a majority of the Registrable Securities wishing to engage in the Block Trade or Other Coordinated Offering shall<br>use commercially reasonable efforts to work with the Company and any Underwriters, brokers, sales agents or placement agents prior to<br>making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related<br>to the Block Trade or Other Coordinated Offering. |
| --- | --- |
| 2.4.2 | Prior to the filing of the applicable “red herring”<br>prospectus or prospectus supplement used in connection with a Block Trade or Other Coordinated Offering, a majority-in-interest of the<br>Demanding Holders initiating such Block Trade or Other Coordinated Offering shall have the right to submit a Withdrawal Notice to the<br>Company, the Underwriter or Underwriters (if any) and any brokers, sale agents or placement agents (if any) of their intention to withdraw<br>from such Block Trade or Other Coordinated Offering. Notwithstanding anything to the contrary in this Agreement, the Demanding Holder<br>shall be responsible for the Registration Expenses incurred in connection with a Block Trade or Other Coordinated Offering prior to its<br>withdrawal under this Section 2.4.2. |
| --- | --- |
| 2.4.3 | Notwithstanding anything to the contrary in this Agreement,<br>Section 2.2 shall not apply to a Block Trade or Other Coordinated Offering initiated by a Demanding Holder pursuant to this Agreement. |
| --- | --- |
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| 2.4.4 | The Demanding Holder in a Block Trade or Other Coordinated<br>Offering shall have the right to select the Underwriters and any brokers, sale agents or placement agents (if any) for such Block Trade<br>or Other Coordinated Offering (in each case, which shall consist of one or more reputable nationally recognized investment banks). |
|---|---|
| 2.4.5 | Subject to Section 2.4.6, the Sponsor Holders, as<br>a group, may demand no more than two (2) Block Trades or Other Coordinated Offerings pursuant to this Section 2.4 in any twelve<br>(12) month period. For the avoidance of doubt, any Block Trade or Other Coordinated Offering effected pursuant to this Section 2.4<br>shall not be counted as a demand for an Underwritten Shelf Takedown pursuant to Section 2.1.4. |
| --- | --- |
| 2.4.6 | Notwithstanding anything to the contrary in this Agreement,<br>with respect to the Sponsor Holders, as a group, in no event may the number of Block Trades or Other Coordinated Offerings demanded pursuant<br>to this Section 2.4 plus the number of Underwritten Shelf Takedowns demanded pursuant to Section 2.1.4 exceed a total of<br>three (3) demands for such group in any twelve (12) month period. |
| --- | --- |
| 2.5 | Legends. In connection with any sale or other disposition<br>of the Registrable Securities by a Holder pursuant to Rule 144 promulgated under the Securities Act (or any successor rule promulgated<br>thereafter by the Commission) and upon compliance by the Holder with the requirements of this Section 2.5, if requested by the<br>Holder, the Company shall use its commercially reasonable efforts to instruct the transfer agent for the Registrable Securities (the<br>“Transfer Agent”) to remove any restrictive legends related to the book entry account holding such Registrable<br>Securities (if the requirements of Rule 144 have been met) and make a new, unlegended entry for such book entry shares sold or disposed<br>of without restrictive legends promptly after any such request therefor from the Holder; provided that the Company and the Transfer<br>Agent have timely received from the Holder customary representations and other documentation reasonably acceptable to the Company and<br>the Transfer Agent in connection therewith. Subject to receipt from the Holder by the Company and the Transfer Agent of customary representations<br>and other documentation reasonably acceptable to the Company and the Transfer Agent in connection therewith, the Holder may request that<br>the Company remove any legend from the book entry position evidencing its Registrable Securities and the Company will, if required by<br>the Transfer Agent, use its commercially reasonable efforts to cause its legal counsel to deliver a legal opinion, in a form reasonably<br>acceptable to the Transfer Agent, to the effect that the removal of such restrictive legends in such circumstances may be effected under<br>the Securities Act, following the earliest of such time as such Registrable Securities (i) are subject to or have been or are about to<br>be sold pursuant to an effective registration statement or (ii) have been or are about to be sold pursuant to Rule 144 promulgated under<br>the Securities Act (or any successor rule promulgated thereafter by the Commission). If restrictive legends are no longer required for<br>such Registrable Securities pursuant to the foregoing, the Company shall, in accordance with the provisions of this Section 2.5<br>promptly after any request therefor from the Holder accompanied by such customary and reasonably acceptable representations and other<br>documentation referred to above establishing that restrictive legends are no longer required, deliver to the Transfer Agent irrevocable<br>instructions that the Transfer Agent shall make a new, unlegended entry for such book entry shares. The Company shall be responsible<br>for the fees of its Transfer Agent, its legal counsel and all DTC fees associated with such issuance. |
| --- | --- |
| 2.6 | FINRA Compliance. Notwithstanding anything herein<br>to the contrary, Cantor may not (i) exercise demand registration rights after five (5) years from the commencement of sales in the Company’s<br>initial public offering, (ii) exercise demand rights on more than one occasion or (iii) exercise its “piggyback” registration<br>rights after seven (7) years from the effective date of the Company’s initial public offering. |
| --- | --- |
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ARTICLE 3
COMPANY PROCEDURES
| 3.1 | General Procedures. In connection with any Shelf and/or<br>Shelf Takedown, the Company shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable<br>Securities in accordance with the intended plan of distribution thereof (and including all manners of distribution in such Registration<br>Statement as Holders may reasonably request in connection with the filing of such Registration Statement and as permitted by law, including<br>distribution of Registrable Securities to a Holder’s members, securityholders or partners), and pursuant thereto the Company shall,<br>as expeditiously as possible: |
|---|---|
| 3.1.1 | prepare and file with the Commission, as soon as reasonably<br>practicable, a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause<br>such Registration Statement to become effective and remain effective until all Registrable Securities have ceased to be Registrable Securities; |
| --- | --- |
| 3.1.2 | prepare and file with the Commission such amendments and<br>post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by any<br>Holder that holds at least five percent (5%) of the Registrable Securities registered on such Registration Statement or any Underwriter<br>of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by<br>the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable<br>Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration<br>Statement or supplement to the Prospectus; |
| --- | --- |
| 3.1.3 | prior to filing a Registration Statement or Prospectus, or<br>any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included<br>in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment<br>and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein),<br>the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters<br>and the Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may request in order<br>to facilitate the disposition of the Registrable Securities owned by such Holders; |
| --- | --- |
| 3.1.4 | prior to any public offering of Registrable Securities, use<br>its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under<br>such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included<br>in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence reasonably satisfactory<br>to such Holders that the Registrable Securities are exempt from such registration or qualification) and (ii) take such action necessary<br>to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental<br>authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that<br>may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the<br>disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to<br>qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which<br>it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject; |
| --- | --- |
| 3.1.5 | use commercially reasonable efforts to cause all such Registrable<br>Securities to be listed on each national securities exchange or automated quotation system on which similar securities issued by the<br>Company are then listed; |
| --- | --- |
| 3.1.6 | provide a transfer agent or warrant agent, as applicable,<br>and registrar for all such Registrable Securities no later than the effective date of such Registration Statement; |
| --- | --- |
| 3.1.7 | advise each seller of such Registrable Securities, promptly<br>after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness<br>of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its commercially<br>reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued; |
| --- | --- |
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| 3.1.8 | prior to the filing of any Registration Statement or Prospectus<br>or any amendment or supplement to such Registration Statement or Prospectus as may be (a) necessary in order to comply with the Securities<br>Act, the Exchange Act and the rules and regulations promulgated under the Securities Act or Exchange Act, as applicable or (b) advisable<br>in order to reduce the number of days that sales are suspended pursuant to Section 3.4, furnish a copy thereof to each seller<br>of such Registrable Securities and by means of one counsel on behalf of all such sellers (excluding any exhibits thereto and any filing<br>made under the Exchange Act that is to be incorporated by reference therein); |
|---|---|
| 3.1.9 | notify the selling Holders at any time when a Prospectus<br>relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result<br>of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such<br>Misstatement as set forth in Section 3.4 hereof; |
| --- | --- |
| 3.1.10 | in the event of an Underwritten Offering, a Block Trade,<br>an Other Coordinated Offering, or sale by a broker, placement agent or sales agent that is registered pursuant to a Registration Statement,<br>permit a representative of the Holders (such representative to be selected by a majority of the participating Holders), the Underwriters<br>or other financial institutions facilitating such Underwritten Offering, Block Trade, Other Coordinated Offering or other sale pursuant<br>to such Registration, if any, and any attorney, consultant or accountant retained by such Holders collectively, Underwriters or other<br>financial institutions to participate, at each such Person’s own expense, in the preparation of the Registration Statement, and<br>cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative,<br>Underwriter, financial institution, attorney, consultant or accountant in connection with the Registration; provided, however,<br>that such representative, Underwriters or financial institutions agree to confidentiality arrangements, in form and substance reasonably<br>satisfactory to the Company, prior to the release or disclosure of any such information; |
| --- | --- |
| 3.1.11 | use commercially reasonable efforts to obtain a “comfort”<br>letter (including a bring-down letter dated as of the date the Registrable Securities are delivered for sale pursuant to such Registration)<br>from the Company’s independent registered public accountants in the event of an Underwritten Offering, a Block Trade, an Other<br>Coordinated Offering or a sale by a broker, placement agent or sales agent pursuant to a Registration Statement (subject to such Underwriter<br>or other financial institution facilitating such offering providing such certification or representation as reasonably requested by the<br>Company’s independent registered public accountings and the Company’s counsel), to the extent customary, in customary form<br>and covering such matters of the type customarily covered by “comfort” letters as the managing Underwriter or other similar<br>type of sales agent or placement agent may reasonably request; |
| --- | --- |
| 3.1.12 | use commercially reasonable efforts to obtain, in the event<br>of an Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a broker, placement agent or sales agent pursuant<br>to a Registration Statement, to the extent customary, on the date the Registrable Securities are delivered for sale pursuant to such<br>Registration, obtain an opinion and negative assurance letter, dated such date, of counsel representing the Company for the purposes<br>of such Registration, addressed to the participating Holders, the broker, the placement agent or sales agent, if any, and the Underwriters,<br>if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the participating<br>Holders, broker, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions<br>and negative assurance letters, provided, in each case, that such participating Holders provide such information to such counsel<br>as is customarily required for, or is reasonably requested by such counsel for purposes of, such opinion or negative assurance letter; |
| --- | --- |
| 3.1.13 | in the event of any Underwritten Offering, a Block Trade,<br>an Other Coordinated Offering or sale by a broker, placement agent or sales agent pursuant to a Registration Statement, enter into and<br>perform its obligations under an underwriting agreement, purchase agreement, sales agreement or placement agreement in usual and customary<br>form, with the managing Underwriter or broker, sales agent or placement agent of such offering or sale; |
| --- | --- |
| 3.1.14 | make available to its security holders, as soon as reasonably<br>practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s<br>first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of<br>the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission); |
| --- | --- |
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| 3.1.15 | with respect to an Underwritten Offering pursuant to Section<br>2.1.4, use its commercially reasonable efforts to make available senior executives of the Company to participate in customary “road<br>show” presentations that may be reasonably requested (in light of the circumstances of the Company at the time) by the Underwriter<br>in such Underwritten Offering; and |
|---|---|
| 3.1.16 | otherwise, in good faith, cooperate reasonably with, and<br>take such customary actions as may reasonably be requested by the Holders participating in such Registration, consistent with the terms<br>of this Agreement, in connection with such Registration. |
| --- | --- |
Notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter or other sales agent or placement agent if such Underwriter or other sales agent or placement agent has not then been named with respect to the applicable Underwritten Offering or other offering involving a registration as an Underwriter or broker, sales agent or placement agent, as applicable.
| 3.2 | Registration Expenses. The Registration Expenses of<br>all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling<br>expenses relating to the sale of Registrable Securities, such as Underwriters’ or agents’ commissions and discounts, brokerage<br>fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable<br>fees and expenses of any legal counsel representing the Holders. |
|---|---|
| 3.3 | Requirements for Participation in Underwritten Offerings.<br>The Holders of Registrable Securities shall provide such information as may reasonably be requested by the Company, or the managing Underwriter<br>or placement agent or sales agent, if any, in connection with the preparation of any Registration Statement or Prospectus, including<br>amendments and supplements thereto, in order to effect the registration of any Registrable Securities under the Securities Act pursuant<br>to ARTICLE 2 and in connection with the Company’s obligation to comply with federal and applicable state securities Laws.<br>Notwithstanding anything in this Agreement to the contrary, if any Holder does not timely provide the Company with its requested Holder<br>Information, the Company may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus<br>if the Company determines, based on the advice of counsel, that such information is necessary to effect the registration and such Holder<br>continues thereafter to withhold such information. No Person may participate in any Underwritten Offering or other coordinated offering<br>for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such Person (i) agrees to sell<br>such Person’s securities on the basis provided in any arrangements approved by the Company and (ii) timely completes and executes<br>all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting or other agreements and other customary<br>documents as may be reasonably required under the terms of such arrangements. The exclusion of a Holder’s Registrable Securities<br>as a result of this Section 3.3 shall not affect the registration of the other Registrable Securities to be included in such Registration. |
| --- | --- |
| 3.4 | Suspension of Sales; Adverse Disclosure; Restrictionson Registration Rights. |
| --- | --- |
| 3.4.1 | Upon receipt of written notice from the Company that a Registration<br>Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities<br>until he, she or it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that<br>the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice),<br>or until he, she or it is advised in writing by the Company that the use of the Prospectus may be resumed. |
| --- | --- |
| 3.4.2 | If the filing, initial effectiveness or continued use of<br>a Registration Statement in respect of any Registration at any time would (i) require the Company to make an Adverse Disclosure, (ii)<br>require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the<br>Company’s control or (iii) in the good faith judgment of the majority of the Board, be seriously detrimental to the Company, and<br>the majority of the Board concludes as a result that it is essential to defer such filing, initial effectiveness or continued use at<br>such time, the Company may, upon giving prompt written notice of such action to the Holders (which notice shall not specify the nature<br>of the event giving rise to such delay or suspension), delay the filing or initial effectiveness of, or suspend use of, such Registration<br>Statement for the shortest period of time determined in good faith by the Company to be necessary for such purpose. In the event the<br>Company exercises its rights under this Section 3.4.2, the Holders agree to suspend, immediately upon their receipt of the notice<br>referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable<br>Securities until such Holder receives written notice from the Company that such sales or offers of Registrable Securities may be resumed,<br>and in each case maintain the confidentiality of such notice and its contents. |
| --- | --- |
14
| 3.4.3 | Subject to Section 3.4.4, if (i) during the period<br>starting with the date 60 days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date 120<br>days after the effective date of, a Company-initiated Registration, and provided that the Company continues to actively employ,<br>in good faith, all commercially reasonable efforts to maintain the effectiveness of the applicable Shelf Registration, or (ii) if, pursuant<br>to Section 2.1.4, Holders have requested an Underwritten Shelf Takedown and the Company and such Holders are unable to obtain<br>the commitment of underwriters to firmly underwrite such offering, then, in each case, the Company may, upon giving prompt written notice<br>of such action to the Holders, delay any other registered offering pursuant to Section 2.1.4. |
|---|---|
| 3.4.4 | The right to delay or suspend any filing, initial effectiveness<br>or continued use of a Registration Statement pursuant to Section 3.4.2 or a registered offering pursuant to Section 3.4.3<br>shall be exercised by the Company, in the aggregate, for not more than 90 consecutive calendar days or more 120 total calendar days in<br>each case, during any 12-month period. |
| --- | --- |
| 3.5 | Reporting Obligations. As long as any Holder shall<br>own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to use<br>commercially reasonable efforts to file timely (or obtain extensions in respect thereof and file within the applicable grace period)<br>all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act. Upon the<br>request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it<br>has complied with such requirements. |
| --- | --- |
ARTICLE 4
INDEMNIFICATION AND CONTRIBUTION
| 4.1 | Indemnification. |
|---|---|
| 4.1.1 | The Company agrees to indemnify, to the extent permitted by<br>law, each Holder of Registrable Securities, its officers, directors and agents and each Person who controls such Holder (within the meaning<br>of the Securities Act) against all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses (including,<br>without limitation, reasonable outside attorneys’ fees) resulting from any untrue or alleged untrue statement of material fact<br>contained in or incorporated by reference in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof<br>or supplement thereto filed pursuant to this Agreement or any omission or alleged omission of a material fact required to be stated therein<br>or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information<br>or affidavit so furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters,<br>their officers and directors and each Person who controls such Underwriters (within the meaning of the Securities Act) to the same extent<br>as provided in the foregoing with respect to the indemnification of the Holder. |
| --- | --- |
| 4.1.2 | In connection with any Registration Statement filed pursuant<br>to this Agreement in which a Holder of Registrable Securities is participating, such Holder shall furnish (or cause to be furnished)<br>to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration<br>Statement or Prospectus (the “Holder Information”) and, to the extent permitted by law, shall indemnify the<br>Company, its directors, officers and agents and each Person who controls the Company (within the meaning of the Securities Act) against<br>all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses (including, without limitation, reasonable<br>outside attorneys’ fees) resulting from any untrue or alleged untrue statement of material fact contained in or incorporated by<br>reference in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission<br>or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but<br>only to the extent that such untrue statement is contained in (or not contained in, in the case of an omission) any information or affidavit<br>so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be<br>several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities<br>shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to<br>such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each<br>person or entity who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing<br>with respect to indemnification of the Company. |
| --- | --- |
15
| 4.1.3 | Any Person entitled to indemnification herein shall (i) give<br>prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the<br>failure to give prompt notice shall not impair any Person’s right to indemnification hereunder to the extent such failure has not<br>materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest<br>between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the<br>defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party<br>shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not<br>be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be<br>obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to<br>such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party<br>and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified<br>party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money<br>(and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement<br>or admission of fault and culpability on the part of such indemnified party or which settlement does not include as an unconditional<br>term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim<br>or litigation. |
|---|---|
| 4.1.4 | The indemnification provided for under this Agreement shall<br>remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director<br>or controlling Person of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable<br>Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for<br>contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason. |
| --- | --- |
| 4.1.5 | If the indemnification provided under Section 4.1<br>hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims,<br>damages, liabilities and out-of-pocket expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified<br>party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities<br>and out-of-pocket expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified<br>party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall<br>be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of<br>a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or<br>relates to information supplied by (or not supplied by, in the case of an omission), such indemnifying party or indemnified party, and<br>the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct<br>or prevent such action; provided, however, that the liability of any Holder under this Section 4.1.5 shall be limited to<br>the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by<br>a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth<br>in Sections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or out-of-pocket expenses reasonably<br>incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable<br>if contribution pursuant to this Section 4.1.5 were determined by pro rata allocation or by any other method of allocation,<br>which does not take account of the equitable considerations referred to in this Section 4.1.5. No Person guilty of fraudulent<br>misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section<br>4.1.5 from any Person who was not guilty of such fraudulent misrepresentation. |
| --- | --- |
16
| 4.2 | Waiver of Medallion Guaranty. The Company agrees to<br>use commercially reasonable efforts to enter into that certain indemnification agreement, substantially in the form attached as Exhibit<br>B to this Agreement, in favor of Continental Stock Transfer & Trust Company (or any successor transfer agent or warrant agent<br>of the Company) in connection with the waiver of any requirement to provide a medallion guarantee in connection with any Transfer of<br>any equity securities of the Company by any Sponsor Holder or Cantor or any of their respective Permitted Transferees; provided<br>that, in each case, as a prerequisite to the Company’s entry into such indemnification agreement, such Sponsor Holder or Cantor<br>or their respective Permitted Transferee enters into an indemnification agreement, substantially in the form attached as Exhibit C<br>to this Agreement, in favor of the Company. |
|---|
ARTICLE 5
MISCELLANEOUS
| 5.1 | Notices. All notices, consents, waivers and other<br>communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by email<br>or other electronic means (including email), (iii) one (1) Business Day after being sent, if sent by reputable, nationally recognized<br>overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return<br>receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be<br>specified by like notice). Any notice or communication under this Agreement must be addressed, if to the Company, to: Terrestrial Energy<br>Inc., 2730 W. Tyvola Road, Suite 100, Charlotte, NC 28217, Attention: Steve Millsap, Email: smillsap@terrestrialenergy.com, with a copy<br>(which shall not constitute notice) to Bryan Cave Leighton Paisner LLP, One Atlantic Center, 14th Floor, 1201 W. Peachtree Street, NW,<br>Atlanta, Georgia 30309, Attention: Amy Taylor Wilson, Jonathan Nesher, Email: amy.wilson@bclplaw.com, jonathan.nesher@bclplaw.com; and<br>if to any Holder, at such Holder’s address or contact information as set forth in the Company’s books and records. Any party<br>may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of<br>address shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.1. |
|---|---|
| 5.2 | Assignment; No Third Party Beneficiaries. |
| --- | --- |
| 5.2.1 | This Agreement and the rights, duties and obligations of<br>the Company hereunder may not be assigned or delegated by the Company in whole or in part. |
| --- | --- |
| 5.2.2 | This Agreement and the rights, duties and obligations of<br>the Holders hereunder may not be assigned or delegated by the Holders in whole or in part; provided, however, that, subject to<br>Section 5.2.5, a Holder may assign the rights and obligations of such Holder hereunder relating to particular Registrable Securities<br>in connection with the transfer of such Registrable Securities to a Permitted Transferee of such Holder (it being understood that no<br>such Transfer shall reduce any rights of the Holder with respect to Registrable Securities still held by such Holder). A Permitted Transferee<br>receiving Registrable Securities from a Sponsor Holder shall become a Sponsor Holder, a Permitted Transferee receiving Registrable Securities<br>from a Terrestrial Energy Holder shall become a Terrestrial Energy Holder and a Permitted Transferee receiving Registrable Securities<br>from an other Holder shall become an other Holder. |
| --- | --- |
| 5.2.3 | This Agreement and the provisions hereof shall be binding<br>upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders, which shall include<br>Permitted Transferees. |
| --- | --- |
| 5.2.4 | This Agreement shall not confer any rights or benefits on<br>any Persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.2 hereof. |
| --- | --- |
| 5.2.5 | No assignment by any party hereto of such party’s rights,<br>duties and obligations hereunder shall be binding upon or obligate the Company unless such assignment is permitted under Section 5.2.2<br>unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 hereof and (ii)<br>the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this<br>Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other<br>than as provided in this Section 5.2 shall be null and void. |
| --- | --- |
17
| 5.3 | Counterparts. This Agreement may be executed and delivered<br>(including by facsimile or other electronic transmission) in one or more counterparts, and by the different parties hereto in separate<br>counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and<br>the same agreement. |
|---|---|
| 5.4 | Governing Law. This Agreement, and all claims or causes<br>of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and<br>construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of Laws to<br>the extent such principles or rules would require or permit the application of Laws of another jurisdiction. |
| --- | --- |
| 5.5 | Jurisdiction. Any Legal Proceeding based upon, arising<br>out of or related to this Agreement or the transactions contemplated hereby must be brought in the Court of Chancery of the State of<br>Delaware (or, to the extent such court does not have jurisdiction, in the United States District Court for the District of Delaware and<br>to the extent such court does not have subject matter jurisdiction, the Superior Court of the State of Delaware), and each of the parties<br>irrevocably (i) submits to the exclusive jurisdiction of each such court in any such Legal Proceeding, (ii) waives any objection it may<br>now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii) agrees that all claims in respect of the Legal<br>Proceeding shall be heard and determined only in any such court, and (iv) agrees not to bring any Legal Proceeding arising out of or<br>relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect<br>the right of any party to serve process in any manner permitted by Law or to commence Legal Proceedings or otherwise proceed against<br>any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Legal Proceeding, suit or proceeding brought<br>pursuant to this Section 5.5. |
| --- | --- |
| 5.6 | Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND<br>AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED<br>AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY<br>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<br>OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. |
| --- | --- |
| 5.7 | Amendments and Modifications. Upon the written consent<br>of the Company and the Holders of at least a majority in interest of the Registrable Securities at the time in question, compliance with<br>any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions<br>may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that<br>adversely affects the Sponsor Holders shall also require the written consent of the Sponsor Majority Holders so long as the Sponsor Holders<br>hold, in the aggregate, at least two percent (2%) of the outstanding shares of Common Stock (on an as converted to Common Stock basis);<br>and provided, further, that any amendment hereto or waiver hereof that adversely affects one Holder, solely in his, her or its<br>capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in<br>such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other<br>party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement<br>shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies<br>under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder<br>by such party. |
| --- | --- |
| 5.8 | Other Registration Rights. Other than as provided<br>in (i) that certain Amended and Restated Warrant Agreement, dated as of October 28, 2025, between the Company and Continental Stock Transfer<br>& Trust Company, and (ii) that certain Subscription Agreement, dated as of March 26, 2025, between the Company and the PIPE investors<br>party thereto, the Company represents and warrants that no Person, other than a Holder of Registrable Securities, has any right to require<br>the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration Statement<br>filed by the Company for the sale of securities for its own account or for the account of any other Person. Further, the Company represents<br>and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions, and<br>in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail. |
| --- | --- |
18
| 5.9 | Term. This Agreement shall terminate upon the earlier<br>of (i) the fifth anniversary of the date of this Agreement and (ii) with respect to any Holder, the date that such Holder no longer holds<br>any Registrable Securities. The provisions of ARTICLE 4 shall survive any termination. |
|---|---|
| 5.10 | Holder Information. Each Holder agrees, if requested<br>in writing, to represent to the Company the total number of Registrable Securities held by such Holder in order for the Company to make<br>determinations hereunder. |
| --- | --- |
| 5.11 | Additional Holders; Joinder. In addition to Persons<br>who may become Holders pursuant to Section 5.2, subject to the prior written consent of at least a majority in interest of the<br>aggregate Registrable Securities at the time in question, the Company may make any Person who acquires Common Stock or rights to acquire<br>Common Stock after the date hereof a party to this Agreement (each such Person, an “Additional Holder”) by<br>obtaining an executed joinder to this Agreement from such Additional Holder in the form of Exhibit A attached hereto (a “Joinder”).<br>Such Joinder shall specify the rights and obligations of the applicable Additional Holder under this Agreement. Upon the execution and<br>delivery and subject to the terms of a Joinder by such Additional Holder, the Common Stock of the Company then owned, or underlying any<br>rights then owned, by such Additional Holder (the “Additional Holder Common Stock”) shall be Registrable Securities<br>to the extent provided herein and therein, and such Additional Holder shall be a Holder under this Agreement with respect to such Additional<br>Holder Common Stock. |
| --- | --- |
| 5.13 | Lock-Up. For the avoidance of doubt, the Company acknowledges<br>that Cantor has not entered into a Lock-Up Agreement and the securities held by Cantor are not subject to the restrictions on resale<br>set therein. |
| --- | --- |
| 5.14 | Severability. In case any provision in this Agreement<br>shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction<br>involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability<br>of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability<br>of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid,<br>illegal or incapable of being enforced, the parties will substitute for any invalid, illegal or unenforceable provision a suitable and<br>equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal<br>or unenforceable provision. |
| --- | --- |
| 5.15 | Entire Agreement; Restatement. This Agreement and<br>the documents or instruments referred to herein, including any exhibits and schedules attached hereto, which exhibits and schedules are<br>incorporated herein by reference, embody the entire agreement and understanding of the parties hereto in respect of the subject matter<br>contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly<br>set forth or referred to herein or the documents or instruments referred to herein, which collectively supersede all prior agreements<br>and the understandings among the parties with respect to the subject matter contained herein. Upon the Closing, the Original RRA shall<br>no longer be of any force or effect. |
| --- | --- |
[Signature Page Follows]
19
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| COMPANY: | |
|---|---|
| HCM II Acquisition Corp., a Delaware corporation | |
| By: | /s/<br>Shawn Matthews |
| Name: | Shawn Matthews |
| Title: | Chief Executive<br>Officer |
| SPONSOR: | |
| --- | --- |
| HCM INVESTOR HOLDINGS II, LLC, a Cayman Islands limited liability company | |
| By: | /s/<br>Shawn Matthews |
| Name: | Shawn Matthews |
| Title: | Chief Executive<br>Officer |
| CANTOR FITZGERALD & CO. | |
| --- | --- |
| By: | /s/ Sage Kelly |
| Name: | Sage Kelly |
| Title: | Global Head of Investment<br>Banking |
Exhibit A
REGISTRATION RIGHTS AGREEMENTJOINDER
The undersigned, [a Other Sponsor Holder/ a Holder], is executing and delivering this joinder (this “Joinder”) pursuant to the Amended and Restated Registration Rights Agreement, dated as of October 28, 2025 (as the same may hereafter be amended, the “Registration RightsAgreement”), among HCM II Acquisition Corp., a Delaware corporation (the “Company”), and the other Persons named as parties therein. Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Registration Rights Agreement.
By executing and delivering this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof, the undersigned hereby agrees to become a party to, to be bound by and to comply with the 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 as [a Sponsor Holder/ a Holder], and the undersigned’s [shares of Common Stock] shall be included as Registrable Securities under the Registration Rights Agreement to the extent provided therein; provided, however, that the undersigned and its permitted assigns (if any) shall not have any rights as Holders, and the undersigned’s (and its transferees’) [shares of Common Stock] shall not be included as Registrable Securities, for purposes of the Excluded Sections.
For purposes of this Joinder, “Excluded Sections” shall mean [ ].
Accordingly, the undersigned has executed and delivered this Joinder as of the __________ day of __________, 20__.
| Signature of Stockholder |
|---|
| Print Name of Stockholder <br><br>Its: |
| Address: |
Agreed and Accepted as of
____________, 20__
| [●] |
|---|
| By: |
| Name: |
| Its: |
Exhibit B
HCM II Acquisition Corp.[●][●]
[●], 2025
Continental Stock Transfer & Trust Company
1 State Street, 30^th^ Floor
New York, NY 10004
Re: Indemnification in-lieu-of Medallion Signature Guarantee
To whom it may concern:
This letter is in regards to the transfer by [HCM Investor Holdings II, LLC/Name of Sponsor Holder] to [●], of [●] [shares of Common Stock/warrants] of HCM II Acquisition Corp. (the “Company”). Please be advised that the Company authorizes Continental Stock Transfer & Trust Company to process the subject transfer, which includes securities that have been duly endorsed by the registered holder but do not bear a customary medallion signature guarantee. The Company agrees to indemnify Continental Stock Transfer & Trust Company against all losses, liability or costs that may ensue as a result of its processing the above referenced transaction.
I, [●], a duly authorized officer of the Company, have the authority to execute this indemnification on behalf of the Company.
| Very truly yours, |
|---|
| HCM II Acquisition Corp. |
| By: |
| Name: |
| Title: |
Exhibit C
[HCM Investor Holdings II, LLC]
[●][●]
[●], 2025
Terrestrial Energy Inc.
[●]
[●]
Re: Indemnification in-lieu-of Medallion Signature Guarantee
To whom it may concern:
This letter is in regards to the transfer by [HCM Investor Holdings II, LLC] (the “Transferor”) to [●], of [●] [shares of Common Stock/warrants] of HCM II Acquisition Corp. (the “Company”). Please be advised that the Transferor authorizes the Company and Continental Stock Transfer & Trust Company to process the subject transfer, which includes securities that have been duly endorsed by the Transferor but do not bear a customary medallion signature guarantee. The Transferor agrees to indemnify the Company against all losses, liability or costs that may ensue as a result of its processing the above referenced transaction.
I, [●], a duly authorized officer of the Company, have the authority to execute this indemnification on behalf of the Company.
| Very truly yours, |
|---|
| [HCM Investor Holdings II, LLC] |
| By: |
| Name: |
| Title: |
Exhibit 10.5
SPONSORLOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (this “Agreement”), dated as of October 28, 2025, is made and entered into by and among HCM II Acquisition Corp., a Delaware corporation (“SPAC”) (formerly a Cayman Islands exempted company limited by shares, prior to its domestication as a Delaware corporation), and HCM Investor Holdings II LLC, a Cayman Islands limited liability company (the “Sponsor” and, together with any Person who hereafter becomes a party to this Agreement pursuant to Section 2 or Section 7 of this Agreement, the “Securityholders” and each, a “Securityholder”). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Business Combination Agreement (as defined herein).
WHEREAS, simultaneously with the execution and delivery of this Agreement, SPAC and Terrestrial Energy Inc., a Delaware corporation (“TEI”) are consummating a business combination (the “Business Combination”) pursuant to that certain Business Combination Agreement, dated as of March 26, 2025 (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among SPAC, TEI, and HCM II Merger Sub Inc., a Delaware corporation and direct wholly owned subsidiary of SPAC;
WHEREAS, immediately prior to the Business Combination, SPAC transferred by way of continuation to and domesticated as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended, and the Companies Act (As Revised) of the Cayman Islands (the “Domestication”);
WHEREAS, prior to the Domestication, the Sponsor owned (i) 5,750,000 Purchaser Class B Ordinary Shares and (ii) 4,275,000 Purchaser Private Placement Warrants;
WHEREAS, (i) immediately prior to the Domestication, each then issued and outstanding Purchaser Class B Ordinary Share converted automatically, on a one-for-one basis, into one (1) Purchaser Class A Ordinary Share and (ii) immediately following such conversion, in connection with the Domestication, (a) each then issued and outstanding Purchaser Class A Ordinary Share converted automatically, on a one-for-one basis, into one (1) share of Domesticated Purchaser Common Stock and (b) each then issued and outstanding Cayman Purchaser Warrant converted automatically into a Domesticated Purchaser Warrant, following which the Sponsor will own (i) 5,750,000 shares of Domesticated Purchaser Common Stock (the “Lock-Up Shares”) and (ii) 4,275,000 Domesticated Purchaser Warrants (the “Lock-Up Warrants”); and
WHEREAS, in connection with the Business Combination, the parties hereto wish to set forth herein certain understandings between such parties with respect to restrictions on transfer of equity interests in SPAC.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound hereby, hereby agree as follows:
| 1. | Transfer Restrictions. |
|---|---|
| (i) | Subject to the exceptions set forth herein, each Securityholder agrees not to, without the prior written<br>consent of the board of directors of SPAC, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to<br>purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any Lock-Up Shares, (ii) enter into any swap or other<br>arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Lock-Up Shares or (iii)<br>take any action in furtherance of any of the matters described in the foregoing clauses (i) or (ii) (the actions specified in clauses<br>(i)-(iii), collectively, “Transfer”) prior to the date that is the earliest of (a) the twelve (12) month anniversary<br>of the date hereof, and (b) following the 180^th^ day following the date hereof, (i) with respect to 50% of the Lock-Up Shares,<br>the date on which the VWAP equals or exceeds $15.00 per share (subject to equitable adjustment), and (ii) with respect to 100% of the<br>Lock-Up Shares, the date on which the VWAP equals or exceeds $20.00 per share (subject to equitable adjustment) (the “Common<br>Stock Lock-Up Period”).” |
| --- | --- |
| (ii) | Each Securityholder further agrees not to Transfer any Lock-Up Warrants (or any shares of Domesticated<br>Purchaser Common Stock issued or issuable upon the exercise of such Lock-Up Warrants), prior to the date that is the earliest of (a) the<br>twelve (12) month anniversary of the date hereof, and (b) following the 180^th^ day following the date hereof, (i) with respect<br>to 50% of the Lock-Up Warrants, the date on which the VWAP equals or exceeds $15.00 per share (subject to equitable adjustment), and (ii)<br>with respect to 100% of the Lock-Up Warrants, the date on which the VWAP equals or exceeds $20.00 per share (subject to equitable adjustment)<br>(the “Warrant Lock-Up Period” and, each of the Common Stock Lock-Up Period and the Warrant Lock-Up Period, a “Lock-Up<br>Period”). |
| --- | --- |
| (iii) | For the purposes of this Agreement, “Principal Market” means the Nasdaq Capital Market;<br>provided, however, that in the event Domesticated Purchaser’s Common Stock is ever listed or traded on an alternative market, then<br>the “Principal Market” shall mean such alternative market on which Domesticated Purchaser’s Common Stock is then listed<br>or traded. |
| --- | --- |
| (iv) | For the purposes of this Agreement, “VWAP” means, for the Domesticated Purchaser Common<br>Stock for a period of 20 Business Days ending on any given determination date, the dollar volume-weighted average price for the Domesticated<br>Purchaser Common Stock on the Principal Market, for such period, as reported by Bloomberg through its “AQR” function (excluding,<br>for the avoidance of doubt, the opening and closing print of each VWAP purchase date), or any successor thereto. All such determinations<br>shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction<br>during such period. |
| --- | --- |
| 2. | Permitted Transfers. The restrictions set forth in<br>Section 1 shall not apply to: |
| --- | --- |
| (i) | Transfers of any securities other than (a) the Lock-Up Shares, (b) the Lock-Up Warrants, (c) any shares<br>of Domesticated Purchaser Common Stock issued or issuable upon the exercise of such Lock-Up Warrants, (d) any securities that may be acquired<br>by Securityholders upon the exercise, conversion or redemption of any of the securities described in clauses (a), (b) or (c), and (e)<br>any other equity security of SPAC issued or issuable with respect to any securities referenced in clauses (a), (b), (c) or (d) above by<br>way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation, spin-off,<br>reorganization or similar transaction; |
| --- | --- |
2
| (ii) | Transfers to SPAC’s officers or directors, any Affiliate or family member of any of SPAC’s<br>officers or directors, any members or partners of the Sponsor or their Affiliates, any Affiliates of the Sponsor, or any employees of<br>such Affiliates; |
|---|---|
| (iii) | In the case of an individual, Transfers to any Affiliates or family members of the Securityholder; |
| --- | --- |
| (iv) | Transfers to any investment funds or vehicles controlled or managed by the Securityholder or any of its<br>Affiliates; |
| --- | --- |
| (v) | Transfers by gift to a trust, the beneficiary of which is a Person to whom a Transfer would be permitted<br>under Section 2(iii), or to a charitable organization; |
| --- | --- |
| (vi) | in the case of an individual, Transfers by virtue of laws of descent and distribution upon death of such<br>individual; |
| --- | --- |
| (vii) | in the case of an individual, Transfers pursuant to a qualified domestic relations order; |
| --- | --- |
| (viii) | Transfers to a nominee or custodian of a Person to whom a Transfer would be permitted under Section<br>2(iii); |
| --- | --- |
| (ix) | by private sales or transfers made in connection with any forward purchase agreement or similar arrangement<br>at prices no greater than the price at which the Lock-Up Shares or Lock-Up Warrants (as applicable) were originally purchased; |
| --- | --- |
| (x) | Transfers in connection with any legal, regulatory or other order; |
| --- | --- |
| (xi) | in the case of an entity that is a trust, Transfers to a trustor or beneficiary of the trust or to the<br>estate of a beneficiary of such trust; |
| --- | --- |
| (xii) | in the case of an entity, Transfers as part of a distribution to members, partners, shareholders or equityholders<br>of the Securityholder; |
| --- | --- |
| (xiii) | in the case of an entity, Transfers by virtue of the laws of the state of the entity’s organization<br>and the entity’s organizational documents upon dissolution of the entity; |
| --- | --- |
| (xiv) | the exercise of stock options or warrants to purchase shares of Domesticated Purchaser Common Stock or<br>the vesting of stock awards relating to shares of Domesticated Purchaser Common Stock and any related Transfer of shares of Domesticated<br>Purchaser Common Stock in connection therewith (x) deemed to occur upon the “cashless” or “net” exercise of such<br>options or warrants or (y) for the purpose of paying the exercise price of such options or warrants, it being understood that all shares<br>of Domesticated Purchaser Common Stock received upon such exercise, vesting or transfer will remain subject to the restrictions of this<br>Agreement during the Lock-Up Period; |
| --- | --- |
3
| (xv) | Transfers to SPAC pursuant to any contractual arrangement in effect as of the date hereof that provides<br>for the repurchase by SPAC or forfeiture of shares of Domesticated Purchaser Common Stock or other securities convertible into, or exercisable,<br>redeemable or exchangeable for, Domesticated Purchaser Common Stock in connection with the termination of the Securityholder’s service<br>to SPAC or its Subsidiaries (including, for the avoidance of doubt, TEI); |
|---|---|
| (xvi) | the entry, by the Securityholder, at any time after the closing of the Business Combination, of any trading<br>plan providing for the sale of shares of Domesticated Purchaser Common Stock by the Securityholder, which trading plan meets the requirements<br>of Rule 10b5-1(c) under the Exchange Act; provided, however, that such plan does not provide for, or permit, the sale of<br>any shares of Domesticated Purchaser Common Stock during any applicable Lock-Up Period and no public announcement or filing is voluntarily<br>made or required regarding such plan during any applicable Lock-Up Period; |
| --- | --- |
| (xvii) | Transfers in the event of the completion of a liquidation, merger, stock exchange, reorganization or other<br>similar transaction that results in all of SPAC’s securityholders having the right to exchange their shares of Domesticated Purchaser<br>Common Stock for cash, securities or other property; and |
| --- | --- |
| (xviii) | Transfers to satisfy any U.S. federal, state, or local income tax obligations of a Securityholder (or<br>its direct or indirect owners) arising from a change in the U.S. Internal Revenue Code of 1986, as amended (the “Code”),<br>or the U.S. Treasury Regulations promulgated thereunder (the “Regulations”) after the date on which the Business Combination<br>Agreement was executed by the parties, and such change prevents the Domestication or the Merger from qualifying as a “reorganization”<br>pursuant to Section 368 of the Code (and the Domestication and the Merger do not qualify for similar tax-free treatment pursuant to any<br>successor or other provision of the Code or Regulations taking into account such changes), in each case solely and to the extent necessary<br>to cover any tax liability as a direct result of the transaction. |
| --- | --- |
provided, however, that (A) in the case of clauses (ii) through (xii), as a prerequisite to such Transfer, such permitted transferee(s) must enter into joinder to this Agreement, substantially in the form of Exhibit A hereto, in order to become a “Securityholder” for purposes of this Agreement. For purposes of this Section 2, “family member” shall mean a spouse, domestic partner, child (including by adoption), father, mother, brother or sister of the Securityholder, and lineal descendant (including by adoption) of the Securityholder or of any of the foregoing persons.
4
| 3. | Termination. This Agreement shall terminate upon the<br>earlier of (i) the expiration of the Common Stock Lock-Up Period, (ii) the closing of a merger, liquidation, stock exchange, reorganization<br>or other similar transaction after the date hereof that results in all of the public stockholders of SPAC having the right to exchange<br>their shares of Domesticated Purchaser Common Stock for cash securities or other property and (iii) the liquidation of SPAC. |
|---|---|
| 4. | Prohibited Transfers. In furtherance of the foregoing,<br>SPAC, and any duly appointed transfer agent for the registration or transfer of the securities described therein, are hereby authorized<br>to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Agreement. |
| --- | --- |
| 5. | Amendment. This Agreement may be amended, supplemented<br>or modified only by execution of a written instrument signed by SPAC and the Securityholders holding a majority of the aggregate number<br>of shares of Domesticated Purchaser Common Stock then held by all Securityholders as to which this Agreement has not been terminated,<br>executed in the same manner as this Agreement and which makes reference to this Agreement. |
| --- | --- |
| 6. | Entire Agreement. This Agreement and the documents<br>or instruments referred to herein embody the entire agreement and understanding of the parties hereto in respect of the subject matter<br>contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly<br>set forth or referred to herein or the documents or instruments referred to herein, which collectively supersede all prior agreements<br>and the understandings among the parties hereto with respect to the subject matter contained herein. |
| --- | --- |
| 7. | Binding Effect; Assignment. This Agreement and all<br>of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted<br>assigns. This Agreement shall not be assigned by operation of Law or otherwise without the prior written consent of the parties hereto,<br>and any assignment without such consent shall be null and void; provided that no such assignment shall relieve the assigning party<br>of its obligations hereunder. |
| --- | --- |
| 8. | Governing Law. This Agreement, and all claims or causes<br>of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and<br>construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of Laws to<br>the extent such principles or rules would require or permit the application of Laws of another jurisdiction. |
| --- | --- |
| 9. | Jurisdiction. Any Legal Proceeding based upon, arising<br>out of or related to this Agreement or the transactions contemplated hereby must be brought in the Court of Chancery of the State of<br>Delaware (or, to the extent such court does not have jurisdiction, in the United States District Court for the District of Delaware and<br>to the extent such court does not have subject matter jurisdiction, the Superior Court of the State of Delaware), and each of the parties<br>irrevocably (i) submits to the exclusive jurisdiction of each such court in any such Legal Proceeding, (ii) waives any objection it may<br>now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii) agrees that all claims in respect of the Legal<br>Proceeding shall be heard and determined only in any such court, and (iv) agrees not to bring any Legal Proceeding arising out of or<br>relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect<br>the right of any party to serve process in any manner permitted by Law or to commence Legal Proceedings or otherwise proceed against<br>any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Legal Proceeding, suit or proceeding brought<br>pursuant to this Section 9. |
| --- | --- |
5
| 10. | WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND<br>AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED<br>AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY<br>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<br>OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. |
|---|---|
| 11. | Counterparts. This Agreement (and any joinder to this<br>Agreement) may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by<br>the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which<br>taken together shall constitute one and the same agreement. |
| --- | --- |
| 12. | Severability. In case any provision in this Agreement<br>shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction<br>involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability<br>of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability<br>of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid,<br>illegal or incapable of being enforced, the parties will substitute for any invalid, illegal or unenforceable provision a suitable and<br>equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal<br>or unenforceable provision. |
| --- | --- |
| 13. | Liability. The liability of any Securityholder hereunder<br>is several (and not joint). Notwithstanding any other provision of this Agreement, in no event will any Securityholder be liable for<br>any other Securityholder’s breach of such other Securityholder’s obligations under this Agreement. |
| --- | --- |
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6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| SPAC: | |
|---|---|
| HCM II ACQUISITION CORP. | |
| By: | /s/ Shawn Matthews |
| Name: | Shawn Matthews |
| Title: | Chief Executive Officer |
| SPONSOR: | |
|---|---|
| HCM Investor Holdings II LLC | |
| By: | /s/ Shawn Matthews |
| Name: | Shawn Matthews |
| Title: | Chief Executive Officer |
EXHIBIT A
JOINDER TO LOCKUP AGREEMENT
[●], 20__
Reference is made to the Lockup Agreement, dated as of [●], by and among [Entity Name] (the “Company”) and the Securityholders (as defined therein) from time to time party thereto (as amended, supplemented or otherwise modified from time to time, the “Lockup Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Lockup Agreement.
Each of the Company and the undersigned holder of equity interests in the Company (the “New Securityholder”) agrees that this Joinder to the Lockup Agreement (this “Joinder”) is being executed and delivered for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.
The New Securityholder hereby agrees to and does become party to the Lockup Agreement as a Securityholder. This Joinder shall serve as a counterpart signature page to the Lockup Agreement and by executing below, the New Securityholder is deemed to have executed the Lockup Agreement with the same force and effect as if originally named a party thereto.
This Joinder may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the undersigned have duly executed this Joinder as of the date first set forth above.
| **[**ENTITY NAME] |
|---|
| By: |
| Name: |
| Title: |
| new securityholder: |
| [●] |
| By: |
| Name: |
| Title: |
Exhibit 10.7
SECOND AMENDED AND RESTATED EXCHANGE AND SUPPORT AGREEMENT
THIS AGREEMENT is made this 28^th^ day of October, 2025 among HCM II Acquisition Corp., a Delaware corporation which will change its name to “Terrestrial Energy Inc.” on or around October 28, 2025 (“ParentCo”), Terrestrial Energy Canada (Call) Inc., a corporation existing under the laws of the Province of Ontario (“CallCo”), Terrestrial Energy Canada (Exchange) Inc., a corporation existing under the laws of the Province of Ontario (the “Corporation”), and, solely for purposes of Section 6.13, Terrestrial Energy Inc., a Delaware corporation formerly known as “Terrestrial Energy Delaware Inc.”, which will change its name to “Terrestrial Energy Development Inc.” on or around October 28, 2025 (“DelawareCo”).
RECITALS:
| 1. | In connection with an arrangement agreement (the “Arrangement Agreement”) dated December<br>13, 2023 among Terrestrial Energy (Ontario) Inc. (f.k.a. Terrestrial Energy Inc.), DelawareCo, CallCo and the Corporation, the Corporation<br>issued certain classes/series of exchangeable shares (the “Original Exchangeable Securities”) to the shareholders of<br>Terrestrial Energy Inc. pursuant to an arrangement under Section 182 of the Business Corporations Act (Ontario) (the “Arrangement”)<br>on the terms and conditions set out in the Plan of Arrangement (as defined in the Arrangement Agreement). |
|---|---|
| 2. | Pursuant to the Arrangement Agreement, DelawareCo, CallCo and the Corporation entered into the exchange<br>and support agreement dated April 5, 2025 setting out their understanding with respect to certain rights and obligations in connection<br>with the exchange of Original Exchangeable Securities of the Corporation for DelawareCo Shares. |
| --- | --- |
| 3. | DelawareCo, CallCo and the Corporation subsequently entered into the amended and restated exchange and<br>support agreement dated October 24, 2025 (the “First Amended and Restated Agreement”) amending the terms and conditions<br>applicable to the exchange of the Exchangeable Shares following the exchange of the Original Exchangeable Securities for Exchangeable<br>Shares pursuant to the articles of amendment dated October 24, 2025 amending the Articles of Arrangement of the Corporation. |
| --- | --- |
| 4. | HCM II Merger Sub (the “Merger Sub”) merged with DelawareCo (the “Merger”)<br>on October 28^th^, 2025 pursuant to the business combination agreement entered into among DelawareCo, ParentCo and the Merger<br>Sub dated March 26, 2025 whereby DelawareCo, as the post-Merger, successor entity, became a wholly owned subsidiary of ParentCo. |
| --- | --- |
| 5. | Prior to the closing of the Merger, the board of directors of DelawareCo designated the Merger a Board<br>Designated Sale Transaction and, as a result, ParentCo is deemed to be the<br><br>“ParentCo Resulting Issuer”, as defined in, and for the purposes of, the Exchangeable Share Provisions. |
| --- | --- |
| 6. | In connection with the Merger, the Parties (as defined herein) wish to amend and restate the terms and<br>conditions applicable to the exchange of the Exchangeable Shares in order to remove DelawareCo as a party to the agreement and for ParentCo<br>to become a party to the agreement and assume the appropriate representations, warranties and covenants relating to the exchange of the<br>Exchangeable Shares for ParentCo Shares. |
| --- | --- |
In consideration of the foregoing and the mutual agreements contained herein and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged), the parties hereby agree as follows:
Article 1
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions
Unless indicated otherwise, where used in this Agreement, capitalized terms used but not defined shall have the meanings specified in the Exchangeable Share Provisions as of the date hereof, and the following terms shall have the following meanings (and grammatical variations of such terms shall have corresponding meanings):
“Agreement” means this amended and restated exchange and support agreement, including all schedules, and all amendments or restatements as permitted, and references to “Article”, “Section” or “Schedule” mean the specified Article, Section or Schedule of this Agreement.
“Automatic Exchange Right” means the benefit associated with the obligation to effect the automatic exchange of Exchangeable Shares pursuant to Section 3.2.
“Corporation Articles” means the Articles of Arrangement of the Corporation, as amended by the articles of amendment of the Corporation dated October 24, 2025, as may be amended or restated from time to time.
“DelawareCo” has the meaning given in the Recitals.
“Exchange Right” has the meaning given to it in Section 2.1.
“Exchange Right Consideration” means, in respect of each Exchangeable Share:
| (a) | one Corresponding Share (as adjusted for Stock Splits, and if applicable, as adjusted for the Share Consideration<br>Ratio); and |
|---|---|
| (b) | any Outstanding Dividend Amount, which shall be paid in the same form of the dividend or distribution<br>that creates the Outstanding Dividend Amount, on such Exchangeable Share on the date of exchange. |
| --- | --- |
“Exchangeable Share Provisions” means the rights, privileges, restrictions and conditions attaching to the Exchangeable Shares as set out in the Corporation Articles.
“Holders” means, collectively the holders of the Exchangeable Shares and each is referred to herein as a “Holder”.
“Immediate Family” shall mean any child, stepchild, grandchild or other lineal descendant, any parent, stepparent, grandparent or other ancestor, any spouse, former spouse, sibling, niece, nephew, uncle, aunt, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, or any Spousal Equivalent.
“Law” means any federal, state, provincial, municipal, local or foreign statute, law, by-law, ordinance, regulation, rule, code, order or rule of or duty under common law, including any statute, law, by-law, ordinance, regulation, rule, code, order or rule of or duty under common law in Canada and in any province or territory of Canada.
“Merger Sub” has the meaning given in the Recitals.
“Original Agreement” has the meaning given in the Recitals.
“Original Exchangeable Securities” has the meaning given in the Recitals.
“ParentCo” has the meaning given in the Recitals.
“ParentCo Articles” means the articles of incorporation of ParentCo, as may be amended from time to time.
“ParentCo By-Laws” means the by-laws of ParentCo, as may be amended, or restated from time to time.
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“ParentCo Liquidation Event” has the meaning given to it in Section 3.1.
“ParentCo Liquidation EventRecord Date” means the record date or other relevant date for determining the eligibility of holders of ParentCo Shares to participate as shareholders in a ParentCo Liquidation Event.
“Parties” means ParentCo, DelawareCo, the Corporation and CallCo; and “Party” means any one of them.
“Permitted Subsidiary” means a wholly-owned Subsidiary of ParentCo, other than the Corporation and CallCo, designated by ParentCo from time to time: (a) to exercise the Liquidation Call Right, Retraction Call Right or ParentCo Redemption Call Right; or (b) to be subject to the obligations of any Exchange Right exercised by the Holder.
“Permitted Transfer” means (a) any Transfer by a Holder of any or all of such Holder’s Exchangeable Shares to ParentCo, CallCo, or the Corporation; (b) any Transfer by a Holder of any such Holder’s Exchangeable Shares to such Holder’s Immediate Family, a trust for the benefit of such Holder or such Holder’s Immediate Family, or a partnership, limited liability company, corporation or other entity in which the Holder is the sole owner and sole Holder of voting securities; (c) any Transfer by a Holder of any or all of such Holder’s Exchangeable Shares effected pursuant to such Holder’s will or laws of intestate succession; (d) if a Holder is a partnership, limited liability company, or corporation, any Transfer by such Holder of any or all of such Holder’s Exchangeable Shares to the partners, members, retired partners, retired members, shareholders, and/or Affiliates of such Holder; provided, that no Holder may Transfer any of such Holder’s Exchangeable Shares to a Special Purpose Entity pursuant to this subsection (d); and/or (e) any Transfer of Exchangeable Shares approved by the Board of Directors as a Permitted Transfer.
“Special Purpose Entity” shall mean an entity that holds or would hold only Exchangeable Shares or has or would have a class or series of security holders with beneficial interests primarily in shares of capital stock of ParentCo (including for such purpose an entity that holds cash and/or cash equivalents intended to purchase shares of capital stock of the ParentCo).
“Spousal Equivalent” shall mean an individual who: (a) is in an exclusive, continuous, committed relationship with the relevant Holder, has been in that relationship for the twelve (12) months prior to the relevant date and intends to be in that relationship indefinitely; (b) has no such relationship with any other person and is not married to any other person; (c) shares a principal residence with the relevant Holder; (d) is at least eighteen (18) years of age and legally and mentally competent to consent to contract; (e) is not related by blood to the relevant Holder to a degree of kinship that would prevent marriage from being recognized under the law of the state in which the individual and the relevant Holder reside; and (f) is jointly responsible with the relevant Holder for each other’s common welfare and financial obligations.
“Subsidiary” of any Person means a Person controlled by:
| (a) | such first Person; |
|---|---|
| (b) | such first Person and one or more Persons each of which is controlled by such first Person; or |
| --- | --- |
| (c) | two or more Persons each of which is controlled by such first Person, |
| --- | --- |
and includes any indirect subsidiaries.
“Transfer” means any sale, transfer, exchange, assignment, gift, bequest, disposition, mortgage, charge, pledge, encumbrance, grant of a security interest or other arrangement by which possession, legal title or beneficial ownership passes from one Person to another, or to the same Person in a different capacity, whether or not voluntarily and whether or not for value, and any agreement to effect any of the above, but does not include the exchange or redemption of any Exchangeable Shares under the terms of this Agreement or the Corporation Articles.
“U.S. Securities Act” means the United States Securities Act of 1933, as amended.
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Section 1.2 Rules of Interpretation
In this Agreement:
| (a) | Consent - Whenever a provision of this Agreement requires an approval or consent and such approval<br>or consent is not delivered within the applicable time limit, then, unless otherwise specified, the party whose consent or approval is<br>required will be conclusively deemed to have given its approval or consent. |
|---|---|
| (b) | Currency - Unless otherwise specified, all references to money amounts are to the lawful currency<br>of the United States of America. |
| --- | --- |
| (c) | Governing Law - This Agreement is a contract made under and is governed by and construed in accordance<br>with the Laws of the Province of Ontario and the federal Laws of Canada applicable in the Province of Ontario. |
| --- | --- |
| (d) | Headings - Headings of Articles and Sections are inserted for convenience of reference only and<br>do not affect the construction or interpretation of this Agreement. |
| --- | --- |
| (e) | Including - Where the word “including” or “includes” is used in this Agreement,<br>it means “including (or includes) without limitation”. |
| --- | --- |
| (f) | Number and Gender — Unless the context otherwise requires, words importing the singular include<br>the plural and vice versa and words importing gender include all genders. |
| --- | --- |
| (g) | Severability — If any provision of this Agreement or its application to any Party or circumstance<br>is restricted, prohibited or unenforceable, such provision will be ineffective only to the extent of such restriction, prohibition or<br>unenforceability without invalidating the remaining provisions of this Agreement and without affecting the application of such provision<br>to other Parties or circumstances. |
| --- | --- |
| (h) | Statutory references – A reference to a statute includes all regulations made pursuant to<br>such statute and, unless otherwise specified, the provisions of any statute or regulation that amends, supplements or supersedes any such<br>statute or any such regulation. |
| --- | --- |
| (i) | Time — Time is of the essence in the performance of the parties’ respective obligations. |
| --- | --- |
| (j) | Time Periods - Unless otherwise specified, time periods within or following which any payment is<br>to be made or act is to be done are calculated by excluding the day on which the period commences and including the day on which the period<br>ends and by extending the period to the next Business Day if the last day of the period is not a Business Day. |
| --- | --- |
Section 1.3 Entire Agreement
This Agreement, together with the ParentCo By-Laws, the Corporation Articles and the ParentCo Articles, as each may be amended in accordance with its terms, constitutes the entire agreement between the Parties and sets out all the covenants, promises, warranties, representations, conditions, understandings and agreements between the Parties pertaining to the subject matter of this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written. There are no covenants, promises, warranties, representations, conditions, understandings or other agreements, other than those set forth in the Partnership Agreement, oral or written, express, implied or collateral between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement, the ParentCo By-Laws, the Corporation Articles and the ParentCo Articles.
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Article 2
EXCHANGE RIGHT
Section 2.1 Grant of Exchange Right
ParentCo grants to each of the Holders the right (the “Exchange Right”) to require ParentCo to, or at the option of ParentCo, to cause CallCo, or a Permitted Subsidiary, to purchase from each of the Holders all of the Exchangeable Shares held by such Holder on the terms set forth herein for the consideration described in Section 2.3. The Exchange Right may be exercised at any time and from time to time upon the occurrence and during the continuance of:
| (a) | the failure of the Corporation to redeem all the outstanding Exchangeable Shares following a Liquidation<br>Event as provided in the Exchangeable Share Provisions; |
|---|---|
| (b) | the failure of the Corporation to redeem all the outstanding Exchangeable Shares held by the Holder on<br>the ParentCo Redemption Date as provided in the Exchangeable Share Provisions; |
| --- | --- |
| (c) | the failure of the Corporation to redeem the Retracted Shares on the Retraction Date as provided in the<br>Exchangeable Share Provisions; |
| --- | --- |
| (d) | the failure of CallCo to exchange all or any part of the Exchangeable Shares held by the Holder following<br>exercise of the Retraction Call Right as provided in the Exchangeable Share Provisions; |
| --- | --- |
| (e) | the failure of CallCo to exchange all or any part of the Exchangeable Shares held by the Holder following<br>exercise of the ParentCo Redemption Call Right as provided in the Exchangeable Share Provisions; or |
| --- | --- |
| (f) | the failure of CallCo to exchange all or any part of the Exchangeable Shares held by the Holder following<br>exercise of the Liquidation Call Right as provided in the Exchangeable Share Provisions. |
| --- | --- |
Section 2.2 Exercise of Exchange Right
To exercise the Exchange Right, a Holder must deliver to ParentCo in person or by certified or registered mail, the certificates (along with duly executed stock powers of attorney) representing the Exchangeable Shares to be exchanged, together with a written notice stating:
| (a) | that the Holder is exercising the Exchange Right; |
|---|---|
| (b) | the number and class/series of Exchangeable Shares in respect of which the Exchange Right is being exercised; |
| --- | --- |
| (c) | that the Holder has good title to and owns all the Exchangeable Shares free and clear of all encumbrances,<br>other than under the Corporation Articles or applicable Law; |
| --- | --- |
| (d) | whether the Holder is a resident of Canada or “Canadian partnership” for the purposes of the<br>Income Tax Act (Canada); |
| --- | --- |
| (e) | the names of the registered holder(s) of the ParentCo Shares to be reflected on the share certificates<br>representing such shares immediately following the exercise of the Exchange Right and the applicable share registers of ParentCo; and |
| --- | --- |
| (f) | the name and address of the Person to whom the share certificates referred to above is to be delivered. |
| --- | --- |
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Section 2.3 Delivery of Exchange Right Consideration
ParentCo (or if applicable, CallCo or a Permitted Subsidiary) will, as soon as reasonably practical and, in any event, no later than fifteen Business Days following receipt of the notice of exercise of the Exchange Right and the certificates (along with duly executed stock powers of attorney) representing the Exchangeable Shares to be exchanged, along with any other documentation reasonably required by ParentCo, deliver or cause to be delivered to the Holder (or any other Persons properly designated by the Holder) the Exchange Right Consideration for each Exchangeable Share in respect of which the Exchange Right is exercised.
Section 2.4 Effect of Exercise
Immediately upon receipt by ParentCo of the notice of the exercise of the Exchange Right and the certificates (along with duly executed stock powers of attorney) representing the Exchangeable Shares to be exchanged:
| (a) | the exchange is deemed to have occurred; |
|---|---|
| (b) | the Holder is deemed to have transferred to CallCo (or if applicable, a Permitted Subsidiary) all of its<br>interest in the Exchangeable Shares; and |
| --- | --- |
| (c) | the Holder is deemed to be the holder of the ParentCo Shares and other consideration comprising the Exchange<br>Right Consideration. |
| --- | --- |
Section 2.5 Deemed Exercise of Exchange Right Subsequent to Retraction
If a Holder requires that the Corporation redeem the Holder’s Retracted Shares and is notified by the Corporation that the Corporation is not permitted, as a result of solvency requirements or other provisions of applicable Law, to redeem all Retracted Shares, then, if the Retraction Call Right has not been exercised with respect to the Retracted Shares, the Retraction Request will constitute the exercise of the Exchange Right with respect to those Retracted Shares that the Corporation is unable to redeem. In any such event, the Corporation will immediately notify the Holder of the prohibition against the Corporation redeeming all of the Retracted Shares, and will immediately notify ParentCo of the exercise of the Exchange Right (which notice will constitute the notice of exercise of the Exchange Right for purposes of Section 2.2).
Section 2.6 Conditional Exercise of ParentCo Redemption Call Right upon a Sale Transaction or a Qualified Public Offering
ParentCo and CallCo will use all commercially reasonable efforts to ensure that any exercise of the ParentCo Redemption Call Right as provided in the Exchangeable Share Provisions is effective only immediately prior to, and is conditional upon, the closing of a ParentCo Sale Transaction.
Article 3
AUTOMATIC EXCHANGE RIGHT
Section 3.1 Notice of ParentCo Liquidation Event
ParentCo will give each Holder and the Corporation written notice of each of the following events (each, a “ParentCo Liquidation Event”) at the time set forth below:
| (a) | in the event of any determination by the board of directors of ParentCo to institute voluntary liquidation,<br>dissolution or winding-up proceedings with respect to ParentCo or to effect any other distribution of assets of ParentCo among its shareholders<br>for the purpose of winding up its affairs, at least ten Business Days prior to the proposed effective date of such liquidation, dissolution,<br>winding-up or other distribution; and |
|---|---|
| (b) | as soon as practicable following the earlier of (A) receipt by ParentCo of notice of, and (B) ParentCo<br>otherwise becoming aware of, any instituted claim, suit, petition or other proceedings with respect to the involuntary liquidation, dissolution<br>or winding-up of ParentCo or to effect any other distribution of assets of ParentCo among its shareholders for the purpose of winding<br>up its affairs, in each case where ParentCo has failed to contest in good faith any such proceeding commenced in respect of ParentCo within<br>ten Business Days of becoming aware thereof. |
| --- | --- |
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Section 3.2 Automatic Exchange
Not later than the fifth Business Day prior to the ParentCo Liquidation Event Record Date:
| (a) | ParentCo (or if designated by ParentCo, CallCo or a Permitted Subsidiary) will deliver or cause to be<br>delivered to each Holder the Exchange Right Consideration for each Exchangeable Share held by such Holder; |
|---|---|
| (b) | each Holder will be deemed to have transferred to ParentCo, CallCo or a Permitted Subsidiary, as set out<br>in the notice delivered pursuant to Section 3.1, as the case may be, all of the Holder’s interest in the Exchangeable Shares<br>(which shall be free and clear of all liens and encumbrances, other than under the Corporation Articles or applicable Law) and will cease<br>to be a holder of those Exchangeable Shares; |
| --- | --- |
| (c) | each Holder will be deemed to be the holder of ParentCo Shares and other consideration comprising the<br>Exchange Right Consideration; and |
| --- | --- |
| (d) | the certificates held by each Holder previously representing the Exchangeable Shares will be deemed to<br>represent ParentCo Shares and such other consideration comprising Exchange Right Consideration, |
| --- | --- |
with each such action or delivery to be null and void if the ParentCo Liquidation Event does not actually occur.
Section 3.3 Certificates
Upon the request of any Holder and the evidence of surrender by such Holder of Exchangeable Share certificates (along with duly executed stock powers of attorney) that represent the Holder’s Exchangeable Shares, as provided in Section 3.2, ParentCo will deliver evidence to such Holder of the issuance of share certificates representing shares of ParentCo Shares issued upon exchange of the Exchangeable Shares registered in the name of such Holder.
Article 4
ECONOMIC EQUIVALENCE
Section 4.1 Economic Equivalence — ParentCo Obligations
ParentCo will not, without the written approval of the Holders of two-thirds of the outstanding Exchangeable Shares (excluding any such Exchangeable Shares held by ParentCo, CallCo or a Permitted Subsidiary):
| (a) | declare or make a dividend or distribution (other a dividend or distribution consisting of an issuance<br>referred to in Section 4.1(b)) on the Corresponding Shares unless the Corporation simultaneously declares, pays or makes, as the<br>case may be, the same per ParentCo Share (as adjusted for the Share Consideration Ratio) dividend or distribution on the Corresponding<br>Exchangeable Shares as provided in Section 2.1 of the Exchangeable Share Provisions in U.S. dollars, or the Canadian Dollar Equivalent<br>(at the discretion of the Board of Directors); |
|---|---|
| (b) | make a dividend or distribution on the Corresponding Shares to be made in Corresponding Shares, unless<br>a corresponding and contemporaneous and economically equivalent (as determined in good faith by the Board of Directors) subdivision of<br>the outstanding Corresponding Exchangeable Shares is made (as provided in Section 2.1 of the Exchangeable Share Provisions); |
| --- | --- |
| (c) | make a distribution on the Corresponding Shares in property (including, without limitation, rights, options<br>or warrants to purchase Corresponding Shares) other than cash or Corresponding Shares, unless the Corporation simultaneously declares,<br>pays or makes, as the case may be, the same or economically equivalent (determined in accordance with the Exchangeable Share Provisions)<br>to the type and amount of property declared as a dividend or other distribution by way of an in specie dividend on the Corresponding<br>Exchangeable Shares (as provided in Section 2.1 of the Exchangeable Share Provisions); |
| --- | --- |
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| (d) | effect: |
|---|---|
| (i) | a subdivision or change of the outstanding Corresponding Shares into a greater number of Corresponding<br>Shares; |
| --- | --- |
| (ii) | a reduction, combination, consolidation or change of the outstanding Corresponding Shares into a lesser<br>number of Corresponding Shares; |
| --- | --- |
| (iii) | a reclassification or other change of Corresponding Shares; or |
| --- | --- |
| (iv) | an amalgamation, merger, reorganization or other transaction affecting the Corresponding Shares, |
| --- | --- |
unless the same or an economically equivalent change (determined in accordance with the Exchangeable Share Provisions) is simultaneously made to the Corresponding Exchangeable Shares (if any such change is necessary to retain economic equivalence), as determined in good faith by the Board of Directors.
Section 4.2 Covenants Regarding Exchangeable Shares
ParentCo and the Corporation will:
| (a) | use commercially reasonable efforts to cause the declaration date, record date and payment date for a<br>dividend on the Exchangeable Shares to be the same as the declaration date, record date and payment date, respectively, for the corresponding<br>distribution on ParentCo Shares; |
|---|---|
| (b) | use commercially reasonable efforts to advise each Holder sufficiently in advance of any ParentCo Sale<br>Transaction or Liquidation Event to allow the Holder to exercise its rights of retraction pursuant to the Exchangeable Share Provisions<br>to receive ParentCo Shares immediately prior to any such event or date; |
| --- | --- |
| (c) | duly and timely perform all of their respective obligations, and take all actions and do all things as<br>are necessary or desirable to enable and permit each other to perform their respective obligations under the Exchangeable Share Provisions<br>and this Agreement; and |
| --- | --- |
| (d) | use commercially reasonable efforts to cause any redemption of Exchangeable Shares of a Holder in connection<br>with a ParentCo Sale Transaction, in each case if requested by a Holder, to be effective only immediately before consummation of, and<br>conditional upon, the closing of the ParentCo Sale Transaction. |
| --- | --- |
Section 4.3 Additional ParentCo Covenants
ParentCo will not exercise its vote as a shareholder, nor allow any direct or indirect Subsidiary to exercise its own vote as a shareholder, to initiate the voluntary liquidation, dissolution or winding-up of the Corporation nor take any action or omit to take any action that is designed to result in the liquidation, dissolution or winding-up of the Corporation, other than in circumstances that would enable the Corporation to fulfill its obligations under this Agreement or pursuant to the Exchangeable Share Provisions.
Section 4.4 Reservation of ParentCo Shares
ParentCo will at all times keep available, free from pre-emptive and other rights (other than in connection with the issuance of the Exchangeable Shares or as otherwise set out in the ParentCo By-Laws), that number of ParentCo Shares:
| (a) | as is equal to the number of Exchangeable Shares issued and outstanding from time to time (as adjusted<br>for the Share Consideration Ratio and as adjusted for Stock Splits); and |
|---|---|
| (b) | as may be required to enable each of ParentCo, CallCo and the Corporation to meet its obligations under<br>the Exchangeable Share Provisions and this Agreement and under any other security or commitment pursuant to which ParentCo may be required<br>to issue ParentCo Shares. |
| --- | --- |
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Section 4.5 Delivery of ParentCo Shares
| (1) | Upon notice from the Corporation (or if applicable, CallCo<br>or a Permitted Subsidiary) of any event that requires the Corporation or CallCo or ParentCo (or if applicable, a Permitted Subsidiary),<br>or upon the occurrence of any event that requires ParentCo to deliver ParentCo Shares to a Holder, ParentCo will, as soon as practicable,<br>and in any event within fifteen Business Days (or such earlier date as is required in connection with a ParentCo Sale Transaction or<br>ParentCo Liquidation Event), following receipt of any documentation reasonably required by ParentCo, issue and deliver (or cause to be<br>issued and delivered) evidence of the issuance of the requisite number of fully paid and nonassessable ParentCo Shares free and clear<br>of all liens, encumbrances, security interests or other adverse claims or interests, to such former Holder of the surrendered Exchangeable<br>Shares, as the Corporation, ParentCo or CallCo (or if applicable, a Permitted Subsidiary) directs or as required by the Exchangeable<br>Share Provisions or this Agreement. |
|---|---|
| (2) | Each Holder acknowledges and agrees that notwithstanding<br>anything to the contrary contained herein or in the Exchangeable Share Provisions, ParentCo will not be required to issue fractional<br>ParentCo Shares to a Holder, in satisfaction of its obligations hereunder. If any fractional interest in a ParentCo Share would be deliverable<br>upon the exercise of the Exchange Right or the Automatic Exchange Right, as applicable, the number of ParentCo Shares issuable shall<br>be rounded down to the nearest whole number without payment in respect of such fractional share. |
| --- | --- |
Section 4.6 Provision of Funds
ParentCo shall provide, or cause to be provided, to the Corporation, CallCo and any Permitted Subsidiary with sufficient funds, assets or other property as is necessary to enable CallCo or the Corporation or such Permitted Subsidiary, as the case may be, to pay or otherwise satisfy its respective obligations under the Exchangeable Share Provisions and this Agreement.
Section 4.7 Ownership of Common Shares
Except (a) in connection with a transaction that constitutes a ParentCo Sale Transaction, or (b) with the written approval of the Holders of two-thirds of the outstanding Exchangeable Shares (excluding any Exchangeable Shares held by ParentCo, CallCo or a Permitted Subsidiary) and the prior written approval of the Corporation and ParentCo, ParentCo will control, directly or indirectly, all issued and outstanding Common Shares and all issued and outstanding shares of CallCo.
Section 4.8 Grant of Call Rights
Pursuant to the Exchangeable Share Provisions, CallCo (or if assigned by CallCo, an Affiliate) has the right to exercise the Liquidation Call Right, the ParentCo Redemption Call Right and the Retraction Call Right.
Article 5
TAX MATTERS
Section 5.1 Right to Withhold
ParentCo, CallCo, the Corporation and any Permitted Subsidiary may deduct and withhold from any consideration otherwise payable to a Holder such amounts as ParentCo, CallCo, the Corporation and any Permitted Subsidiary is required or permitted to deduct and withhold with respect to such payment under the IncomeTax Act (Canada) or any provision of federal, provincial, local or foreign tax Law, in each case as amended or succeeded. To the extent that amounts are so withheld, such withheld amounts are to be treated for all purposes as having been paid to a Holder of the shares in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority. Each Holder hereby agrees to indemnify and hold harmless the Corporation, ParentCo, CallCo, Terrestrial Energy (Ontario) Inc. and any Permitted Subsidiary from and against any liability with respect to the taxes, interest, or penalties that may be asserted by reason of any such Person’s obligation to deduct and withhold from any dividend or other amount otherwise payable or allocable to any Holder. To the extent that the amount so required or permitted to be deducted or withheld from any payment to the Holder exceeds the cash portion of the consideration otherwise payable to a Holder, the Holder will be notified in writing thereof by ParentCo, CallCo, the Corporation or a Permitted Subsidiary (as applicable) and the Holder must pay the difference (up to the amount required to be withheld by ParentCo, CallCo, the Corporation or any Permitted Subsidiary) in cash to such withholding party; failing payment of such difference within five Business Days after notice is provided to the Holder, ParentCo, CallCo, the Corporation and any Permitted Subsidiary are hereby authorized to sell or otherwise dispose of such portion of the consideration as is necessary to provide sufficient funds to ParentCo, CallCo, the Corporation or any Permitted Subsidiary, as the case may be, to enable it to comply with such deduction or withholding requirement and ParentCo, CallCo, the Corporation or any Permitted Subsidiary will notify the Holder thereof and remit to the Holder any unapplied balance of the net proceeds of such sale.
- 9 -
Section 5.2 Transfer Taxes
Each Holder will pay any documentary, stamp, transfer or other similar taxes that may be payable in respect of any Transfer involved in the issuance or delivery of ParentCo Shares pursuant to the exercise of the Exchange Right or the Automatic Exchange Right.
Article 6
GENERAL
Section 6.1 Transfer and Issuance Restrictions
Notwithstanding any other provision of this Agreement:
| (a) | other than a transfer permitted under the Corporation Articles or this Agreement, the Holder may not transfer<br>Exchangeable Shares to any Person unless such Person is an heir or successor to the Holder or a transferee that is transferred Exchangeable<br>Shares pursuant to a Permitted Transfer, who, in each case, agrees in writing to be treated as a “Holder” for purposes of<br>this Agreement concurrently with such transfer; |
|---|---|
| (b) | the Corporation will not issue any additional Exchangeable Shares to any Person unless such Person is<br>a Holder as of the date hereof or is a direct or indirect transferee of such Holder. |
| --- | --- |
Section 6.2 Acknowledgement
Each Holder acknowledges that any ParentCo Shares issued in exchange for the Exchangeable Shares may be: (a) considered “restricted securities” under the U.S. Securities Act; and/or (b) otherwise subject to restrictions on transfer such that the shares may not be resold unless pursuant to an effective registration statement or pursuant to an available exemption from registration under the U.S. Securities Act and applicable state securities Laws.
Section 6.3 Voting Covenants
| (a) | In the event the holders of the Exchangeable Shares are entitled to vote on any shareholder resolution<br>(whether separately as a class/series or together with the holders of other classes/series of shares) pursuant to the Corporation Articles<br>or applicable Law, each Holder covenants and agrees to vote its Exchangeable Shares as directed by ParentCo, unless the subject matter<br>of such shareholder resolution would adversely affect the rights, preferences, privileges, benefits or restrictions attached to the Exchangeable<br>Shares or the rights, preferences, privileges or benefits of the Holders of the Exchangeable Shares (other than ParentCo, CallCo and its<br>Affiliates) pursuant to this Agreement or the Corporation Articles. |
|---|---|
| (b) | ParentCo and CallCo shall not, and shall cause its Subsidiaries not to, without the approval of Holders<br>of two-thirds of the outstanding Exchangeable Shares, take any action which would adversely affect the rights, preferences, privileges,<br>benefits or restrictions attached to the applicable class/series of Exchangeable Shares or the rights, preferences, privileges or benefits<br>of the Holders of the applicable class/series of Exchangeable Shares (other than ParentCo, CallCo and its Affiliates) pursuant to this<br>Agreement. |
| --- | --- |
| (c) | Each of ParentCo and CallCo covenants and agrees that it shall not, and shall cause its Affiliates not<br>to, exercise any voting rights or consent or approval rights which may be exercisable by holders of Exchangeable Shares from time to time<br>pursuant to the Exchangeable Share Provisions, this Agreement, or pursuant to the provisions of the Business Corporations Act (Ontario)<br>(or any successor or other corporate statute by which the Corporation may in the future be governed) with respect to any Exchangeable<br>Shares held by it or by its Affiliates in respect of any matter considered at any meeting of holders of Exchangeable Shares or in respect<br>of consents or approvals sought from the Holders of Exchangeable Shares, provided however, for further clarity, that this Section 6.3(c)<br>shall not in any way restrict ParentCo’s, CallCo’s and/or its Affiliates’ right to vote any common shares of Corporation<br>held by them in accordance with the Exchangeable Share Provisions. |
| --- | --- |
Section 6.4 Compliance with other Instruments
ParentCo will cause CallCo, the Corporation and each Permitted Subsidiary to comply with the Exchangeable Share Provisions and this Agreement.
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Section 6.5 Changes in Capital of ParentCo and the Corporation
At all times after the occurrence of any event as a result of which the ParentCo Shares or the Exchangeable Shares are in any way changed, this Agreement will be amended and modified as necessary in order that it will apply with full force and effect to all new securities into which the ParentCo Share or the Exchangeable Shares, respectively, are so changed.
Section 6.6 Term
This Agreement is effective as of the date of this Agreement and terminates when no Exchangeable Shares (or securities or rights convertible into or exchangeable for or carrying rights to acquire Exchangeable Shares) are held by any party other than ParentCo and its Affiliates, including CallCo.
Section 6.7 Enurement
This Agreement enures to the benefit of and is binding upon the Parties and their respective successors (including any successor by reason of amalgamation of any party), legal representatives and permitted assigns as contemplated in Section 6.11.
Section 6.8 Notices to Parties
All notices, requests, consents and demands must be in writing and must be personally delivered (effective upon receipt), faxed or e-mailed (effective upon receipt of the fax or e-mail in complete, readable form), or sent via a reputable overnight courier service (effective the following Business Day):
| (a) | if to ParentCo, DelawareCo, CallCo or the Corporation, to: |
|---|
Terrestrial Energy Inc.
2730 W. Tyvola Road
Suite 100
Charlotte, NC 28217
Attention: Steve Millsap
Email: smillsap@terrestrialenergy.com
with a copy to:
Stikeman Elliott LLP
199 Bay Street
Suite 5300
Commerce Court West
Toronto, Ontario M5L 1B9
Attention: Kevin Smyth / Spencer Burger
Email: ksmyth@stikeman.com / sburger@stikeman.com
and a copy to:
Bryan Cave Leighton Paisner LLP
One Atlantic Center, 14th Floor
1201 W. Peachtree Street, NW
Atlanta, Georgia 30309-3471
United States
Attention: Amy Taylor Wilson / Jonathan Nesher
Email: amy.wilson@bclplaw.com / jonathan.nesher@bclplaw.com
| (b) | and if to a Holder of the Exchangeable Shares, to his, her or its address as set out in the books and records of the Corporation. |
|---|
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Section 6.9 Amendment
No amendment, supplement, modification, or termination of this Agreement is binding without the written approval of the Holders of two-thirds of the outstanding Exchangeable Shares and the prior written approval of ParentCo, CallCo and the Corporation, and no consent or approval by any Party will be binding unless delivered in writing to the other Parties hereto; provided that any amendment, supplement, or modification of this Agreement that is administrative or clerical in nature shall not require approval by Holders of Exchangeable Shares; provided that such amendment, supplement, or modification does not adversely impact the rights of the Holders of Exchangeable Shares.
Section 6.10 Waiver
Except as otherwise expressly set out herein, no waiver of any provision of this Agreement shall be binding unless it is in writing. No indulgence or forbearance by a Party shall constitute a waiver of such Party’s right to insist on performance in full and in a timely manner of all covenants in this Agreement. Waiver of any provision shall not be deemed to waive the same provision thereafter, or any other provision of this Agreement, at any other time.
Section 6.11 Assignment
No party may assign any rights or obligations under this Agreement without the written approval of the Holders of two-thirds of the outstanding Exchangeable Shares and the prior written consent of ParentCo, CallCo and the Corporation, provided that ParentCo and CallCo may assign its rights and obligations hereunder to any Permitted Subsidiary without notice to the Holders (as contemplated by the Exchangeable Share Provisions) provided that ParentCo and CallCo shall continue to be liable for the performance of any such obligations so assigned.
Section 6.12 Third Party Beneficiaries
The Parties acknowledge and agree that the provisions of this Agreement are intended as stipulations for the benefit of the each of the Holders (for which the Corporation hereby confirms that it is acting as agent on behalf of the Holders) and that the stipulations for the benefit of the Holders set out herein shall not be revoked, and that the acceptance by the Holders of such stipulations shall be deemed to have occurred, it being an essential condition of this Agreement that the Holders as intended beneficiaries of such stipulations shall be entitled to all rights and remedies available to them hereunder under applicable Law.
Section 6.13 Original Agreement
Subject to the foregoing terms and conditions, the First Amended and Restated Agreement is amended, restated and superseded by this Agreement.
Section 6.14 Further Assurances
The Parties will, with reasonable diligence, do all such things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each party will provide such further documents or instruments required by any other party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions.
Section 6.15 Execution and Delivery
This Agreement may be executed by the Parties in counterparts and may be executed and delivered by fax or e-mail, and all such counterparts, faxes and e-mails together constitute one agreement.
[Remainder of pageintentionally left blank. The next page is the signature page.]
- 12 -
IN WITNESS OF WHICH the Parties have duly executed this Agreement.
| HCM ii aCQUISITION CORP. | ||
|---|---|---|
| By: | /s/ Shawn Matthews | |
| Name: | Shawn Matthews | |
| Title: | Chief Executive Officer | |
| terrestrial energy canada (Call) inc. | ||
| --- | --- | --- |
| By: | /s/ Simon Irish | |
| Name: | Simon Irish | |
| Title: | Director | |
| terrestrial energy canada (exchange) inc. | ||
| --- | --- | --- |
| By: | /s/ Simon Irish | |
| Name: | Simon Irish | |
| Title: | Director |
Terrestrial Energy Inc. only for the purposes of Section 6.13 hereof.
| terrestrial energy inc. | ||
|---|---|---|
| By: | /s/<br> Simon Irish | |
| Name: | Simon Irish | |
| Title: | Chief Executive Officer |
Exhibit 10.9
Terrestrial Energy Inc.
2025 Equity Incentive Plan
As Adopted: October 28, 2025
Table of Contents
| Page | |||
|---|---|---|---|
| ARTICLE I INTRODUCTION | 1 | ||
| 1.1 | Establishment | 1 | |
| 1.2 | Purpose | 1 | |
| ARTICLE II DEFINITIONS | 1 | ||
| 2.1 | Definitions | 1 | |
| 2.2 | Gender and Number | 6 | |
| ARTICLE III PLAN ADMINISTRATION | 6 | ||
| 3.1 | General | 6 | |
| 3.2 | Delegation by Committee | 8 | |
| 3.3 | Contractual Limitations | 8 | |
| ARTICLE IV STOCK SUBJECT TO THE PLAN | 8 | ||
| 4.1 | Number of Shares | 8 | |
| 4.2 | Incentive Stock Option Limitation | 9 | |
| 4.3 | Capitalization Adjustments | 9 | |
| 4.4 | Other Distributions and Changes in the Stock | 10 | |
| 4.5 | General Adjustment Rules | 10 | |
| 4.6 | Determination by the Committee, Etc | 10 | |
| ARTICLE V CHANGE IN CONTROL | 10 | ||
| 5.1 | Change in Control Provisions | 10 | |
| 5.2 | Company Actions | 11 | |
| 5.3 | Dissolution or Liquidation | 11 | |
| ARTICLE VI PARTICIPATION | 12 | ||
| ARTICLE VII OPTIONS | 12 | ||
| 7.1 | Grant of Options | 12 | |
| 7.2 | Stock Option Agreements | 12 | |
| 7.3 | Restrictions on Incentive Stock Options | 16 | |
| 7.4 | Transferability | 16 | |
| 7.5 | Stockholder Privileges | 17 | |
| 7.6 | Non-Exempt Employees | 17 | |
| ARTICLE VIII RESTRICTED STOCK AWARDS | 17 | ||
| 8.1 | Grant of Restricted Stock Awards | 17 | |
| 8.2 | Restrictions | 17 | |
| 8.3 | Privileges of a Stockholder, Transferability | 18 | |
| 8.4 | Enforcement of Restrictions | 18 | |
| ARTICLE IX RESTRICTED STOCK UNITS | 18 | ||
| 9.1 | Restricted Stock Unit Awards | 18 | |
| ARTICLE X STOCK APPRECIATION RIGHTS | 19 | ||
| 10.1 | Stock Appreciation Rights | 19 |
i
| ARTICLE XI | 20 | ||
|---|---|---|---|
| OTHER GRANTS | 20 | ||
| ARTICLE XII RIGHTS OF PARTICIPANTS | 20 | ||
| 12.1 | Employment or Service | 20 | |
| 12.2 | Nontransferability of Awards | 21 | |
| 12.3 | No Plan Funding | 21 | |
| ARTICLE XIII GENERAL RESTRICTIONS | 21 | ||
| 13.1 | Investment Representations | 21 | |
| 13.2 | Compliance with Securities Laws | 21 | |
| 13.3 | Changes in Accounting or Tax Rules | 22 | |
| 13.4 | Delivery | 22 | |
| 13.5 | Change in Time Commitment | 22 | |
| 13.6 | Clawback | 22 | |
| 13.7 | Non-Uniform Determinations | 23 | |
| 13.8 | No Obligation to Notify | 23 | |
| ARTICLE XIV AMENDMENT, MODIFICATION AND TERMINATION | 23 | ||
| ARTICLE XV WITHHOLDING | 23 | ||
| 15.1 | Withholding Requirement | 23 | |
| 15.2 | Withholding With Stock | 24 | |
| ARTICLE XVI REQUIREMENTS OF LAW | 24 | ||
| 16.1 | Requirements of Law | 24 | |
| 16.2 | Federal Securities Law Requirements | 24 | |
| 16.3 | Section 409A | 25 | |
| 16.4 | Governing Law | 25 | |
| ARTICLE XVII DURATION OF THE PLAN | 25 |
ii
Terrestrial Energy Inc.
2025 EQUITY INCENTIVE PLAN
Article I
INTRODUCTION
1.1 Establishment*.*The Board adopted the Plan to become effective immediately prior to the Closing (as defined in the Business Combination Agreement). The Plan is established for the benefit of Eligible Employees, Eligible Consultants, and Eligible Non-Employee Directors of the Company and its Affiliates. The Plan permits the grant of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock Appreciation Rights, and other Awards.
1.2 Purpose. The purpose of the Plan is to provide financial incentives for select service providers of the Company and its Affiliates, thereby promoting the long-term growth and financial success of the Company by (a) attracting and retaining the most qualified service providers, (b) strengthening the capability of the Company and its Affiliates to develop, maintain and direct a competent management team, (c) providing an effective means for select service providers to acquire and maintain a direct proprietary interest in the operations and future success of the Company, (d) motivating employees to achieve long-range performance goals and objectives, and (e) providing incentive compensation opportunities competitive with those of other organizations.
Article II
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth below:
(a) “Affiliate” means, with respect to the Company, (i) any Subsidiary and (ii) any other corporation or entity that is affiliated with the Company through stock ownership or otherwise and is designated as an “Affiliate” by the Board; provided, however, that for purposes of Incentive Stock Options granted pursuant to the Plan, an “Affiliate” means any parent or Subsidiary as defined in Section 424 of the Code.
(b) “Award” means an Option, a Restricted Stock Award, a Restricted Stock Unit Award, Stock Appreciation Right, grants of Stock pursuant to Article X, or other issuances of Stock or the cash equivalent of such Stock hereunder.
(c) “Award Agreement” means an Option Agreement, Restricted Stock Agreement, Restricted Stock Unit Agreement, Stock Appreciation Right Agreement, or a written agreement evidencing any other Award under the Plan.
(d) “Board” means the Board of Directors of the Company.
(e) “BusinessCombination Agreement” means that certain Business Combination Agreement, dated as of March 26, 2025, by and among the Company, HCM II Acquisition Corp., a Cayman Islands exempted company (“HCMII”), HCM II Merger Sub, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of HCM II.
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(f) “BusinessCombination Date” means the date of the closing of the merger contemplated by the Business Combination Agreement.
(g) “Cause” means (i) if there is an employment or other service agreement between the Participant and the Company and the agreement contains a definition of “Cause”, the definition contained therein or (ii) in the absence of an employment or other service agreement between the Participant and the Company that contains a definition of “Cause”, (A) the Participant’s commission of any felony involving fraud, dishonesty or moral turpitude; (B) the Participant’s attempted commission of or participation in a fraud or act of dishonesty against the Company or any Affiliate that results in (or might have reasonably resulted in) material harm to the business of the Company or any Affiliate; (C) the Participant’s intentional, material violation of any contract or agreement between the Participant and the Company or any Affiliate or any statutory duty that the Participant owes to the Company or any Affiliate; or (D) the Participant’s conduct that constitutes gross insubordination, incompetence or habitual neglect of duties and that results in (or might have reasonably resulted in) material harm to the business of the Company or any Affiliate.
(h) “Change in Control” means the following:
(i) Any “person” becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total combined voting power represented by the Company’s then-outstanding voting securities;
(ii) The consummation of a sale or disposition of all or substantially all of the assets of the Company, other than the sale or disposition of all or substantially all of the assets of the Company to a person or persons who beneficially own, directly or indirectly, more than fifty percent (50%) of the total combined voting power represented by the Company’s then-outstanding voting securities;
(iii) The consummation of a merger, reorganization, share exchange, or consolidation of the Company with or into any other entity, other than a merger, reorganization, share exchange, or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger, reorganization, share exchange, or consolidation;
(iv) A majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election.
A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. Notwithstanding anything to the contrary set forth herein, if necessary for compliance with Section 409A of the Code, a Change in Control shall not occur unless such transaction satisfies the foregoing and constitutes a change in the ownership of the Company, a change in the effective control of the Company or a change in the ownership of a substantial portion of the Company’s assets under Section 409A of the Code.
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(i) “Clawback Policy” shall have the meaning given to that term in Section 13.6 hereof.
(j) “Code” means the Internal Revenue Code of 1986, as it may be amended from time to time.
(k) “Committee” means the Board, or if so delegated by the Board, a committee consisting of not less than two individuals who are empowered hereunder to take actions in the administration of the Plan. If applicable, the Committee shall be so constituted at all times as to permit the Plan to comply with Rule 16b-3 or any successor rule promulgated under the Exchange Act, including that the Committee shall be comprised of solely two or more (i) Eligible Non-Employee Directors and (ii) “independent directors” to the extent required by the listing standards or rules of the national securities exchange that is the principal trading market for the Stock, but only to the extent such independence is required in order to take the action at issue pursuant to such standards or rules. Except as provided in Section 3.2, the Committee shall select Participants from Eligible Employees, Eligible Consultants and Eligible Non-Employee Directors of the Company and its Affiliates and shall determine the Awards to be made pursuant to the Plan and the terms and conditions thereof; provided, however, with respect to an Award made to a Non-Employee Director, “Committee” means the Board.
(l) “Company” means Terrestrial Energy Inc., a Delaware corporation formerly known as “HCM II Acquisition Corp.”.
(m) “Disabled” or “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.
(n) “EligibleConsultants” means those consultants and advisors to the Company or an Affiliate who are determined by the Committee (i) to provide bona fide services that are important to the Company or an Affiliate and who are eligible to receive Awards, other than Incentive Stock Options, under the Plan, and (ii) to the extent applicable, who meet the conditions for eligibility under Rule 701 promulgated under the Securities Act or such other exemptions from registration under the Securities Act as may be applicable.
(o) “EligibleEmployees” means those employees (including, without limitation, officers and directors who are also employees) of the Company or any Affiliate, upon whose judgment, initiative and efforts the Company is, or will become, largely dependent for the successful conduct of its business; provided, that, mere service as an Eligible Non-Employee Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.
3
(p) “Eligible Non-Employee Director” means any person serving on the Board who is a “non-employee director” within the meaning of Rule 16b-3.
(q) “Exchange Act” means the Securities Exchange Act of 1934, as it may be amended from time to time.
(r) “FairMarket Value” means, as of a given date, (i) the closing price of a Share on the principal stock exchange on which the Stock is then trading, if any (or as reported on any composite index that includes such principal exchange) on such date, or if Shares were not traded on such date, then on the last preceding date on which a trade occurred; or (ii) if the Stock is not traded on an exchange but is quoted on NASDAQ or a successor quotation system, the mean between the closing representative bid and asked prices for a Share of the Stock on such date as reported by NASDAQ or such successor quotation system; or (iii) if the Stock is not publicly traded on an exchange and not quoted on NASDAQ or a successor quotation system, the Fair Market Value shall mean the fair market value of a Share determined by the reasonable application of a reasonable valuation method, where such valuation method is based on the facts, circumstances, and all other available information that is material to the value of the Company in a manner consistent with the requirements of Sections 409A and 422 of the Code if and to the extent applicable.
(s) “FiscalYear” means the Company’s fiscal year.
(t) “Forfeiture Restrictions” shall have the meaning given to that term in Section 8.2 hereof.
(u) “Free Standing Rights” shall have the meaning given to that term in Section 10.1 hereof.
(v) “IncentiveStock Option” means an Option designated as such and granted in accordance with Section 422 of the Code.
(w) “ISO Limit” shall have the meaning given to that term in Section 4.2 hereof.
(x) “Non-QualifiedStock Option” means any Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
(y) “Option” means a right to purchase Stock at a stated or formula price for a specified period. Options granted under the Plan shall be either Incentive Stock Options or Non-Qualified Stock Options.
(z) “Option Agreement” shall have the meaning given to that term in Section 7.2 hereof.
(aa) “Optionholder” means a Participant who has been granted one or more Options under the Plan.
(bb) “OptionPeriod” means the period, determined by the Committee, during which an Option may be exercised by the Optionholder.
4
(cc) “Option Price” shall have the meaning given to that term in Section 7.2(b) hereof.
(dd) “Participant” means an Eligible Employee, Eligible Consultant or Eligible Non-Employee Director designated by the Committee from time to time during the term of the Plan to receive one or more of the Awards available under the Plan.
(ee) “Plan” means this Terrestrial Energy Inc. 2025 Equity Incentive Plan.
(ff) “PriorPlan” means the Terrestrial Energy Inc. Second Amended and Restated 2024 Stock Option Plan.
(gg) “Related Rights” shall have the meaning given to that term in Section 10.1 hereof.
(hh) “Restricted Stock Agreement” shall have the meaning given to that term in Section 8.1 hereof.
(ii) “Restricted Stock Award” means an award of Stock granted to a Participant pursuant to Article VIII that is subject to certain restrictions imposed by the Committee in accordance with the provisions thereof.
(jj) “Restricted Stock Unit Award” means an award of a right to receive Shares, their cash equivalent, or a combination thereof pursuant to Article IX that is subject to certain restrictions imposed by the Committee in accordance with the provisions thereof.
(kk) “Restricted Stock Unit Agreement” shall have the meaning given to that term in Section 9.1 hereof.
(ll) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
(mm) “Section 16” shall have the meaning given to that term in Section 15.2(c) hereof.
(nn) “SEC” shall mean the Securities and Exchange Commission.
(oo) “Securities Act” means the Securities Act of 1933, as it may be amended from time to time.
(pp) “Service” means service to the Company or an Affiliate as an employee, a non-employee director, a consultant or an advisor, except to the extent otherwise specifically provided in an Award Agreement. The Committee determines which leaves of absence count toward Service and when Service terminates for all purposes under the Plan. Further, unless otherwise determined by the Committee, a Participant’s Service shall not be deemed to have terminated merely because of a change in capacity in which the Participant provides Service to the Company or an Affiliate or a transfer between the Company and its Affiliates, provided there is no interruption or other termination of Service; provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code.
5
(qq) “Share” means one whole share of Stock.
(rr) “Stock” means the common stock of the Company.
(ss) “Stock Appreciation Right” means the right pursuant to an Award granted under Article X to receive, upon exercise, an amount payable in cash or Shares equal to the number of Shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (i) the Fair Market Value of a Share on the date the Award is exercised, over (ii) the exercise price specified in the Stock Appreciation Right Agreement.
(tt) “StockAppreciation Right Agreement” means an award of a right to receive Shares, their cash equivalent, or a combination thereof pursuant to Article X that is subject to certain restrictions imposed by the Committee in accordance with the provisions thereof.
(uu) “Subsidiary” means any corporation more than 50% of the outstanding voting securities of which are owned by the Company or any other Subsidiary, directly or indirectly, or a partnership or limited liability company in which the Company or any Subsidiary is a general partner or manager or holds interests entitling it to receive more than 50% of the profits or losses of the partnership or limited liability company.
(vv) “Substitute Awards” shall have the meaning given to that term in Section 4.1 hereof.
(ww) “Tax Date” shall have the meaning given to that term in Section 15.2 hereof.
2.2 Gender and Number. Except when otherwise indicated by the context, the masculine gender shall also include the feminine gender, and the definition of any term herein in the singular shall also include the plural.
Article III
PLAN ADMINISTRATION
3.1General. The Plan shall be administered by the Committee. In accordance with the provisions of the Plan, the Committee shall have the power to take the following actions, subject to and within the limitations of the express provisions of the Plan:
(a) select the Participants from among the Eligible Employees, Eligible Consultants and Eligible Non-Employee Directors;
(b) determine the Awards to be made pursuant to the Plan, or Shares to be issued thereunder, and the time at which such Awards are to be made;
(c) fix the Option Price, the Option Period and the manner in which an Option becomes exercisable;
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(d) establish the duration and nature of Restricted Stock Award and Restricted Stock Unit Award restrictions;
(e) establish the other terms and conditions applicable to the various Awards under the Plan as the Committee may deem necessary or desirable, and consistent with the terms of the Plan;
(f) determine the form or forms of the agreements with Participants that shall evidence the particular provisions, terms, conditions, rights and duties of the Company and the Participants with respect to Awards granted pursuant to the Plan, which provisions need not be identical except as may be provided herein;
(g) adopt such rules and regulations for carrying out the purposes of the Plan as it may deem proper and in the best interests of the Company;
(h) effect the reduction of the exercise, purchase or strike price of any outstanding Award, provided that approval of the stockholders of the Company shall be required before such repricing is effective and such repricing complies with applicable law;
(i) approve such supplements or amendments to the Plan (including sub-plans) as it may consider necessary or appropriate to grant Awards to Participants who are foreign nationals or who are employed by the Company or its Affiliates outside of the United States; provided, however, that any such supplements or amendments shall be consistent with the terms of the Plan;
(j) correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any agreement entered into hereunder in the manner and to the extent it shall deem expedient and it shall be the sole and final judge of such expediency; and
(k) take any other action the Committee deems necessary for administering or maintaining the Plan.
The Committee and each member thereof, and any person acting pursuant to authority delegated by the Committee, shall be entitled, in good faith, to rely or act upon any report or other information furnished by any executive officer, other officer or employee of the Company or its Affiliates or the Company’s auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee, any person acting pursuant to authority delegated by the Committee, and any officer or employee of the Company or its Affiliates acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by applicable law, be fully indemnified and protected by the Company with respect to any such action or determination. The determinations, interpretations and other actions of the Committee pursuant to the provisions of the Plan shall be binding and conclusive for all purposes and on all persons.
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3.2 Delegation byCommittee. The Committee may, from time to time, delegate, to specified officers of the Company, the power and authority to grant Awards under the Plan to specified groups of Eligible Employees, Eligible Consultants and Eligible Non-Employee Directors, subject to such restrictions and conditions as the Committee, in its sole discretion, may impose. The delegation shall be as broad or as narrow as the Committee shall determine, subject to applicable law. To the extent that the Committee has delegated the authority to determine certain terms and conditions of an Award, all references in the Plan to the Committee’s exercise of authority in determining such terms and conditions shall be construed to include the officer or officers to whom the Committee has delegated the power and authority to make such determination. The power and authority to grant Awards to any Eligible Employee, Eligible Consultant or Eligible Non-Employee Director who is covered by Section 16(b) of the Exchange Act shall not be delegated by the Committee.
3.3 Contractual Limitations. The Committee shall in exercising its discretion under the Plan comply with all contractual obligations of the Company in effect from time to time, whether contained in the Company’s Certificate of Incorporation, Bylaws or other binding contract.
Article IV
STOCK SUBJECT TO THE PLAN
4.1 Number of Shares.
(a) Share Reserve. Subject to adjustment as provided in the Plan, the aggregate number of Shares that may be issued under the Plan pursuant to Awards shall not exceed the sum of (a) 15,736,694 Shares, (b) any Shares subject to awards granted under the Prior Plan (and assumed by the Company pursuant to the Business Combination Agreement) that are outstanding on the Business Combination Date and that subsequently are forfeited, expire, or lapse unexercised or unsettled, and (c) the additional Shares described in Sections 4.1(b) and 4.1(c) (the “Share Reserve”).
(b) Annual Increase in Shares. On the first day of each January during the term of the Plan, commencing on January 1, 2026 and ending on (and including) January 1, 2035, the aggregate number of Shares that may be issued under the Plan shall automatically increase by a number equal to the lesser of (i) five percent (5%) of the total number of Shares actually issued and outstanding on the last day of the preceding Fiscal Year or (ii) a number of Shares determined by the Board.
(c) Shares Returning toShare Reserve. Any Shares subject to an Award that expires or is canceled, forfeited, or terminated without issuance of the full number of Shares to which the Award related will again be available for issuance under the Plan. Notwithstanding anything to the contrary contained herein, Shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of an Option, (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation, or (c) shares covered by a stock-settled Stock Appreciation Right or other Awards that were not issued upon the settlement of the Award. To the extent permitted under applicable exchange listing requirements, any dividend equivalents paid or credited under the Plan with respect to Restricted Stock Units shall not be applied against the number of Shares that may be issued under the Plan, whether or not such dividend equivalents are converted into Restricted Stock Units. The maximum number of Shares may be increased from time to time by approval of the Board and by the stockholders of the Company if, in the opinion of counsel for the Company, stockholder approval is required. During the terms of the Awards, the Company shall keep available at all times the number of Shares reasonably required to satisfy such Awards, which Shares may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company in any manner.
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(d) Awards Not Reducing Share Reserve. Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines (“Substitute Awards”). Substitute Awards shall not be counted against the Share Reserve; provided, that, Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding options intended to qualify as Incentive Stock Options shall be counted against the ISO Limit. Subject to applicable stock exchange requirements and applicable law, available shares under a shareholder-approved plan of an entity directly or indirectly acquired by the Company or with which the Company combines (as appropriately adjusted to reflect such acquisition or transaction) may be used for Awards under the Plan and shall not count toward the Share Reserve. The Shares may be either authorized and unissued Shares or previously issued Shares acquired by the Company on the open market or otherwise.
(e) Non-Employee Director Limit. The maximum number of Shares subject to Awards granted during a single Fiscal Year to any Eligible Non-Employee Director, together with any cash fees paid to such Eligible Non-Employee Director during the Fiscal Year shall not exceed a total value of $400,000 (calculating the value of any Awards based on the grant date fair value for financial reporting purposes); provided however that (i) the Committee may make exceptions to this limit, except that the Non-Employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous decisions involving compensation for Non-Employee Director and (ii) the limitation that will apply in the fiscal year in which the Eligible Non-Employee Director (A) is initially appointed or elected to the Board, (B) serves on a special committee of the Board, or (iii) serves as lead director or non-executive chair of the Board, shall be $800,000.
4.2 Incentive Stock OptionLimitation. The maximum number of Shares that may be issued in the aggregate pursuant to the exercise of Incentive Stock Options is 15,736,694 Shares (the “ISO Limit”).
4.3 Capitalization Adjustments*.* If the Company shall at any time increase or decrease the number of its outstanding Shares or change in any way the rights and privileges of such Shares by means of the payment of a stock dividend, extraordinary cash dividend, including a dividend recapitalization, or any other distribution upon such Shares payable in Stock or cash, or through a stock split, subdivision, consolidation, combination, reclassification, recapitalization, or any other corporate transaction or event having an effect similar to the foregoing, in each case, involving the Stock, then in relation to the Stock that is affected by one or more of the above events, the numbers, exercise price, rights and privileges of the following shall be increased, decreased or changed in like manner as if they had been issued and outstanding, fully paid and nonassessable at the time of such occurrence: (a) the Shares as to which Awards may be granted under the Plan, (b) the Shares then included in each outstanding Award granted hereunder, (c) the maximum number of Shares available for grant pursuant to Incentive Stock Options, and (d) the number of Shares subject to a delegation of authority under Section 3.2 of the Plan.
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4.4 Other Distributionsand Changes in the Stock. In the event that:
(a) the Company shall at any time distribute with respect to the Stock assets or securities of persons other than the Company (excluding (i) cash or (ii) distributions referred to in Section 4.3), or
(b) the Company shall at any time grant to the holders of its Stock rights to subscribe pro rata for additional shares thereof or for any other securities of the Company, or
(c) there shall be any other change (except as described in Section 4.3) in the number or kind of outstanding Shares or of any stock or other securities into which the Stock shall be changed or for which it shall have been exchanged,
the Committee may, in its sole discretion, determine that such event equitably requires an adjustment in the number or kind of Shares subject to an Option or other Award, an adjustment in the Option Price or the taking of any other action by the Committee, including, without limitation, the setting aside of any property for delivery to the Participant upon the exercise of an Option or the full vesting of an Award. If the Committee makes such a determination, then such adjustments shall be made, or other action shall be taken, by the Committee and shall be effective for all purposes of the Plan and on each outstanding Option or Award that involves the particular type of stock for which a change was effected.
4.5 General AdjustmentRules. No adjustment or substitution provided for in this Article IV shall require the Company to sell a fractional Share under any Option, or otherwise issue a fractional Share, and the total substitution or adjustment with respect to each Option and other Award shall be limited by deleting any fractional Share. In the case of any such substitution or adjustment, the aggregate Option Price for the total number of Shares then subject to an Option shall remain unchanged but the Option Price per Share under each such Option shall be equitably adjusted by the Committee to reflect the greater or lesser number of Shares or other securities into which the Stock subject to the Option may have been changed and appropriate adjustments shall be made to other Awards to reflect any such substitution or adjustment.
4.6 Determination by theCommittee, Etc*.* Adjustments under this Article IV shall be made by the Committee, whose determinations with regard thereto shall be made in a manner that complies with Sections 409A and 424 of the Code, as applicable, and shall be final and binding upon all parties thereto.
Article V
CHANGE IN CONTROL
5.1 Change in ControlProvisions. The following provisions shall apply to Awards in the event of a Change in Control unless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company or any Affiliate and the holder of the Award or unless otherwise expressly provided by the Committee at the time of grant of the Award. Except as otherwise stated in the Award Agreement, in the event of a Change in Control, then, notwithstanding anything to the contrary set forth herein, the Committee may unilaterally take one or more of the following actions with respect to the Awards, without Participant consent, contingent upon the closing or completion of the Change in Control:
(a) arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Award or to substitute a similar stock award for the Award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Change in Control);
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(b) arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Stock issued pursuant to the Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);
(c) accelerate the vesting, in whole or in part, of the Award (and, if applicable, the time at which the Award may be exercised) to a date prior to the closing of such Change in Control as the Committee shall determine (or, if the Committee shall not determine such a date, to the date that is five days prior to the closing of the Change in Control), with such Award terminating if not exercised (if applicable) at or prior to the closing of the Change in Control;
(d) arrange for the lapse of any reacquisition or repurchase rights held by the Company with respect to the Award;
(e) cancel or arrange for the cancellation of the Award, to the extent not vested or not exercised prior to the closing of the Change in Control, in exchange for such cash consideration, if any, as the Committee, in its sole discretion, may consider appropriate; and
(f) make a payment, in such form as may be determined by the Committee, equal to the excess, if any, of (i) the value of the property the holder of the Award would have received upon the exercise of the Award, over (ii) any exercise price payable by such holder in connection with such exercise. For the avoidance of doubt, such payment may be zero if the fair market value of the property is equal to or less than the exercise price.
The Committee need not take the same action with respect to all Awards or with respect to all Participants. To the extent permitted under Section 409A of the Code, the Committee may provide that payments under this provision may be delayed to the same extent that payment of consideration to the holders of Stock in connection with the Change in Control is delayed as the result of escrows, earnouts, holdbacks or other contingencies. In addition, the Committee may provide that such payments made over time will remain subject to substantially the same vesting schedule as the Award, including any performance-based metrics that applied to the Award immediately prior to the closing or completion of the Change in Control.
5.2 Company Actions. The grant of Awards under the Plan shall in no way affect the right of the Company or any Affiliate to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.
5.3 Dissolution orLiquidation. Except as otherwise provided in the applicable Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Awards (other than Awards consisting of vested and outstanding Shares not subject to a forfeiture condition or the Company’s right of repurchase) shall terminate immediately prior to the completion of such dissolution or liquidation, and the Shares subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Award is providing Service, provided, however, that the Committee may, in its sole discretion, cause some or all Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.
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Article VI
PARTICIPATION
Participants in the Plan shall be those Eligible Employees, Eligible Consultants and Eligible Non-Employee Directors determined by the Committee. Participants may be granted from time to time one or more Awards; provided, however, that the grant of each such Award shall be separately approved by the Committee and receipt of one such Award shall not result in automatic receipt of any other Award. Upon determination by the Committee that an Award is to be granted to a Participant, written notice shall be given to such person, specifying the terms, conditions, rights and duties related thereto. Each Participant shall, if required by the Committee, enter into an Award Agreement with the Company, in such form as the Committee shall determine and which is consistent with the provisions of the Plan, specifying such terms, conditions, rights and duties. Awards shall be deemed to be granted as of the date specified in the grant resolution of the Committee, which date shall be the date of any related Award Agreement with the Participant. In the event of any inconsistency between the provisions of the Plan and any such Award Agreement entered into hereunder, the provisions of the Plan shall govern.
Article VII
OPTIONS
7.1 Grant of Options. Coincident with or following designation for participation in the Plan, a Participant may be granted one or more Options. The Committee, in its sole discretion, shall designate whether an Option is an Incentive Stock Option or a Non-Qualified Stock Option; provided, however, that only Non-Qualified Stock Options may be granted to Eligible Consultants and Eligible Non-Employee Directors. The Committee may grant both an Incentive Stock Option and a Non-Qualified Stock Option to an Eligible Employee at the same time or at different times. Incentive Stock Options and Non-Qualified Stock Options, whether granted at the same time or at different times, shall be deemed to have been awarded in separate grants and shall be clearly identified, and in no event shall the exercise of one Option affect the right to exercise any other Option or affect the number of Shares for which any other Option may be exercised. In no event shall the Company have any obligation or liability to a Participant if an Option intended to qualify as an Incentive Stock Option is determined not to qualify as an Incentive Stock Option.
7.2 Stock Option Agreements. Each Option granted under the Plan shall be evidenced by a written stock option agreement (an “Option Agreement”). An Option Agreement shall be issued by the Company in the name of the Participant to whom the Option is granted and in such form as may be approved by the Committee. The Option Agreement shall incorporate and conform to the conditions set forth in this Section 7.2 as well as such other terms and conditions that are not inconsistent as the Committee may consider appropriate in each case.
(a) Number of Shares. Each Option Agreement shall state that it covers a specified number of Shares, as determined by the Committee.
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(b) Price. The price at which each Share covered by an Option may be purchased (the “Option Price”) shall be determined in each case by the Committee and set forth in the Option Agreement. With respect to Options that are intended to be Incentive Stock Options, in no event shall the Option Price be less than 100% of the Fair Market Value of one Share on the date the Option is granted (or 110% of such Fair Market Value, to the extent provided in Section 7.3).
(c) Duration of Options; Vesting. Each Option Agreement shall state the Option Period applicable to the Option, which must end, in all cases, not more than 10 years from the date the Option is granted (or five years, to the extent provided in Section 7.3). Each Optionholder shall become vested in the Shares underlying the Option in such installments and over such period or periods of time, if any, or upon such events, as are determined by the Committee in its discretion and set forth in the Option Agreement.
(d) Vesting. The Option shall become exercisable, in whole or in part, at the same time or times as the Shares underlying the Option vest.
(e) Terminationof Service, Death, Disability, Etc. The Committee may specify the period, if any, during which an Option may be exercised following termination of the Optionholder’s Service. The effect of this subsection 7.2(e) shall be limited to determining the consequences of a termination of Service on an Option and nothing in this subsection 7.2(e) shall restrict or otherwise interfere with the Company’s discretion with respect to the termination of any individual’s Service. If the Committee does not otherwise specify, the following shall apply:
(i) If the Service of the Optionholder is terminated within the Option Period for Cause, the Option shall thereafter be void for all purposes and immediately cancelled in its entirety for no consideration upon the date of the Optionholder’s termination of Service.
(ii) Unless otherwise provided in an Award Agreement, if the Optionholder becomes Disabled while still in Service of the Company or an Affiliate, the Option may be exercised by the Optionholder within one year following the Optionholder’s termination of Service on account of Disability (provided that such exercise must occur within the Option Period) and immediately thereafter, the Option will automatically terminate. In any such case, the Option may be exercised only as to the Shares that had become vested on or before the date of the Optionholder’s termination of Service because of Disability.
(iii) Unless otherwise provided in an Award Agreement, if the Optionholder dies during the Option Period while still in Service of the Company or an Affiliate or within the one year period referred to in (ii) above or the three-month period referred to in (iv) below, the Option may be exercised by those entitled to do so under the Optionholder’s will or by the laws of descent and distribution within one year following the Optionholder’s death (provided that such exercise must occur within the Option Period), and immediately thereafter, the Option will automatically terminate. In any such case, the Option may be exercised only as to the Shares that had become vested on or before the date of the Optionholder’s death.
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(iv) Unless otherwise provided in an Award Agreement, if the Service of the Optionholder is terminated within the Option Period for any reason other than Cause, Disability or death, the Option may be exercised by the Optionholder within three months following the date of the Optionholder’s termination of Service (provided that such exercise must occur within the Option Period), and immediately thereafter, the Option will automatically terminate. In any such case, the Option may be exercised only as to the Shares that had become vested on or before the date of termination of Service.
(f) NoService Right. Nothing in the Plan shall limit or impair the right of the Company or any Affiliate to terminate the employment of any employee or to terminate the consulting or advisory services of any consultant or advisor.
(g) Exercise, Payments, Etc.
(i) Mannerof Exercise. The method for exercising each Option granted hereunder shall be by delivery to the Company of written notice on any business day specifying the number of Shares with respect to which such Option is exercised. The Option shall be exercised when the Option Price for the number of Shares as to which the Option is exercised and applicable tax withholding is paid to the Company in full. If the Shares are certificated, a properly executed certificate or certificates representing the Shares shall be delivered to or at the direction of the Optionholder upon payment therefor.
(ii) The exercise price shall be paid by any of the following methods or any combination of the following methods at the election of the Optionholder, or by any other method approved by the Committee:
(A) in cash;
(B) by certified check, cashier’s check or other check acceptable to the Company, payable to the order of the Company;
(C) if expressly permitted by a resolution of the Committee applicable to the Option at the time of exercise, by delivery to the Company of certificates representing the number of Shares then owned by the Optionholder, the Fair Market Value of which equals the purchase price of the Shares purchased pursuant to the Option, properly endorsed for transfer to the Company; provided however, that no Option may be exercised by delivery to the Company of certificates representing Shares, unless such Shares have been held by the Optionholder for more than six months (or such other period of time as the Committee determines is necessary to avoid adverse financial accounting treatment); for purposes of the Plan, the Fair Market Value of any Shares delivered in payment of the purchase price upon exercise of the Option shall be the Fair Market Value as of the exercise date, and the exercise date shall be the day of delivery of certificates for the Shares used as payment of the Option Price;
(D) if expressly permitted by a resolution of the Committee applicable to the Option at the time of exercise, if the Option is a Non-Qualified Stock Option, by delivery to the Company of irrevocable instructions directing the Company to withhold from the purchased Shares a number of Shares having a Fair Market Value as of the exercise date equal to the aggregate Option Price of the purchased Shares subject to the Option; or
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(E) should the Stock be registered under Section 12(g) of the Exchange Act at the time the Option is exercised, then the exercise price may also be paid to the extent the Option is exercised for vested Shares, through a special sale and remittance procedure pursuant to which the Optionholder (or any other person or persons exercising the Option) shall concurrently provide irrevocable written instructions (I) to a Company-designated brokerage firm to effect the immediate sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Shares plus all applicable federal, state and local income and employment taxes required to be withheld by the Company by reason of such exercise and (II) to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale.
Notwithstanding anything to the contrary set forth herein, during any period for which the Stock is publicly traded (i.e., the Stock is listed on any established stock exchange or a national market system) an exercise by a director or officer that involves or may involve a direct or indirect extension of credit or arrangement of an extension of credit by the Company, directly or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award under the Plan.
(h) Date of Grant. An Option shall be considered as having been granted on the date specified in the grant resolution of the Committee.
(i) Withholding.
(i) Non-Qualified Stock Options. Upon vesting and exercise of an Option, the Optionholder shall make appropriate arrangements with the Company to provide for the amount of any withholding required by Sections 3102 and 3402 of the Code and applicable state and local income tax laws, including payment of such taxes through delivery of Shares or by withholding Shares to be issued under the Option, as provided in Article XV.
(ii) Incentive Stock Options. If an Optionholder makes a disposition (as defined in Section 424(c) of the Code) of any Shares acquired pursuant to the exercise of an Incentive Stock Option prior to the expiration of two years from the date on which the Incentive Stock Option was granted or prior to the expiration of one year from the date on which the Option was exercised, the Optionholder shall send written notice to the Company at the Company’s principal place of business of the date of such disposition, the number of Shares disposed of, the amount of proceeds received from such disposition and any other information relating to such disposition as the Company may reasonably request. The Optionholder shall, in the event of such a disposition, make appropriate arrangements with the Company to provide for the amount of any withholding required by Sections 3102 and 3402 of the Code and applicable state and local income tax laws.
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(j) Lock-UpPeriod. Unless otherwise provided in an Award Agreement, if requested by the Company or the representative of the underwriters of Stock (or other securities) of the Company, the Participant shall not*,* without the prior written consent of the underwriter(s) of Stock (or other securities of the Company) and the Company, sell, transfer, make any short sale of, grant any option for the purchase of or enter into any hedging or similar transaction with the same economic effect as a sale, any Stock (or other securities) of the Company held by the Participant (other than those included in the registration) during (i) the 180-day period following the effective date of the first firm commitment underwritten public offering of the Stock registered under the Securities Act (or such longer period, not to exceed 18 days after the expiration of the 180-day period, as the underwriters or the Company or Affiliate shall request in order to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation), and (ii) the 90-day period following the effective date of a registration statement of the Company filed under the Securities Act (or such longer period, not to exceed 18 days after the expiration of the 90-day period, as the underwriters or the Company shall request in order to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation). The obligations described in this paragraph shall not apply to a registration relating solely to employee benefit plans on SEC Form S-1 or Form S-8 or similar forms that may be promulgated in the future by the SEC, or a registration relating solely to a transaction on SEC Form S-4 or similar forms that may be promulgated in the future. If requested by the Company or the representative of the underwriters of Stock (or other securities) of the Company, the Participant will enter into an agreement regarding his or her compliance with this requirement that will survive the term of the Award Agreement.
7.3 Restrictions on IncentiveStock Options.
(a) $100,000 Per Year Limitation. The aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by an Optionholder in any calendar year, under the Plan or otherwise, shall not exceed $100,000 (or such higher amount as may at the time of grant be applicable under Section 422(d) (or any successor provision) of the Code). For this purpose, the Fair Market Value of the Shares shall be determined as of the date of grant of the Option and Incentive Stock Options shall be taken into account in the order granted. The portion of any Incentive Stock Option accelerated in connection with a Change in Control shall remain exercisable as an Incentive Stock Option only to the extent the above limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such Incentive Stock Option shall thereafter be exercisable as a Non-Qualified Stock Option.
(b) Ten Percent Stockholders. Notwithstanding anything to the contrary set forth herein, Incentive Stock Options granted to an Optionholder who is the holder of record of 10% or more of the outstanding stock of the Company, its parent or any of its Subsidiaries, shall have an Option Price equal to 110% of the Fair Market Value of the Shares on the date of grant of the Option and the Option Period for any such Option shall not exceed five years.
7.4 Transferability.
(a) General Rule: No Lifetime Transfers. An Option shall not be transferable by the Optionholder except by will or pursuant to the laws of descent and distribution. An Option shall be exercisable during the Optionholder’s lifetime only by him or her, or in the event of Disability or incapacity, by his or her guardian or legal representative. The Optionholder’s guardian or legal representative shall have all the rights of the Optionholder under the Plan.
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(b) NoAssignment. No right or interest of any Optionholder in an Option granted pursuant to the Plan shall be assignable or transferable during the lifetime of the Optionholder, either voluntarily or involuntarily, or be subjected to any lien, directly or indirectly, by operation of law or otherwise, including execution, levy, garnishment, attachment, pledge or bankruptcy, except as set forth above. In the event the Option is assigned or transferred in any manner contrary to terms of the Plan, then all Options transferred or assigned shall immediately terminate.
7.5 Stockholder Privileges. No Optionholder shall have any rights as a stockholder with respect to any Shares covered by an Option until the Optionholder becomes the holder of record of such Shares, and no adjustments shall be made for dividends or other distributions or other rights as to which there is a record date preceding the date such Optionholder becomes the holder of record of such Shares.
7.6 Non-Exempt Employees. No Option granted to a Participant who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, shall be first exercisable for any Shares until at least six months following the date of grant of the Option. Notwithstanding anything to the contrary set forth herein, consistent with the provisions of the Worker Economic Opportunity Act, in the event of the Participant’s death or Disability or upon a Change in Control in which the vesting of such Options accelerates, any such vested Options may be exercised earlier than six months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option will be exempt from his or her regular rate of pay.
Article VIII
RESTRICTED STOCK AWARDS
8.1 Grant of RestrictedStock Awards. Coincident with or following designation for participation in the Plan, the Committee may grant a Participant one or more Restricted Stock Awards consisting of Shares. The number of Shares granted as a Restricted Stock Award shall be determined by the Committee. Each Restricted Stock Award granted under the Plan shall be evidenced by a written restricted stock agreement (a “Restricted Stock Agreement”). The Restricted Stock Agreement shall incorporate and conform to the conditions set forth in this Article VIII as well as such other terms and conditions that are not inconsistent as the Committee may consider appropriate in each case.
8.2Restrictions. A Participant’s right to retain a Restricted Stock Award granted to him or her under Section 8.1 shall be subject to such restrictions, including, but not limited to, his or her continuous Service for the Company or an Affiliate for a restriction period specified by the Committee or the attainment of specified performance goals and objectives, as may be established by the Committee with respect to such Award (such restrictions as established by the Committee shall be known as the “Forfeiture Restrictions”). The Committee may in its sole discretion provide for different Forfeiture Restrictions or no Forfeiture Restrictions with respect to different Participants, to different Restricted Stock Awards or to separate, designated portions of the Shares constituting a Restricted Stock Award. The Committee may in its sole discretion provide for the earlier lapse of any Forfeiture Restrictions in the event of a Change in Control in accordance with Article V of the Plan. Unless explicitly provided for otherwise in an Award Agreement, if a Participant’s Service terminates for any reason, any Shares as to which the Forfeiture Restrictions have not been satisfied (or waived or accelerated as provided herein) shall be forfeited, and all Shares related thereto shall be immediately returned to the Company.
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8.3 Privileges of a Stockholder,Transferability. A Participant shall have all dividend, liquidation and other rights with respect to Stock in accordance with its terms received by him or her as a Restricted Stock Award under this Article VIII upon his or her becoming the holder of record of such Stock; provided, however, that the Participant’s right to sell, encumber or otherwise transfer such Stock shall be subject to the limitations of Sections 12.2 and Article XIII.
8.4 Enforcement of Restrictions. The Committee shall cause a legend to be placed on any Stock certificates issued pursuant to each Restricted Stock Award referring to the restrictions provided by Sections 8.2 and 8.3 and, in addition, may in its sole discretion require one or more of the following methods of enforcing the restrictions referred to in Sections 8.2 and 8.3:
(a) Requiring the Participant to keep any certificates, duly endorsed, in the custody of the Company while the restrictions remain in effect; or
(b) Requiring that any certificates, duly endorsed, be held in the custody of a third party while the restrictions remain in effect.
Article IX
RESTRICTED STOCK UNITS
9.1 Restricted Stock UnitAwards. Each Restricted Stock Unit Award granted under the Plan shall be evidenced by a written restricted stock agreement (a “Restricted Stock Unit Agreement”). Each Restricted Stock Unit Agreement will conform to (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) the substance of each of the following provisions:
(a) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Committee may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.
(b) Settlement. A Restricted Stock Unit Award may be settled by the delivery of Shares, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Committee and contained in the Restricted Stock Unit Agreement.
(c) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Committee, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the Shares (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.
(d) DividendEquivalents. Dividend equivalents may be credited in respect of Shares covered by a Restricted Stock Unit Award, as determined by the Committee and contained in the Restricted Stock Unit Agreement. At the sole discretion of the Committee, such dividend equivalents may be converted into additional Shares covered by the Restricted Stock Unit Award in such manner as determined by the Committee. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all the same terms and conditions of the underlying Restricted Stock Unit Agreement to which they relate.
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(e) Termination ofService. Except as otherwise provided in the applicable Restricted Stock Unit Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited for no consideration upon the Participant’s termination of Service.
(f) Compliance withSection 409A. Notwithstanding anything to the contrary set forth herein, any Restricted Stock Unit Award granted under the Plan that is not exempt from the requirements of Section 409A of the Code shall contain such provisions so that such Restricted Stock Unit Award will comply with the requirements of Section 409A of the Code. Such restrictions, if any, shall be determined by the Committee and contained in the Restricted Stock Unit Agreement evidencing such Restricted Stock Unit Award. For example, such restrictions may include, without limitation, a requirement that any Stock that is to be issued in a year following the year in which the Restricted Stock Unit Award vests must be issued in accordance with a fixed pre-determined schedule.
Article X
STOCK APPRECIATION RIGHTS
10.1 Stock Appreciation Rights. Each Stock Appreciation Right granted under the Plan shall be evidenced by a Stock Appreciation Right Agreement. Stock Appreciation Rights may be granted alone (“Free Standing Rights”) or in tandem with an Option granted under the Plan (“Related Rights”). Each Stock Appreciation Right Agreement will conform to (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) the substance of each of the following provisions:
(a) Grant Requirements for Related Rights. Any Related Right that relates to a Non-Qualified Stock Option may be granted at the same time the Option is granted or at any time thereafter but before the exercise or expiration of the Option. Any Related Right that relates to an Incentive Stock Option must be granted at the same time the Incentive Stock Option is granted.
(b) Term. The term of a Stock Appreciation Right granted under the Plan shall be determined by the Committee; provided, however, no Stock Appreciation Right shall be exercisable later than the tenth anniversary of the Grant Date.
(c) Vesting. At the time of the grant of a Stock Appreciation Right, the Committee may impose such restrictions on or conditions to the vesting of the Stock Appreciation Right as it, in its sole discretion, deems appropriate.
(d) Exerciseand Payment. Upon exercise of a Stock Appreciation Right, the holder shall be entitled to receive from the Company an amount equal to the number of Shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (i) the Fair Market Value of a Share on the date the Award is exercised, over (ii) the exercise price specified in the Stock Appreciation Right or related Option. Payment with respect to the exercise of a Stock Appreciation Right shall be made on the date of exercise. Payment shall be made in the form of Shares (with or without restrictions as to substantial risk of forfeiture and transferability, as determined by the Committee in its sole discretion), cash or a combination thereof, as determined by the Committee.
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(e) Exercise Price. The exercise price of a Free Standing Right shall be determined by the Committee, but shall not be less than 100% of the Fair Market Value of one Share on the date of grant of such Stock Appreciation Right. A Related Right granted simultaneously with or subsequent to the grant of an Option and in conjunction therewith or in the alternative thereto shall have the same exercise price as the related Option, shall be transferable only upon the same terms and conditions as the related Option, and shall be exercisable only to the same extent as the related Option; provided, however, that a Stock Appreciation Right, by its terms, shall be exercisable only when the Fair Market Value per Share subject to the Stock Appreciation Right and related Option exceeds the exercise price per share thereof and no Stock Appreciation Rights may be granted in tandem with an Option unless the Committee determines that the requirements of Section 10.1(a) are satisfied.
(f) Reductionin the Underlying Option Shares. Upon any exercise of a Related Right, the number of Shares for which any related Option shall be exercisable shall be reduced by the number of shares for which the Stock Appreciation Right has been exercised. The number of Shares for which a Related Right shall be exercisable shall be reduced upon any exercise of any related Option by the number of Shares for which such Option has been exercised.
(g) AdditionalRestrictions. At the time of the grant of a Stock Appreciation Right, the Committee, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the Shares (or their cash equivalent) subject to a Stock Appreciation Right Agreement to a time after the vesting of such Stock Appreciation Right.
Article XI
OTHER GRANTS
From time to time during the duration of the Plan, the Board may, in its sole discretion, adopt one or more incentive compensation arrangements for Participants pursuant to which the Participants may acquire Shares, whether by purchase, outright grant, or otherwise, or the cash equivalent of such Shares. Any arrangement may be made subject to the general provisions of the Plan and all Shares issued pursuant to such arrangements that may be made subject to the Plan shall be issued under the Plan.
Article XII
RIGHTS OF PARTICIPANTS
12.1 Employmentor Service. Nothing contained in the Plan or in any Award granted under the Plan shall confer upon any Participant any right with respect to the continuation of employment by, consulting relationship with or Service with the Company or any Affiliate, or interfere in any way with the right of the Company or any Affiliate, subject to the terms of any separate employment agreement or other contract to the contrary, at any time to terminate such Service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award. Whether an authorized leave of absence, or absence in military or government service, shall constitute a termination of Service shall be determined by the Committee at that time.
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12.2 Nontransferabilityof Awards. Except as provided otherwise at the time of grant or thereafter, no right or interest of any Participant in an Option, Restricted Stock Award Restricted Stock Unit Award (prior to the completion of the restriction period applicable thereto), Stock Appreciation Right, or other Award granted pursuant to the Plan, shall be assignable or transferable during the lifetime of the Participant, either voluntarily or involuntarily, or subjected to any lien, directly or indirectly, by operation of law, or otherwise, including execution, levy, garnishment, attachment, pledge or bankruptcy. In the event of a Participant’s death, a Participant’s rights and interests in Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock Appreciation Rights, and other Awards, shall, to the extent provided in Article VII, Article VIII, Article IX, and Article X be transferable by will or the laws of descent and distribution, and payment of any amounts due under the Plan shall be made to, and exercise of any Options may be made by, the Participant’s legal representatives, heirs or legatees. If in the opinion of the Committee a person entitled to payments or to exercise rights with respect to the Plan is disabled from caring for his or her affairs because of mental condition, physical condition or age, payment due such person may be made to, and such rights shall be exercised by, such person’s guardian, conservator or other legal personal representative upon furnishing the Committee with evidence satisfactory to the Committee of such status.
12.3 No PlanFunding. Obligations to Participants under the Plan will not be funded, trusted, insured or secured in any manner. The Participants under the Plan shall have no security interest in any assets of the Company or any Affiliate and shall be only general creditors of the Company.
Article XIII
GENERAL RESTRICTIONS
13.1 InvestmentRepresentations. The Company may require any person to whom an Award is granted, as a condition of exercising such Option or receiving such Restricted Stock Award, Restricted Stock Unit Award, Stock Appreciation Right, or other Award to give written assurances in substance and form satisfactory to the Company and its counsel to the effect that such person is acquiring the Stock for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company or its counsel deems necessary or appropriate in order to comply with federal and applicable state securities laws. Legends evidencing such restrictions may be placed on any Stock certificates.
13.2 Compliance withSecurities Laws. Each Award shall be subject to the requirement that, if at any time counsel to the Company shall advise that the listing, registration or qualification of the Shares subject to such Award upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, is necessary as a condition of, or in connection with, the issuance or purchase of shares thereunder, such Award may not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification.
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13.3 Changes in Accounting or Tax Rules. Except as provided otherwise at the time an Award is granted, notwithstanding anything to the contrary set forth herein, if, during the term of the Plan, any changes in the financial or tax accounting rules applicable to Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock Appreciation Rights, or other Awards shall occur which, in the sole judgment of the Committee, may have a material adverse effect on the reported earnings, assets or liabilities of the Company or the Participant, the Committee shall have the right and power to modify as necessary, any then outstanding and unexercised Options, outstanding Restricted Stock Awards, Restricted Stock Units Awards, Stock Appreciation Rights, and other outstanding Awards as to which the applicable services or other restrictions have not been satisfied to the extent permitted by applicable law.
13.4 Delivery.** Upon exercise of a right granted under this Plan, the Company shall issue Stock or pay any amounts due within a reasonable period thereafter, subject to compliance with Section 409A if and to the extent applicable. Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days shall be considered a reasonable period.
13.5 Change in Time Commitment. If a Participant’s regular level of time commitment in the performance of Service for the Company and any Affiliates is reduced (for example, if the Participant has a change in status from a full-time employee to part-time employee, or if the Participant goes on a leave of absence other than ordinary course vacation and sick days) after the date of grant of any Award to the Participant, the Committee has the right in its sole discretion (and without the need to seek or obtain the consent of the affected Participant) to (a) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment and (b) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award, subject to compliance with applicable law. In the event of any such reduction, the Participant will have no right to any portion of the Award that is so reduced or extended.
13.6 Clawback.** Notwithstanding any other provisions in this Plan, the Company may cancel any Award, require reimbursement of any Award by a Participant, and effect any other right of recoupment of equity or other compensation provided under the Plan in accordance with any Company policies that may be adopted and/or modified from time to time (“Clawback Policy”). In addition, a Participant may be required to repay to the Company previously paid compensation, whether provided pursuant to the Plan or an Award Agreement, in accordance with the Clawback Policy. By accepting an Award, the Participant is agreeing to be bound by the Clawback Policy, as in effect or as may be adopted and/or modified from time to time by the Company in its discretion (including, without limitation, to comply with applicable law or stock exchange listing requirements).
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13.7 Non-UniformDeterminations. The Committee’s determinations under the Plan and Award Agreements need not be uniform and any such determinations may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan (whether or not such persons are similarly situated). Without limiting the generality of the foregoing, the Committee will be entitled, among other things, to make non-uniform and selective determinations under Award Agreements, and to enter into non-uniform and selective Award Agreements, as to the persons to receive Awards and the terms and provisions of such Awards.
13.8 No Obligation to Notify. The Company shall have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Award. Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award.
Article XIV
AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time or from time to time, with or without prior notice, amend, modify, suspend or terminate the Plan, and the Board or the Committee may amend or modify an Award Agreement; provided, however, that no amendment or modification may become effective without approval of the amendment or modification by the stockholders if stockholder approval is required to enable the Plan to satisfy any applicable statutory or regulatory requirements, or if the Company, on the advice of counsel, determines that stockholder approval is otherwise necessary or desirable. Except as otherwise provided in the Plan, no amendment, modification or termination of the Plan or an Award Agreement shall in any manner materially and adversely affect any Options, Restricted Stock Awards, Stock Appreciation Rights, or other Award theretofore granted under the Plan, without the consent of the Participant holding such Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock Appreciation Rights, or other Awards. Notwithstanding anything to the contrary set forth herein, the Board may amend or modify the terms of the Plan or an Award Agreement, retroactively or prospectively, as permitted under Section 13.3 (Changes in Accounting or Tax Rules) or Section 16.3 (Section 409A) hereof with or without the consent of the Participant.
Article XV
WITHHOLDING
15.1 Withholding Requirement. The Company or any Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Participant, or to condition the Company’s obligation to deliver Shares upon the exercise of any Option, the vesting of or lapse of Forfeiture Restrictions or repurchase rights with respect to any Restricted Stock Award or Restricted Stock Unit Award, to exercise Stock Appreciation Rights, or to grant Stock upon the payment by the Participant of, any federal, state, local or foreign taxes of any kind required by applicable law with respect to the grant or issuance of, or the vesting of or other lapse of restrictions applicable to, the applicable Award or the Shares subject to, or issuable upon exercise of, such Award. At the time of such grant, issuance, vesting or lapse, the Participant shall pay to the Company or Affiliate, as the case may be, any amount that the Company or Affiliate may reasonably determine to be necessary to satisfy such withholding obligation.
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15.2 Withholding With Stock. At the time the Committee grants an Award or at any time thereafter, it may, in its sole discretion, grant the Participant an election to pay all such amounts of tax withholding, or any part thereof, by electing (a) to have the Company withhold from Shares otherwise issuable to the Participant, Shares having a value equal to the amount required to be withheld or such lesser amount as may be elected by the Participant; provided however, that the number of Shares so withheld shall not exceed the maximum amount required to be withheld (or such lesser amount as may be necessary to avoid classification as a liability under applicable accounting standards), or (b) to transfer to the Company a number of Shares that were acquired by the Participant more than six months prior to the transfer to the Company and that have a value equal to the amount required to be withheld or such lesser amount as may be elected by the Participant. All elections shall be subject to the approval or disapproval of the Committee. The value of Shares to be withheld shall be based on the Fair Market Value of the Stock on the date that the amount of tax to be withheld is to be determined (the “Tax Date”). Any such elections by Participants to have Shares withheld for this purpose will be subject to the following restrictions:
(a) All elections must be made prior to the Tax Date.
(b) All elections shall be irrevocable.
(c) If the Participant is an officer or director of the Company within the meaning of Section 16 of the Exchange Act (“Section 16”), the Participant must satisfy the requirements of Section 16 and any applicable rules thereunder with respect to the use of Stock to satisfy such tax withholding obligation.
Article XVI
REQUIREMENTS OF LAW
16.1 Requirements of Law. The issuance of Stock and the payment of cash pursuant to the Plan shall be subject to all applicable laws, rules and regulations.
16.2 Federal Securities Law Requirements. If a Participant is an officer or director of the Company within the meaning of Section 16, Awards granted hereunder shall be subject to all conditions required under Rule 16b-3, or any successor rule promulgated under the Exchange Act, to qualify the Award for any exception from the provisions of Section 16(b) of the Exchange Act available under that Rule. Such conditions shall be set forth in the agreement with the Participant which describes the Award or other document evidencing or accompanying the Award.
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16.3 Section409A*.* Notwithstanding anything to the contrary set forth herein, the Plan and Awards made under the Plan will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards exempt from Section 409A of the Code, and to the extent not so exempt, in compliance with the requirements imposed by Section 409A of the Code. If any Plan provision or Award would result in the imposition of an additional tax under Section 409A of the Code, the Company and the Participant intend that the Plan provision or Award will be reformed to avoid imposition, to the extent possible, of the applicable tax and no action taken to comply with Section 409A of the Code shall be deemed to adversely affect the Participant’s rights to an Award. The Participant further agrees that the Committee, in the exercise of its sole discretion and without the consent of the Participant, may amend or modify an Award in any manner and delay the payment of any amounts payable pursuant to an Award to the minimum extent necessary to meet the requirements of Section 409A of the Code as the Committee deems appropriate or desirable. The Company makes no representation that the Plan or any Award complies with Section 409A of the Code and shall have no liability to any Participant for any failure to comply with Section 409A of the Code. A termination of employment or service shall not be deemed to have occurred for purposes of any provision of the Plan or any Award Agreement providing for the payment of any amount or benefit that constitutes a “nonqualified deferred compensation plan” upon or following a termination of employment or service, unless such termination is also a “separation from service” within the meaning of Section 409A of the Code, and, for purposes of any such provision of the Plan or any Award Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” Notwithstanding anything to the contrary set forth herein or in any Award Agreement, if the Participant is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or benefit in respect of an Award that is considered “nonqualified deferred compensation” under Section 409A of the Code payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of (a) the expiration of the six-month period measured from the date of such “separation from service” of the Participant and (b) the date of the Participant’s death, solely to the extent required under Section 409A of the Code. Upon the expiration of the foregoing delay period, all payments and benefits in respect of such Award delayed pursuant to the foregoing (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Participant in a lump sum, and all remaining payments and benefits due in respect of such Award under the Plan or any Award Agreement, as applicable, shall be paid or provided in accordance with the normal payment dates specified for them herein.
16.4 Governing Law. The Plan and all agreements hereunder shall be construed in accordance with and governed by the laws of the State of Delaware excluding its conflict of laws rules.
Article XVII
DURATION OF THE PLAN
The Plan, as set forth herein, shall become effective on the date of its adoption by the Board, subject to approval of the Company’s stockholders as provided in this Article XVII. To the extent required by applicable law, the Plan will be subject to the approval of the Company’s stockholders within 12 months of its adoption date. Unless sooner terminated by the Board, the Plan shall terminate at the close of business on the day immediately following the 10th anniversary of the date when the Board adopted the Plan and no Award shall be granted, or offer to sell Stock made, under the Plan after such termination. Awards outstanding at the time of the Plan termination may continue to vest, be exercised or otherwise become free of restrictions, or be paid, in accordance with their terms.
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Exhibit 10.10
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (“Agreement”) is made by and between Terrestrial Energy Inc., a Delaware corporation (the “Company”), and Simon Irish (“Executive”), effective as of October 28, 2025 (the “Effective Date”).
WHEREAS, the Company desires to continue to employ Executive upon the terms and conditions set forth herein, and Executive desires to continue his employment with the Company upon such terms and conditions.
NOW, THEREFORE, for and in consideration of the above recitals and the mutual promises contained herein, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Company and Executive agree as follows:
| 1. | EMPLOYMENT ANDDUTIES. |
|---|---|
| 1.1 | Position**.** |
| --- | --- |
| 1.1.1 | Executive shall be employed by the Company as its Chief Executive Officer, reporting to the Company’s<br>board of directors (the “Board”), subject to the terms and conditions of this Agreement. At the Company’s<br>request, Executive shall serve the Company and/or its subsidiaries and affiliates (together with the Company, the “Companies”)<br>in other capacities in addition to the foregoing, consistent with Executive’s position as Chief Executive Officer of the Company.<br>In the event that Executive, during the Term (as defined in Section 2 of this Agreement), serves in any one or more of such additional<br>capacities, Executive’s compensation shall not be increased beyond that specified in Section 3 of this Agreement. In addition, in<br>the event Executive’s service in one or more of such additional capacities is terminated, Executive’s compensation, as specified<br>in Section 3 of this Agreement, shall not be diminished or reduced in any manner as a result of such termination provided that Executive<br>otherwise remains employed under the terms of this Agreement. |
| --- | --- |
| 1.1.2 | Executive shall continue to serve as a member of the Board and, at the end of each of Executive’s<br>terms as a member of the Board that fall during the Term, and so long as Executive is serving as the Chief Executive Officer of the Company,<br>the Company agrees to nominate Executive to be elected as a member of the Board. |
| --- | --- |
| 1.1.3 | The principal place of Executive’s employment shall be at the Company’s Charlotte, NC, offices<br>or as otherwise determined by the Board, provided that Executive may be required to travel on Company business during the Term. If the<br>Executive does not live in the Charlotte, NC area, the Company shall reimburse the Executive’s reasonable travel expenses to the<br>Charlotte, NC office in accordance with its travel policies and procedures and, as applicable, to discuss arrangements for the reimbursement<br>of reasonable temporary housing expenses in Charlotte, NC. If the Executive relocates to the Charlotte, NC area for his employment<br>with the Company, the Company will reimburse his reasonable relocation expenses in accordance with the Company’s relocation policies<br>and procedures and involvement of the Board (or committee thereof) as may be necessary. |
| --- | --- |
| 1.2 | Full Attention**.** Executive<br>shall devote his full business time exclusively to the affairs of the Company and the discharge of his duties and responsibilities hereunder.<br>Executive shall not, without the consent of the Company, engage in any other business activity or serve in any industry, trade, professional,<br>governmental or academic position during the term of this Agreement; provided that, the foregoing shall not limit Executive’s ability<br>to (a) participate in reasonable levels of charitable, civic, trade organization, and similar activities, (b) with prior written notice<br>to the Board, serve on the boards of directors or as a member of a committee of one or more non-profit organizations, or (c) manage Executive’s<br>passive personal investment activities, provided that such activities do not, individually or in the aggregate, create an actual or apparent<br>conflict of interest, violate any provision of this Agreement or any other agreement between Executive and the Company, or otherwise materially<br>interfere with the performance of Executive’s duties under this Agreement, as determined by the Board in its sole discretion. |
| --- | --- |
| 1.3 | Confidentiality Agreement**.**<br>As a condition of employment, Executive shall sign and comply with all provisions of the Employee Confidentiality Agreement attached as<br>Addendum 1 hereto, as well as any successor agreement thereto (the “Confidentiality Agreement”),<br>and Executive acknowledges that his employment is adequate consideration for such agreement. |
| --- | --- |
| 2. | TERM**.**This Agreement shall be effective on the Effective Date. Executive’s continued employment with the Company pursuant to the terms<br>set forth in this Agreement shall commence on the Effective Date and shall continue until terminated as provided in Section 4 of this<br>Agreement. The period of Executive’s employment pursuant to this Agreement shall be the “Term.” |
|---|
| 3. | COMPENSATION ANDBENEFITS**.** During the Term, the Company shall provide the following compensation and benefits to Executive: |
|---|---|
| 3.1 | Base Salary**.** Executive<br>shall receive an annualized base salary of Five Hundred Thousand Dollars ($500,000). The Base Salary shall be subject to annual review<br>by the Board (or a committee thereof) and may be adjusted from time to time by the Board (or a committee thereof). The Base Salary shall<br>be paid in accordance with the Company’s standard payroll practices as they may exist from time to time. The base salary as determined<br>herein and adjusted from time to time shall constitute the “Base Salary” for purposes of this Agreement. |
| --- | --- |
| 3.2 | Annual Bonus**.** During<br>each fiscal year of the Company during the Term (prorated for partial years of service), Executive shall be eligible for an annual performance<br>bonus (“Annual Bonus”) with a target opportunity equal to sixty percent (60%) of Base Salary, based upon the<br>achievement by Executive and/or the Company of performance goals established by the Board<br>(or a committee thereof) at its sole discretion. Any Annual Bonus payable hereunder shall be paid in the fiscal year of the Company immediately<br>following the fiscal year to which such Annual Bonus relates, at the same time as annual performance bonuses are paid to other senior<br>executives of the Company, but in no event later than thirty (30) days following the Company’s receipt of the audited financials<br>with respect to such fiscal year, subject to Executive’s continued employment through the applicable payment date (other than as<br>set forth in Section 4.6 of this Agreement). For the avoidance of doubt, the Annual Bonus shall not be considered earned or payable to<br>Executive if Executive is not an active employee on the date such Annual Bonus is scheduled to be paid (other than as set forth in Section<br>4.6 of this Agreement). |
| --- | --- |
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| 3.3 | Long-Term Equity Incentive Awards**.** | ||
|---|---|---|---|
| 3.3.1 | Generally. Executive shall be eligible to participate in the Company’s 2025 Equity Incentive<br>Plan and such other equity-based compensation plans or programs as may adopted by the Company for its senior executives from time to time,<br>at such level and in such amounts as may be determined by the Board (or a committee thereof) in its sole discretion and subject to the<br>terms and conditions of such equity-based plans or programs and any applicable award agreements thereunder. | ||
| --- | --- | ||
| 3.3.2 | Initial Equity Award. Subject to the approval of the Board (or a committee thereof), the Company<br>shall, as soon as reasonably practical but in no event later than ninety (90) days after the Effective Date, grant Executive an award<br>of restricted stock units covering shares of the Company’s common stock with a grant date value of $3 million, as determined by<br>the Board (or a committee thereof). The restricted stock unit grants shall be governed by and subject to the terms of the Company’s<br>2025 Equity Incentive Plan and the applicable award agreement thereunder, including, but not limited to, (a) a three-year vesting schedule<br>with the restricted stock units vesting in equal annual installments over the three-year period following the grant date, subject to Executive’s<br>continued employment through each applicable vesting date (other than as set forth in Section 4.6 of this Agreement), and (b) such other<br>terms as determined by the Board (or a committee thereof) in its sole discretion. | ||
| --- | --- | ||
| 3.4 | Vacation**.** Executive<br>shall be eligible for paid vacation in accordance with the Company’s vacation policies as they may exist from time to time. | ||
| --- | --- | ||
| 3.5 | Other Employment Benefits**.<br>Executive shall be allowed to participate in the Company’s other benefit plans and programs on the same basis as other Company executives,<br>subject to the eligibility requirements of such plans or programs. Such benefit plans and programs may be adopted, modified or terminated<br>by the Company from time to time in its sole discretion and may include, without limitation, medical, health and dental care, life insurance,<br>disability protection, 401(k) and retirement plans. | ||
| --- | --- | ||
| 3.6 | Expense Reimbursement.**The Company shall reimburse Executive for out-of-pocket expenses reasonably incurred by Executive in the performance of Executive’s<br>duties under this Agreement, subject to the Company’s policies regarding expense reimbursement as they may exist from time to time. | ||
| --- | --- | ||
| 3.7 | Indemnification. Executive shall be covered by any policy of liability insurance which the<br>Company maintains during Executive’s employment for its officers and directors (“D&O Insurance”),<br>to the maximum extent of such coverage provided any other executive officer of the Company. In addition to any rights Executive may have<br>under such D&O Insurance, applicable law, or the operating agreement, articles of incorporation, bylaws, or similar governing documents<br>of the Company and except as may be prohibited by applicable law, the Company agrees to indemnify Executive for actions taken by Executive<br>as an officer or director of the Company and/or its affiliates and for claims arising out of or relating to Executive’s service<br>to the Company or any of its affiliates, except to the extent such claims are attributable to Executive’s gross negligence, willful<br>misconduct, dishonesty, illegal activity, or other actions outside the scope of Executive’s employment with the Company. | ||
| --- | --- |
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| 3.8 | Clawback**.**<br>Notwithstanding any other provision of this Agreement to the contrary, any incentive-based or other compensation paid to Executive under<br>this Agreement or any other agreement or arrangement with the Company which is subject to recovery under any law, government regulation,<br>or stock exchange listing requirement will be subject to such deductions and clawback as may be required to be made pursuant to such law,<br>government regulation, stock exchange listing requirement, or policy adopted by the Company pursuant to any such law, government regulation,<br>or stock exchange listing requirement. |
|---|
| 4. | TERMINATION**.Executive’s employment with the Company may be terminated as provided in this Section 4. This Agreement shall terminate upon<br>the termination of Executive’s employment with the Company; provided, however, that termination of this Agreement shall not relieve<br>either party of obligations or restrictions under this Agreement or the Confidentiality Agreement which by their terms are to be performed<br>or remain in force after termination of employment. Notwithstanding any other provision in this Agreement or in any other document, on<br>termination of Executive’s employment hereunder for any reason, Executive shall be deemed to have resigned from all positions Executive<br>holds as an officer or member of the Board (or a committee thereof) or the board of directors (or a committee thereof) of any of the Company’s<br>affiliates. | ||
|---|---|---|---|
| 4.1 | Termination by Company for Cause.<br>The Company may terminate Executive’s employment for Cause at any time upon written notice to Executive, effective immediately or<br>upon such later date as may be specified in the notice. As used in this Agreement, “Cause” shall mean Executive’s:<br>(a) conviction of or plea of guilty or no-contest to any felony or any crime involving dishonesty or moral turpitude (meaning a crime<br>that includes the commission of an act of depravity or poor morals); (b) material violation of law, or act of fraud or material dishonesty,<br>in connection with Executive’s employment;<br>(c) refusal or intentional failure to comply with any material lawful written directive of the Board; (d) material breach of Executive’s<br>fiduciary duty or duty of loyalty to the Company; (e) material breach of this Agreement, the Confidentiality Agreement, or any other contract<br>with the Company that is not cured (if capable of cure, as determined by the Company in its reasonable judgment) within ten (10) days<br>after written notice to Executive identifying the breach; or (f) material violation of any written Company policy that is not cured (if<br>capable of cure, as determined by the Company in its reasonable judgment) within ten (10) days after written notice to Executive identifying<br>the violation, in each case, as determined by the Board in its discretion. | ||
| --- | --- | ||
| 4.2 | Termination by Company Without Cause.<br>The Company may terminate Executive’s employment without Cause at any time upon sixty (60) days’ prior written notice to Executive.<br>For all or any part of the period between the date of such notice and the effective date of such notice, the Company may, at its sole<br>discretion, require Executive to work from home or other remote location, relieve Executive of all or any part of Executive’s duties,<br>place Executive on paid administrative leave, or any combination thereof. | ||
| --- | --- | ||
| 4.3 | Termination by Executive.Executive may terminate Executive’s employment at any time upon sixty (60) days’ written notice to the Company. For all<br>or any part of the period between the date of such notice and the effective date of such notice, the Company may, at its sole discretion,<br>require Executive to work from home or other remote location, relieve Executive of all or any part of Executive’s duties, place<br>Executive on paid administrative leave, or any combination thereof. | ||
| --- | --- | ||
| 4.4 | Termination upon Death or Disability.**Executive’s employment will terminate automatically upon Executive’s death. The Company may terminate Executive’s<br>employment for Disability at any time upon written notice to Executive or Executive’s legal representative, with immediate effect.<br>As used in this Agreement, “Disability” means the inability of Executive to have performed Executive’s<br>material duties hereunder after reasonable accommodation due to a physical or mental injury, infirmity or incapacity for one hundred eighty<br>(180) days (including weekends and holidays) in any three hundred sixty-five (365)-day period as determined by the Board in its reasonable<br>discretion. Executive shall cooperate in all respects with the Company if a question arises as to whether Executive has become disabled<br>(including, without limitation, submitting to reasonable examinations by one or more medical doctors and other health care specialists<br>selected by the Company and authorizing such medical doctors and other health care specialists to discuss Executive’s condition<br>with the Company). For the avoidance of doubt, a termination by the Company for Disability shall not constitute a termination by the Company<br>without Cause. | ||
| --- | --- |
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| 4.5 | Termination by Agreement**.**Executive’s employment with the Company may be terminated at any time by written agreement of the parties. |
|---|---|
| 4.6 | Payment upon Termination. |
| --- | --- |
| 4.6.1 | Accrued Payments. Upon the termination<br>of Executive’s employment with the Company, Executive shall be entitled to payment of (a) earned but unpaid Base Salary through<br>the date of termination, (b) any earned but unpaid Annual Bonus from a previous fiscal year of the Company (other than in the event Executive<br>is terminated for Cause in accordance with Section 4.1 of this Agreement), (c) reimbursement of business expenses incurred during employment<br>in accordance with Section 3.6 of this Agreement, and (d) any benefits accrued and vested as of the date of termination in accordance<br>with the applicable benefit plans, programs, or policies of the Company (collectively, the “Accrued Payments”).<br>Executive shall not be entitled to severance pay or other similar termination payment or benefit of any kind except as expressly provided<br>in Section 4.6.2 of this Agreement. |
| --- | --- |
| 4.6.2 | Severance. If the Company terminates<br>Executive’s employment (actually and not constructively) without Cause, and provided that Executive (a) is in compliance with this<br>Agreement and the Confidentiality Agreement and (b) executes and returns to the Company a complete release of all claims against the Company<br>and related persons in a form acceptable to the Company that becomes effective and irrevocable within sixty (60) days after the effective<br>date of such termination (the “Termination Date”), the Company shall, in addition to payment of the Accrued<br>Payments: |
| --- | --- |
| (a) | pay severance to Executive in an amount equal to (i) twelve (12) months of Base Salary at the rate in<br>effect as of the Termination Date, which shall be paid in equal installments on the Company’s regular paydays over a period of twelve<br>(12) months commencing on the Termination Date or (ii) twenty-four (24) months of Base Salary at the rate in effect as of the Termination<br>Date, if such termination occurs in the three (3) months preceding or in the twelve (12) months following a Change in Control (as defined<br>in Section 6.2.3), which shall be paid in equal installments on the Company’s regular paydays over a period of twenty-four (24)<br>months commencing on the Termination Date (with each of the twelve (12) month or twenty-four (24) month periods, as applicable, the “SeverancePeriod”); |
| --- | --- |
| (b) | pay to Executive an amount equal to the full target Annual Bonus for the fiscal year in which the Termination<br>Date occurs, which shall be paid in a lump sum on the first regular payroll date of the Company that is at least sixty (60) days after<br>the Termination Date; |
| --- | --- |
| (c) | accelerate the vesting of any time-based vesting equity awards that are scheduled to vest in the twelve<br>(12) month period following the Termination Date; and |
| --- | --- |
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| (d) | subject to Executive’s timely election of continuation coverage under the Consolidated Omnibus Budget<br>Reconciliation Act of 1985, as amended (“COBRA”), the Company will reimburse Executive for the monthly COBRA<br>premium paid by Executive for Executive and Executive’s eligible dependents (if any) until the earliest to occur of (A) the end<br>of the Severance Period, (B) the date on which Executive is no longer eligible for COBRA continuation coverage, and (C) the date on which<br>Executive becomes eligible to participate in another plan that offers group health benefits, provided that the Company may modify the<br>subsidized COBRA continuation coverage contemplated hereby to the extent reasonably necessary to avoid the imposition of any excise taxes<br>on the Company for failure to comply with the nondiscrimination requirements of Section 105(h) of the Internal Revenue Code of 1986, as<br>amended (the “Code”), the Patient Protection and Affordable Care Act of 2010, as amended, and/or the Health<br>Care and Education Reconciliation Act of 2010, as amended, and in each case, the regulations and guidance promulgated thereunder (to the<br>extent applicable). Executive shall provide prompt written notice to the Company in the event of the occurrence of clause (C) in the preceding<br>sentence. |
|---|
Provided, however, that: (A) the first such payment under this Section 4.6.2 shall be paid or commence to be paid on the first regular payroll date of the Company that is at least sixty (60) days after the Termination Date and shall include all sums that would have been paid had payment commenced on the first payday after the Termination Date; (B) the Severance Period shall terminate immediately upon Executive’s breach of this Agreement or the Confidentiality Agreement; and (C) if the sixty (60)-day period within which the release must become effective spans two (2) calendar years, no payment pursuant to this Section 4.6.2 shall be made before the first business day of the second calendar year.
| 5. | NONCOMPETITIONAND NONSOLICITATION**.** Executive acknowledges that Executive will be continue to be a member of executive and management<br>personnel at the Company. Executive further acknowledges that during Executive’s employment with the Company, Executive has been<br>and will continue to be privy to extremely sensitive, confidential and valuable commercial information of the Companies, which constitutes<br>trade secrets belonging to the Companies, the disclosure of which information and secrets would greatly harm the Companies. As a reasonable<br>measure to protect the Companies from the harm of disclosure and use of their trade secrets and other confidential information against<br>them, Executive agrees to the following restrictions: | ||
|---|---|---|---|
| 5.1 | Covenant Not to Compete**.<br>During the Restricted Period, Executive shall not engage in Competition within the Restricted Territory. | ||
| --- | --- | ||
| 5.2 | Customer and Business Partner Nonsolicitation Covenant.** During the Restricted Period, Executive shall not, except in furtherance of<br> Executive’s duties as an employee of the Company, directly<br>or indirectly solicit, induce or encourage, or attempt to solicit, induce or encourage, any Protected Customer or cause or attempt to<br>cause any Business Partners to terminate, reduce or otherwise alter to the detriment of the Companies such Person’s relationship<br>with any of the Companies. | ||
| --- | --- | ||
| 5.3 | Employee Nonsolicitation Covenant**.**During the Restricted Period, Executive shall not, except in furtherance of Executive’s duties as an employee of the Company,<br>directly or indirectly solicit, induce or encourage, or attempt to solicit, induce or encourage, any employee, contractor or other service<br>provider of the Companies to terminate, reduce or otherwise alter to the detriment of the Companies such Person’s relationship with<br>the Companies. Notwithstanding the foregoing, this Section 5.3 shall not prohibit general advertisements for employment that are not targeted<br>at employees of the Companies. | ||
| --- | --- |
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| 5.4 | Definitions. |
|---|---|
| 5.4.1 | “Business” shall<br>mean (a) development, deployment, and ongoing operational activities related to Integral Molten Salt Reactor technology and (b) any other<br>business activities engaged in by any of the Companies at any time during the most recent eighteen (18) months of Executive’s employment<br>with the Company. |
| --- | --- |
| 5.4.2 | “Business Partners” means any of the Companies’ vendors, suppliers, joint<br>venturers, licensors, referral sources, or other business relationships about whom Executive had any Confidential Information that may<br>be of value to Executive or a third party engaged in the Business in seeking to transact business with such person or entity, or with<br>respect to whom Executive had any relationship responsibilities, either directly or through managing other employees who had such relationship<br>responsibilities. |
| --- | --- |
| 5.4.3 | “Competition” shall mean directly or indirectly (a) engaging in all or any material<br>part of the Business or (b) owning, operating, managing, financing or providing any services or assistance that are substantially similar<br>to the services or assistance provided to the Company, whether as owner, shareholder, member, partner, joint venturer, lender, financier,<br>licensor, licensee, franchisor, franchisee, principal, agent, director, officer, manager, employee, consultant, broker, trustee, or in<br>any other capacity whatsoever. Notwithstanding the foregoing, Executive’s passive ownership of not more than one percent (1%) of<br>the outstanding voting stock of a publicly-traded company shall not, in itself, constitute Competition provided that Executive has no<br>involvement in the management or operation of such company. |
| --- | --- |
| 5.4.4 | “Person” shall<br>mean any natural person, proprietorship, partnership, corporation, limited liability corporation, bank, organization, firm, business,<br>joint venture, association, trust or other entity and any government agency, body or authority. |
| --- | --- |
| 5.4.5 | “Protected Customer”<br>shall mean any Person (a) that was a customer of any of the Companies at any time during the most recent two (2) years of Executive’s<br>employment with the Company and (b) with whom Executive had material work-related contact, or about whom Executive acquired confidential<br>information, as an employee of the Company. |
| --- | --- |
| 5.4.6 | “Restricted Period”<br>shall mean the period of Executive’s employment with the Company and the period of twelve (12) months immediately following the<br>Termination Date. |
| --- | --- |
| 5.4.7 | “Restricted Territory”<br>shall mean Canada and the United States of America. |
| --- | --- |
| 5.5 | Reasonable**.** The restrictions<br>in this Section shall apply only to prevent Executive from providing services in the business and industry segments in which Executive<br>provided services for or on behalf of the Company, or regarding which Executive had any Confidential Information, in either case at any<br>time during the final eighteen (18) months of Executive’s employment. Executive acknowledges that the time limitation, territorial<br>restriction and restriction on activities described herein are reasonable in scope and are appropriate to protect the Companies’<br>trade secrets, goodwill and other protectable interests. Executive further acknowledges and agrees that Executive has received adequate<br>consideration for the restrictions described herein and that such restrictions will not prevent Executive from earning a living. |
| --- | --- |
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| 5.6 | Enforcement**.** Executive<br>acknowledges and agrees that any breach by Executive of any covenant in this Section 5 will cause the Company irreparable injury and damage<br>and that the Company shall therefore be entitled to, in addition to all other remedies available to it, injunctive and other equitable<br>relief (without the necessity of posting a bond) to prevent or stop such breach and to secure the enforcement of this Agreement. Should<br>a court or arbitrator of competent jurisdiction determine that any restriction described herein is overly broad or otherwise unenforceable,<br>in whole or in part, the parties agree that the court shall modify such restriction to the minimum extent necessary to render the restriction<br>enforceable. |
|---|
| 6. | TAX MATTERS |
|---|---|
| 6.1 | Compliance with Section 409A of the Code**.**<br>The intent of the parties is that payments and benefits under this Agreement are exempt from or comply with Section 409A of the Code (“Section409A”), to the extent subject thereto, and accordingly, to the maximum extent permitted, this Agreement shall be interpreted<br>to be in compliance with Section 409A or an exemption thereunder. Any payments under this Agreement that may be excluded from Section<br>409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section<br>409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated<br>as a separate payment. Any payments to be made under this Agreement upon a termination of employment shall only be made upon a “separation<br>from service” under Section 409A. Notwithstanding<br>any other provision of this Agreement, if any payment or benefit provided to Executive in connection with Executive’s termination<br>of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and Executive<br>is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not<br>be paid until the first regular payroll date of the Company following the six-month anniversary of the Termination Date or, if earlier,<br>on Executive’s death (the “Specified Employee Payment Date”). The aggregate of any payments that would<br>otherwise have been paid before the Specified Employee Payment Date shall be paid to Executive in a lump sum on the Specified Employee<br>Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. To the extent<br>required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to Executive under this Agreement for expenses<br>shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of<br>expenses eligible for reimbursement during one year may not affect the amounts reimbursable in any subsequent year. Notwithstanding any<br>other provision in this Agreement or in any other document, the Company shall not be responsible for the payment of any applicable taxes<br>incurred by Executive pursuant to this Agreement, including with respect to compliance pursuant to Section 409A. The Company makes no<br>representation that any or all of the payments and benefits described in this Agreement will be exempt from or comply with Section 409A. |
| --- | --- |
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| 6.2 | Section 280G. |
|---|---|
| 6.2.1 | If any of the payments or benefits received or to be received by Executive (including, but not limited<br>to, any payment or benefits received in connection with a Change in Control or Executive’s termination of employment, whether pursuant<br>to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred to<br>herein as the “280G Payments”) constitute “parachute payments” within the meaning of Section 280G<br>of the Code, and would, but for this Section 6.2, be subject to the excise tax imposed under Section 4999 of the Code (the “ExciseTax”), then prior to making the 280G Payments, a calculation shall be made comparing (a) the Net Benefit to Executive of<br>the 280G Payments after payment of the Excise Tax to (b) the Net Benefit to Executive if the 280G Payments are limited to the extent necessary<br>to avoid being subject to the Excise Tax. Only if the amount calculated under (a) above is less than the amount under (b) above will the<br>280G Payments be reduced to the minimum extent necessary to ensure that no portion of the 280G Payments is subject to the Excise Tax.<br>“Net Benefit” shall mean the present value of the 280G Payments net of all federal, state, local, foreign income,<br>employment, and excise taxes. |
| --- | --- |
| 6.2.2 | Any reduction made pursuant to this Section 6.2 shall be made in a manner determined by the Company that<br>is consistent with the requirements of Section 409A. All calculations and determinations<br>under this Section 6.2 shall be made by an independent accounting firm or independent tax counsel appointed by the Company (the **** “TaxCounsel”) whose determinations shall be conclusive and binding on the Company and Executive for all purposes. For purposes<br>of making the calculations and determinations required by this Section 6.2, the Tax Counsel may rely on reasonable, good faith assumptions<br>and approximations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive shall furnish the Tax Counsel<br>with such information and documents as the Tax Counsel may reasonably request to make its determinations under this Section 6.2. The Company<br>shall bear all costs the Tax Counsel may reasonably incur in connection with its services. |
| --- | --- |
| 6.2.3 | “Change in Control” shall have the meaning ascribed to such term in the Company’s<br>2025 Equity Incentive Plan, as amended from time to time, or if not defined therein, shall mean, after the Effective Date: (a) any change<br>in the ownership or control of the common stock of the Company which results in more than fifty percent (50%) of the issued and outstanding<br>common stock of the Company being owned or controlled by a person or entity, or a group of persons or entities, who did not own or control<br>more than fifty percent (50%) of the issued and outstanding common stock of the Company as of the date of this Agreement; (b) the merger<br>or consolidation of the Company with another entity such that more than fifty percent (50%) of the issued and outstanding equity interests<br>of the surviving entity is owned or controlled by a person or entity, or a group of persons or entities, who did not own or control more<br>than fifty percent (50%) of the issued and outstanding common stock of the Company as of the date of this Agreement; or (c) the sale of<br>all or substantially all of the operating assets of the Company. Notwithstanding the foregoing definition, if necessary for compliance<br>with Section 409A of the Code, a Change in Control shall not occur unless such transaction satisfies the foregoing and constitutes a change<br>in the ownership of the Company, a change in the effective control of the Company or a change in the ownership of a substantial portion<br>of the Company’s assets under Section 409A of the Code. |
| --- | --- |
| 6.3 | Withholding. All payments<br>pursuant to this Agreement shall be subject to withholding for taxes as required by applicable law. |
| --- | --- |
9
| 7. | ADDITIONAL PROVISIONS. |
|---|---|
| 7.1 | Notices**.** All notices<br>to be given to a party hereto shall be properly given (a) on the date the notice is hand-delivered, (b) on the day after the notice is<br>deposited with UPS or FedEx for overnight delivery to the address shown below or such other address as the party may have designated by<br>notice to the other party, or (c) on third day after the notice is deposited in the United States mail, with first class postage prepaid,<br>addressed to such party at the address shown below or such other address as the party may have designated by notice to the other party: |
| --- | --- |
| The Company: | Executive: |
| --- | --- |
| Terrestrial Energy Inc. <br><br>2730 W Tyvola Road, Suite 100 <br><br>Charlotte, NC 28217 <br><br>Attn: Chair of Compensation Committee of the Board of Directors <br><br>With a copy to: General Counsel | Simon Irish, at the address shown on the records of the Company |
| 7.2 | Severability**.** If<br>any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions will be unaffected and will remain enforceable<br>according to their term. |
| --- | --- |
| 7.3 | Modification; Waiver. Except<br>for judicial modification as provided in Section 5.6, this Agreement cannot be amended or modified except by a writing signed by each<br>of the parties. No waiver of any provision shall be deemed to have occurred unless memorialized in a writing signed by the waiving party.<br>If either party should waive any breach of any provision of this Agreement, such party will not thereby be deemed to have waived any preceding<br>or succeeding breach of the same or any other provision of this Agreement. |
| --- | --- |
| 7.4 | Cooperation**.**<br>Upon the receipt of reasonable notice from the Company (including its outside counsel), Executive agrees that during the Term and thereafter,<br>Executive will respond and provide information with regard to matters in which Executive has knowledge as a result of Executive’s<br>employment or service with the Companies, and will provide reasonable assistance to the Companies and their respective representatives<br>in defense of all claims that may be made against the Companies, and will assist the Companies in the prosecution of all claims that may<br>be made by the Companies, to the extent that such claims may relate to the period of Executive’s employment or service with the<br>Companies. Executive agrees to promptly inform the Companies if Executive becomes aware of any lawsuit involving such claims that is likely<br>to be filed or threatened against the Companies. Executive also agrees to promptly inform the Companies (to the extent that Executive<br>is legally permitted to do so) if Executive is asked to assist in any investigation of the Companies (or their actions), regardless of<br>whether a lawsuit or other proceeding has then been filed against the Companies with respect to such investigation, and shall not do so<br>unless legally required. Upon presentation of appropriate documentation, the Company shall reimburse Executive for any reasonable expenses<br>Executive incurs in connection with Executive’s cooperation under this provision and, in connection with Executive’s cooperation<br>after the Term and following the period during which Executive is receiving any severance payments, provide reasonable compensation for<br>time expended (including reasonable preparation time) in connection with such cooperation at an hourly rate based on Executive’s<br>Base Salary on the Termination Date. |
| --- | --- |
10
| 7.5 | Governing Law; Mandatory Arbitration**.** |
|---|---|
| 7.5.1 | This Agreement shall be governed by the laws of the State of Delaware and applicable federal law, without<br>regard to any state’s principles regarding conflict of laws. |
| --- | --- |
| 7.5.2 | Except as provided in Subsection 7.5.3, any claim, cause of action or dispute arising out of or relating<br>to this Agreement (“Covered Claim”) shall be resolved solely and exclusively by binding arbitration before a<br>single arbitrator, administered by the American Arbitration Association (“AAA”) pursuant to its then-current<br>rules of employment arbitration (current copies of which are found at www.adr.org), except to the extent that such rules conflict with<br>this Agreement, and governed by the Federal Arbitration Act. Executive and the Company hereby irrevocably waive their right to have any<br>Covered Claim heard by a judge or jury. Unless otherwise agreed by the parties, the arbitration shall be conducted in Charlotte, North<br>Carolina (the “Arbitration Venue”). All questions regarding the arbitrability of any claim, whether procedural<br>or substantive in nature, shall be resolved exclusively by the arbitrator and not by a court. All arbitration proceedings shall be private<br>and confidential, and the arbitrator shall exclude all persons except those determined by the arbitrator to be necessary to such proceeding.<br>The arbitrator shall have the power to award all remedies that could be ordered by a court in the Arbitration Venue. Unless otherwise<br>ordered by the arbitrator, the Company shall pay all fees and costs charged by AAA and the arbitrator for the arbitration proceeding.<br>The arbitrator’s award shall be final and binding upon the parties, and judgment may be entered upon it in accordance with applicable<br>law in any court of competent jurisdiction. |
| --- | --- |
| 7.5.3 | Notwithstanding the foregoing, either party may file suit in a federal or state court in or for the Arbitration<br>Venue to (a) compel arbitration pursuant to this Agreement and/or (b) obtain temporary and/or preliminary injunctive relief (without the<br>necessity of posting a bond or other security) to prevent irreparable harm pending arbitration. The parties hereby irrevocably submit<br>to the jurisdiction of such courts for such purpose and irrevocably waive any right that they may have to object to proceeding in such<br>courts, including but not limited to objections based on lack of personal jurisdiction, improper venue, or inconvenience of the forum. |
| --- | --- |
| 7.6 | Attorney Fees**.** In<br>the event of a breach or threatened breach of this Agreement, the non-breaching party shall be entitled to recover such party’s<br>attorney fees incurred as a result of such breach or threatened breach. |
| --- | --- |
11
| 7.7 | Binding Effect; Assignment**.This Agreement shall be enforceable by the Company and its successors and assigns and shall be binding against Executive and Executive’s<br>heirs, beneficiaries and legal representatives. The Company may assign this Agreement to any parent, subsidiary or affiliated company<br>or successor in interest. Executive may not assign this Agreement. | ||
|---|---|---|---|
| 7.8 | Construction.** This<br>Agreement shall be deemed to have been drafted jointly by the parties and no ambiguity in the Agreement shall be construed against either<br>the Company or Executive. | ||
| --- | --- | ||
| 7.9 | Titles and Headings**.<br>Titles and headings in this Agreement are for purpose of reference only and shall not limit, define, or otherwise affect the provisions<br>of this Agreement. | ||
| --- | --- | ||
| 7.10 | Complete Agreement.**<br>This Agreement (along with the Confidentiality Agreement) is the entire agreement between the parties regarding the matters addressed<br>herein, and it and supersedes and replaces all prior agreements, representations, negotiations or discussions between the parties regarding<br>such matters, whether written or oral, including, without limitation, the Executive Employment Agreement, dated June 1, 2014, between<br>Terrestrial Energy (Ontario) Inc. and Executive, as amended from time to time, but excluding any existing stock option, restricted stock<br>unit, or option cancellation agreements or other agreements concerning indemnification matters with the Company. This Agreement may be<br>signed in counterparts, including fax counterparts, and all counterparts together shall constitute one fully-executed agreement. EXECUTIVE<br>ACKNOWLEDGES AND AGREES THAT EXECUTIVE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. EXECUTIVE ACKNOWLEDGES<br>AND AGREES THAT EXECUTIVE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF EXECUTIVE’S CHOICE BEFORE SIGNING<br>THIS AGREEMENT. | ||
| --- | --- |
12
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates shown below, to be effective as of the Effective Date.
| EXECUTIVE: | TERRESTRIAL ENERGY INC. | ||
|---|---|---|---|
| By: | /s/ Simon Irish | By: | /s/ Frederick Buckman |
| Simon Irish | Frederick Buckman, Board Chair | ||
| Date: | October 28, 2025 | Date: | October 28, 2025 |
[Signature Page to Executive Employment Agreement]
Addendum 1
EMPLOYEE CONFIDENTIALITYAGREEMENT
This Employee Confidentiality Agreement (this “Agreement”) is made and entered into by and between Terrestrial Energy Inc., a Delaware corporation (the “Company”), and the employee whose name and signature appear below (“Employee”) as of the date of Employee’s signature below:
WHEREAS, Employee is employed or has been offered employment with the Company to provide services to the Companies (defined below) in a position in which Employee will or may have access to the Companies’ confidential information and intellectual property; and
WHEREAS, the Companies’ intellectual property, trade secrets and other confidential information are valuable assets of the Companies.
NOW, THEREFORE, in consideration of the employment described above and other good and valuable consideration, the parties agree as follows:
1. CONFIDENTIALITY.
1.1 Definitionof “Affiliate.” As used in this Agreement, “Affiliate” means a legal entity that (a) owns or controls in whole or in part another legal entity, (b) is owned or controlled in whole or in part by one or more other legal entities or natural persons, or (c) is under common ownership or control in whole or in part with another legal entity.
1.2 Definitionof the “Companies.” As used in this Agreement, the “Companies” means the Company and all of its direct and indirect Affiliates.
1.3 Definitionof “Confidential Information.” As used in this Agreement, “Confidential Information” means all intellectual property of the Companies, all of the Companies’ “trade secrets” as defined in the Delaware Uniform Trade Secrets Act (6 Del. Code §2001 et seq.), and all other non-public information of the Companies relating to the business of the Companies, including but not limited to all non-public information regarding the Companies’: organization, operations, and management; revenues, expenses and finances; existing and prospective contracts and business arrangements; policies and procedures; employees and contractors, including payroll, medical and other personnel records; customers, including customer lists and customer needs and preferences; vendors and service providers; business and marketing plans and strategies; data and datasets; software, hardware and information systems; patents, trademarks and other intellectual property. Confidential Information does not include specific information that has become generally publicly known through no fault of Employee.
1.4 Confidentialityand Nondisclosure. Employee hereby acknowledges and agrees that all Confidential Information which Employee receives or learns while employed by the Company shall be considered the exclusive property of the Company. Without the written consent of the Company, Employee shall not, directly or indirectly, disclose or use any Confidential Information for the benefit of any person other than the Companies. The obligations set forth in this paragraph are in addition to, and not in lieu of, any obligations of Employee otherwise provided by law, such as trade secret statutes, fiduciary duties, and the like.
1.5Return of Company Property. Employee agrees that upon termination of Employee’s employment with the Company, for whatever reason and whether voluntary or involuntary, or at any time upon request, Employee will immediately surrender to the Company all property of the Companies in Employee’s possession, custody or control, including but not limited to any copies of materials that incorporate or are derived from Confidential Information, and certify in writing to the Company that Employee has done so.
1.6 Compliancewith Pre-Existing Duties. Employee represents and warrants that Employee’s employment with the Company does not and will not breach any agreement with any former employer of Employee, including any confidentiality agreement or noncompetition agreement with a former employer. Employee shall not, during his/her employment with the Company, improperly use or disclose to any of the Companies any proprietary information or trade secrets belonging to any former employer or any other third party to whom Employee owes a duty of nondisclosure.
1.7 Informationfrom Third Parties. Employee acknowledges that the Companies have received and will continue to receive confidential or proprietary information from third parties which the Companies must maintain in confidence and protect from unauthorized disclosure or use. Without the written consent of the Company, Employee shall not, directly or indirectly, disclose or use for the benefit of any person other than the Companies any such information, except where such disclosure or use is: (a) in connection with and in furtherance of Employee’s work on behalf of the Companies, (b) not otherwise contrary to applicable laws regarding trade secrets, confidential information or intellectual property; and (c) not contrary to any agreement between the third party and any of the Companies of which Employee has knowledge.
2. DEVELOPMENTS.
**2.1 Developments.**As used herein “Development” means all products of human intelligence which have been protected or could be protected by Intellectual Property Rights (as defined hereafter), all embodiments thereof (including, without limitation, all software, hardware, information, data, documentation, materials, ideas, discoveries, concepts, processes, formulae, techniques, designs, formats, methodologies, algorithms, programs, know-how, tools, and other technology), all inventions, conceptions, developments, discoveries, creations, or works of authorship or expression included therein or relating thereto, and all updates, upgrades, enhancements, modifications, derivatives, improvements and translations thereto, thereof or thereon, and all Intellectual Property Rights therein and relating thereto.
2.2 IntellectualProperty Rights. As used herein, the term “Intellectual Property Rights” means all worldwide intellectual property and proprietary rights, including, without limitation, all trade secrets, patents and patent applications, copyrights, mask works, trademarks, trade names, service marks, trade dress, moral rights, rights in datasets and databases, contractual rights, and all other intellectual property and proprietary rights recognized by the laws of any jurisdiction or country, whether registered or unregistered.
2.3 CompanyDevelopments. As used herein, the term “Company Developments” means all Developments made, conceived, reduced to practice, created, developed, authored, or learned by Employee, in whole or in part and whether alone or with others, while employed by the Company; provided, however, Company Developments shall not include (a) Prior Developments as defined in Section 2.6 of this Agreement, or (b) Developments that are (i) wholly unrelated to the business of the Companies (or any of them) or the actual or demonstrably anticipated research and development of the Companies (or any of them) and (ii) conceived, created and developed wholly on Employee’s own time and without use of personnel, Confidential Information or other resources of any of the Companies.
2.4 Assignment ofCompany Developments. Employee hereby acknowledges and agrees that the Company exclusively owns all rights, title and interest in and to all Company Developments (and all Intellectual Property Rights therein and thereto). The parties agree that each element of any Company Development that is protectable under copyright laws shall be deemed a “work made for hire” under those laws and is and shall be owned by Company. Employee agrees to and hereby does irrevocably assign, now and in the future (when any such Company Developments or any Intellectual Property Rights therein or related thereto are first made, conceived, reduced to practice, created, developed, or learned, as applicable), to the Company (or to one of the other Companies or a third party if directed by the Company) all of Employee’s right, title, and interest in and to any and all Company Developments (and all Intellectual Property Rights therein and related thereto). Employee retains no rights to use the Company Developments or any such Intellectual Property Rights and agrees not to challenge the validity of the Company’s ownership in any Company Developments or such Intellectual Property Rights. If any Company Development or Intellectual Property Rights therein, including moral rights, in any Company Development cannot (as a matter of law) be assigned by Employee to the Company, then Employee unconditionally and irrevocably waives the enforcement of such rights and all claims and causes of action of any kind against the Company, or any of its respective licensees, successors or assigns with respect to such rights.
2.5 Obligationto Keep Company Informed. During the period of Employee’s employment and for one (1) year thereafter, Employee will promptly and fully disclose to the Company in writing (a) all Company Developments and (b) all patent applications filed by Employee in which Employee is named as an inventor or co-inventor.
2.6 PriorDevelopments. Employee agrees that Employee will not incorporate, or permit to be incorporated, Prior Developments (defined below) in any Company Developments without the Company’s prior written consent. In addition, Employee agrees that Employee will not incorporate into any Company software or otherwise deliver to the Company any software code licensed under any open source software license (including the GNU GPL or LGPL or any other license that, by its terms, requires or conditions the use or distribution of such code on the disclosure, licensing, or distribution of any source code owned or licensed by the Company) other than as permitted by and consistently with the Company’s policy for uses of such software code or as otherwise expressly authorized by the Company by prior written approval. Employee has disclosed on Exhibit A a complete list of all Developments relating to the business of the Companies (or any of them) that Employee has, or has caused to be, alone or jointly with others, conceived, reduced to practice, created or developed prior to the commencement of Employee’s employment by the Company, in which Employee has an ownership interest or which Employee has a license to use, and that Employee wishes to have excluded from the scope of this Agreement (collectively referred to as “Prior Developments”). If no Prior Developments are listed on Exhibit A, Employee warrants that there are no Prior Developments. If, in the course of Employee’s employment with the Company, Employee utilizes a Prior Development or a Non-Company Development (as defined in Section 2.9 below) in Employee’s work for the Company, Employee hereby grants the Company a non-exclusive, perpetual, fully-paid and royalty-free, irrevocable and worldwide license, with rights to sublicense through multiple levels of sublicensees, to reproduce, make derivative works of, distribute, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import, offer for sale, and exercise any and all present or future rights in, such Prior Development or Non-Company Development.
2.7 Protection andEnforcement of Intellectual Property Rights and Assistance. The Company will have the right, at its own expense, and solely in its own name, to apply for, prosecute and defend its rights in the Company Developments and all such Intellectual Property Rights. During the period of Employee’s employment and thereafter, Employee will assist the Company in every proper way to protect and enforce United States and foreign Intellectual Property Rights relating to Company Developments in all countries. In the event the Company is unable to secure Employee’s signature on any document needed in connection with such purposes, Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agent and attorney in fact, which appointment is coupled with an interest, to act on Employee’s behalf to execute and file any such documents and to do all other lawfully permitted acts to further such purposes with the same legal force and effect as if executed by Employee.
**2.8 Records.**Employee agrees to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that is required by the Company) of all Developments made by Employee during the period of Employee’s employment by the Company, which records shall be available to, and remain the sole property of, the Company at all times.
2.9 Noticeof Exceptions. The Employee’s obligations to assign Developments pursuant to Section 2.4 do not apply to any invention that Employee develops entirely on Employee’s own time without using the Company’s equipment, supplies, facilities, or trade secret information, except for those inventions that either: (i) relate at the time of conception or reduction to practice of the invention to the Company’s business, or actual or demonstrably anticipated research or development of the Company; or (ii) result from any work performed by Employee for the Company (each a “Non-Company Development”).
3. ProtectedRights. Notwithstanding any other provision of this Agreement, nothing in this Agreement (or any other agreement signed by Employee) shall restrict Employee’s right to (a) report violations of law to law enforcement officials; (b) give truthful testimony under oath in a judicial, administrative, or arbitral proceeding; (c) file a charge with, make truthful statements to, cooperate with investigations by, or assist others in proceedings before governmental agencies (including the U.S Equal Employment Opportunity Commission, the National Labor Relations Board and the U.S Securities and Exchange Commission); (d) speak with an attorney representing Employee; (e) discuss the facts related to any claim of sexual assault or sexual harassment; (f) engage in whistle-blower activity protected by the Securities Exchange Act of 1934, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any rules or regulations issued thereunder (including Rule 21F-17); (g) file or disclose any facts necessary to receive unemployment insurance, Medicaid, or other public benefits to which Employee may be entitled; (h) exercise rights under Section 7 of the National Labor Relations Act, including the right to discuss terms and conditions of employment with co-workers and labor unions; or (i) otherwise disclose information that Employee is legally entitled to disclose pursuant to applicable law. For the avoidance of doubt, Employee’s past, present or future exercise of any rights described in this Section 3 shall not constitute a breach of this Agreement. In addition, 18 U.S.C. §1833(b) provides as follows, and nothing in this Agreement or any other agreement, or any Company policy, is intended to conflict with this statutory protection: “(1) Anindividual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secretthat (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to anattorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaintor other document filed in a lawsuit or other proceeding, if such filing is made under seal. (2) An individual who files a lawsuitfor retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individualand use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secretunder seal; and (B) does not disclose the trade secret, except pursuant to court order.”
4. SCOPEAND REMEDIES. As used herein, the phrase “while employed by the Company” includes any period of prior or subsequent service to the Company as a contractor or other non-employee service provider. Employee acknowledges and agrees that a breach by Employee of any provision of this Agreement will cause the Company irreparable injury and damage and that the Company shall therefore be entitled to, in addition to all other remedies available to it, injunctive and other equitable relief (without the necessity of posting a bond) to prevent or stop such breach and to secure the enforcement of this Agreement.
5. GENERAL.
5.1 Severability. If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions will be unaffected and will remain enforceable according to their terms.
5.2 Modification;Waiver. This Agreement cannot be amended or modified except by a writing signed by each of the parties. No waiver of any provision shall be deemed to have occurred unless memorialized in a writing signed by the waiving party. If either party should waive any breach of any provision of this Agreement, such party will not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.
5.3 NoEffect on At-Will Employment Status. This Agreement is not intended to, and shall not be construed to, grant any employment rights to Employee beyond that of at-will employment, which may be terminated by either party at any time, with or without cause.
5.4 Survival. The provisions of this Agreement shall survive the termination of this Agreement and the termination of Employee’s employment with the Company.
5.5 GoverningLaw and Venue. This Agreement shall be governed by the laws of the State of Delaware and applicable federal law, without regard to any state’s principles regarding conflict of laws. Any action arising out of or relating to this Agreement shall be brought only in the state or federal courts in or for Delaware, and Employee and the Company hereby irrevocably waive any right that they might have to challenge the selection of those forums, including but not limited to challenges to personal jurisdiction, venue, or the convenience of the forum.
5.6 AttorneyFees. In the event of a breach or threatened breach of this Agreement, the non-breaching party shall be entitled to recover such party’s attorney fees incurred as a result of such breach or threatened breach.
5.7 BindingEffect; Assignment. This Agreement shall be enforceable by the Company and its successors and assigns and shall be binding against Employee and Employee’s heirs, beneficiaries and legal representatives. The Company may assign this Agreement to any parent, subsidiary or affiliated company or successor in interest. Employee may not assign this Agreement.
5.8 Titleand Headings. Titles and headings in this Agreement are for purpose of reference only and shall not limit, define or otherwise affect the provisions of this Agreement.
5.9 CompleteAgreement. This Agreement is the entire agreement between the parties regarding the matters addressed herein, and it and supersedes and replaces all prior agreements, representations, negotiations or discussions between the parties regarding such matters, whether written or oral. This Agreement may be signed in counterparts, including fax counterparts, and all counterparts together shall constitute one fully-executed agreement.
| EMPLOYEE: | TERRESTRIAL ENERGY INC. | |
|---|---|---|
| By: | ||
| Simon Irish | Signature | |
| Date | Frederick Buckman, Board Chair | |
| Date |
EXHIBIT A
| TO: | TERRESTRIAL ENERGY INC. |
|---|
| FROM: | Simon Irish |
|---|---|
| DATE: | _____________________________ |
| --- | --- |
| SUBJECT: | Prior Developments |
| --- | --- |
1. Except as listed in Section 2 below, the following is a complete list of all inventions or improvements that related in any way to the business of the Company and that were made, conceived or first reduced to practice by me (alone or jointly with others) prior to my employment by the Company:
| ☐ | No Developments or improvements. |
|---|---|
| ☐ | The following Developments: |
| --- | --- |
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
| ☐ | Additional sheets attached. |
|---|
2. Due to a prior confidentiality agreement, I cannot complete the disclosure under Section 1 above with respect to the Developments generally listed below for the following party(ies):
| Invention or Improvement | Party(ies) | Relationship |
|---|---|---|
| a) | ||
| b) | ||
| c) | ||
| ☐ | Additional sheets attached. | |
| --- | --- |
Exhibit 10.11
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”), dated as of October 28, 2025, is by and between Terrestrial Energy Inc., a Delaware corporation formerly known as “HCM II Acquisition Corp.” (the “Company”) and [NAME OF DIRECTOR/OFFICER] (“Indemnitee”).
WHEREAS, the Company expects Indemnitee to join the Company as a member of the board of directors of the Company (the “Board”) or an officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers of public companies;
WHEREAS, the Board has determined that enhancing the ability of the Company to retain and attract the most capable persons as directors and officers is in the best interests of the Company and that the Company therefore should seek to assure such persons that indemnification and insurance coverage is available; and
WHEREAS, in recognition of the need to provide Indemnitee with substantial protection against personal liability, in order to procure Indemnitee’s service as a director or officer of the Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to the Company’s certificate of incorporation or bylaws (collectively, the “Constituent Documents”), any change in the composition of the Board or any change in control or business combination transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of, and the advancement of Expenses (as defined in Section 1(j) below) to, Indemnitee as set forth in this Agreement and for the coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.
NOW, THEREFORE, in consideration of the foregoing and the Indemnitee’s agreement to provide services to the Company, the parties agree as follows:
- Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
(a) “Beneficial Owner” has the meaning given to the term “beneficial owner” in Rule 13d-3 under the Exchange Act.
(b) “Change in Control” means the occurrence after the date of this Agreement of any of the following events:
(i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 25% or more of the Company’s then outstanding Voting Securities unless the change in relative ownership of the Company’s securities by any Beneficial Owner results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;
(ii) the consummation of a reorganization, merger or consolidation, unless immediately following such reorganization, merger or consolidation, all of the Beneficial Owners of the Voting Securities of the Company immediately prior to such transaction beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding Voting Securities of the entity resulting from such transaction;
(iii) during any period of two (2) consecutive years, not including any period prior to the execution of this Agreement, individuals who at the beginning of such period constituted the Board (including for this purpose any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of the Board; or
(iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.
(c) “Claim” means any threatened, asserted, pending or completed:
(i) action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, arbitrative, investigative or other, and whether made pursuant to federal, state or other law; or
(ii) inquiry, hearing or investigation that the Indemnitee determines might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism.
(d) “Delaware Court” shall have the meaning ascribed to it in Section 9(e) below.
(e) “Disinterested Director” means a director of the Company who is not and was not a party to the Claim in respect of which indemnification is sought by Indemnitee.
(f) “Enterprise” shall have the meaning ascribed to it in Section 1(k) below.
(g) “ERISA Losses” means any taxes, penalties or other liabilities under the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended.
(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(i) “Expense Advance” means any payment of Expenses advanced to Indemnitee by the Company pursuant to Section 4 or Section 5 hereof.
(j) “Expenses” means any and all expenses, including attorneys’ and experts’ fees, court costs, transcript costs, travel expenses, duplicating, printing and binding costs, telephone charges, and all other costs and expenses incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim. “Expenses” also shall include (i) Expenses incurred in connection with any appeal resulting from any Claim, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 5 only (and subject to the limitations thereof), Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. “Expenses”, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(k) “Indemnifiable Event” means any event or occurrence, whether occurring before, on or after the date of this Agreement, related to the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any subsidiary or predecessor of the Company, including for the avoidance of doubt Terrestrial Energy Development Inc., a Delaware corporation formerly known as “Terrestrial Energy Inc.”, or is or was serving at the request of the Company as a director, officer, employee, member, manager, trustee or agent of any other corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise (collectively with the Company, “Enterprise”) or by reason of an action or inaction by Indemnitee in any such capacity (whether or not serving in such capacity at the time any Loss is incurred for which indemnification can be provided under this Agreement).
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(l) “Independent Counsel” means a law firm that is experienced in matters of corporation law and neither presently performs, nor in the past three (3) years has performed, services for either: (i) the Company or Indemnitee or (ii) any other party to the Claim giving rise to a claim for indemnification hereunder. “Independent Counsel”, however, shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
(m) “Losses” means any and all direct or indirect Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), third party attorneys’ fees, ERISA Losses, amounts paid or payable in settlement, arbitration or mediation of any Claim, including any interest, assessments and all other charges paid or payable in connection with or in respect of any of the foregoing.
(n) “Notification Date” shall have the meaning ascribed to it in Section 9(c) below.
(o) “Other Indemnity Provisions” shall have the meaning ascribed to it in Section 13 below.
(p) “Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity and includes the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act.
(q) “Standard of Conduct Determination” shall have the meaning ascribed to it in Section 9(b) below.
(r) “Voting Securities” means any securities of the Company that vote generally in the election of directors.
Services to the Company. Indemnitee agrees to serve as a director or officer, as applicable, of the Company for so long as Indemnitee is duly elected or appointed or until Indemnitee resigns or is no longer serving in such capacity. This Agreement shall not be deemed an employment agreement between the Company (or any of its subsidiaries or Enterprise) and Indemnitee. Indemnitee specifically acknowledges that their service to the Company or any of its subsidiaries or Enterprise as a director is for the duration and subject to the terms set forth in the Company’s Constituent Documents or Delaware law. To the extent Indemnitee is serving as an officer, Indemnitee specifically acknowledges that their employment with or service to the Company or any of its subsidiaries or Enterprise is at will and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment agreement between Indemnitee and the Company (or any of its subsidiaries or Enterprise), other applicable formal severance policies duly adopted by the Board or, with respect to service as an officer of the Company, by the Company’s Constituent Documents or Delaware law.
Indemnification.
(a) Proceedings Other Than Proceedings by or in the Right of the Company. Subject to Section 9 and Section 10 of this Agreement, the Company shall indemnify Indemnitee, to the fullest extent permitted by Delaware law in effect on the date hereof, or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all Losses if Indemnitee was or is or becomes a party to or participant in, or is threatened to be made a party to or participant in, any Claim by reason of or arising in part out of an Indemnifiable Event (other than a Claim brought by or in the right of the Company), including, without limitation, Claims brought by third parties, and Claims in which the Indemnitee is solely a witness. In the event the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever (other than a determination pursuant to this Agreement that Indemnitee is not entitled to indemnification by the Company with respect to such Claim or Loss), the Company, in lieu of indemnifying Indemnitee, will contribute to the payment of any and all Losses, in such proportion as is fair and reasonable in light of all of the circumstances in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Claim or Loss or (ii) the relative fault of the Company (and its other directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
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(b) Proceedings by or in the Right of the Company. Subject to Section 9 and Section 10 of this Agreement, the Company shall indemnify Indemnitee, to the fullest extent permitted by Delaware law in effect on the date hereof, or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all Expenses if Indemnitee was or is or becomes a party to or participant in, or is threatened to be made a party to or participant in, any Claim brought by or in the right of the Company by reason of or arising in part out of an Indemnifiable Event, including, without limitation, Claims in which the Indemnitee is solely a witness. In the event the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever (other than a determination pursuant to this Agreement that Indemnitee is not entitled to indemnification by the Company with respect to such Claim or Expenses), the Company, in lieu of indemnifying Indemnitee, will contribute to the payment of any and all Losses, in such proportion as is fair and reasonable in light of all of the circumstances in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Claim or Expenses or (ii) the relative fault of the Company (and its other directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Advancement of Expenses. Subject to the condition and limitations of this Agreement, the Company shall advance to or on behalf of Indemnitee, prior to the final disposition of any Claim by final adjudication to which there are no further rights of appeal, any and all Expenses actually and reasonably paid or incurred by Indemnitee in connection with any Claim arising out of an Indemnifiable Event. Indemnitee’s right to such advancement is not subject to the satisfaction of any standard of conduct. Without limiting the generality or effect of the foregoing, within five (5) business days after any request by Indemnitee, the Company shall, in accordance with such request, (a) pay such Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses. In connection with any request for Expense Advances, Indemnitee shall not be required to provide any documentation or information to the extent that the provision thereof would undermine or otherwise jeopardize attorney-client privilege. In connection with any request for Expense Advances, Indemnitee shall execute and deliver to the Company an undertaking (which shall be accepted without reference to Indemnitee’s ability to repay the Expense Advances) substantially in the form attached hereto as Exhibit A, to repay any amounts paid, advanced, or reimbursed by the Company for such Expenses to the extent that it is ultimately determined, following the final disposition of such Claim, that Indemnitee is not entitled to indemnification hereunder. Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon.
Indemnification for Expenses in Enforcing Rights. To the fullest extent allowable under Delaware law, the Company shall also indemnify against, and, if requested by Indemnitee, shall advance to Indemnitee subject to and in accordance with Section 4, any Expenses actually and reasonably paid or incurred by Indemnitee in connection with any action or proceeding by Indemnitee for indemnification or reimbursement or advance payment of Expenses by the Company under any provision of this Agreement, or under any other agreement or provision of the Constituent Documents now or hereafter in effect relating to Claims relating to Indemnifiable Events. However, in the event that Indemnitee is ultimately determined not to be entitled to such indemnification in whole or in part, as the case may be, then all amounts advanced under this Section 5 shall be repaid in the same proportion as the those amounts to which the Indemnitee is determined not to be entitled relative to the total amounts claimed by Indemnitee in such action or proceeding. Indemnitee shall also be required to reimburse the Company in the event that a final judicial determination is made that such action brought by Indemnitee was frivolous or not made in good faith.
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Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of any Losses in respect of a Claim related to an Indemnifiable Event but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled and to all Expenses incurred in connection with defending such Claim.
Notification and Defense of Claims.
(a) Notification of Claims. Indemnitee shall notify the Company in writing as soon as practicable of any Claim which relates to an Indemnifiable Event and for which Indemnitee is seeking indemnification or for which Indemnitee is seeking Expense Advances, including a brief description (based upon information then available to Indemnitee) of the nature of, and the facts underlying, such Claim. The failure by Indemnitee to timely notify the Company hereunder shall not relieve the Company from any liability hereunder except that the Company shall not be liable to indemnify Indemnitee under this Agreement with respect to any judicial award in a Claim related to an Indemnifiable Event if the Company was not given a reasonable and timely opportunity to participate at its expense in the defense of such Claim. If at the time of the receipt of such notice, the Company has directors’ and officers’ liability insurance in effect under which coverage for Claims related to Indemnifiable Events is potentially available, the Company shall give prompt written notice to the applicable insurers in accordance with the procedures set forth in the applicable policies and shall take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable in connection with such Claim in accordance with the terms of such policy. The Company shall provide to Indemnitee a copy of such notice delivered to the applicable insurers, and copies of all subsequent correspondence between the Company and such insurers regarding the Claim, in each case substantially concurrently with the delivery or receipt thereof by the Company. The Company will cooperate with Indemnitee in making any supplemental claims against any directors’ and officers’ or other management liability insurance policy maintained by the Company and potentially providing coverage to Indemnitee. The failure or refusal of any insurer or insurance policy described in this Section 7(a) to pay shall not affect or impair the obligations of the Company under this Agreement.
(b) Defense of Claims. The Company shall be entitled to participate in the defense of any Claim relating to an Indemnifiable Event at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such Claim, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently directly incurred by Indemnitee in connection with Indemnitee’s defense of such Claim other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own legal counsel in such Claim, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s own expense; provided, however, that if (i) Indemnitee’s employment of its own legal counsel has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such Claim, (iii) after a Change in Control, Indemnitee’s employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such Claim, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one (1) law firm plus, if applicable, local counsel in respect of any such Claim, to the extent necessary and then only one (1) such local counsel per jurisdiction) and all Expenses related to such separate counsel shall be borne by the Company pursuant to the terms of this Agreement; provided further, that in all such events, Indemnitee and its counsel will not unreasonably interfere with the conduct of the defense by the Company or any Claim for which the Company has assumed the defense pursuant to this Section 7(b).
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Procedure upon Application for Indemnification. In order to obtain indemnification pursuant to this Agreement, Indemnitee shall submit to the Company a written request therefor, including in such request such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of the Claim; provided, that documentation and information need not be so provided to the extent that the provision thereof would undermine or otherwise jeopardize attorney-client privilege or work product protection. Indemnification shall be made insofar as the Company determines Indemnitee is entitled to indemnification in accordance with Section 9 below.
Determination of Right to Indemnification.
(a) Mandatory Indemnification; Indemnification as a Witness.
(i) To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Claim relating to an Indemnifiable Event or any portion thereof or in defense of any issue or matter therein, including without limitation dismissal without prejudice, Indemnitee shall be indemnified against all Losses relating to such Claim in accordance with Section 3 to the fullest extent allowable by Delaware law and no Standard of Conduct Determination will be required.
(ii) To the extent that Indemnitee’s involvement in a Claim relating to an Indemnifiable Event is limited to Indemnitee’s preparation and service as a witness, and not as a party, the Indemnitee shall be indemnified against all Losses incurred in connection therewith to the fullest extent allowable by Delaware law and no Standard of Conduct Determination will be required.
(b) Standard of Conduct. To the extent that the provisions of Section 9(a) are inapplicable to a Claim related to an Indemnifiable Event that shall have been finally disposed of, any determination of whether Indemnitee has satisfied any applicable standard of conduct under Delaware law that is a legally required condition to indemnification of Indemnitee hereunder against Losses relating to such Claim and any determination that Expense Advances must be repaid to the Company (a “Standard of Conduct Determination”) shall be made as follows:
(i) if no Change in Control has occurred, (A) by a majority vote of the Disinterested Directors, even if less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum or (C) if there are no such Disinterested Directors or if Indemnitee so requests, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee; and
(ii) if a Change in Control shall have occurred, (A) if the Indemnitee so requests in writing, by a majority vote of the Disinterested Directors, even if less than a quorum of the Board or (B) otherwise, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee.
The Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five (5) business days of such request, any and all Expenses incurred by Indemnitee in cooperating with the person or persons making such Standard of Conduct Determination.
(c) Making the Standard of Conduct Determination. The Company shall use its reasonable best efforts to cause any Standard of Conduct Determination required under Section 9(b) to be made as promptly as practicable. If the person or persons designated to make the Standard of Conduct Determination under Section 9(b) has not made a determination within 30 days after the later of (A) receipt by the Company of a written request from Indemnitee for indemnification pursuant to Section 8 (the date of such receipt being the “Notification Date”) and (B) the selection of an Independent Counsel, if such determination is to be made by Independent Counsel, then Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such 30 days may be extended for a reasonable time, not to exceed an additional 30 days, if the person or persons making such determination in good faith requires such additional time to obtain or evaluate information relating thereto. Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of any Claim.
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(d) Payment of Indemnification. If, in regard to any Losses:
(i) Indemnitee shall be entitled to indemnification pursuant to Section 9(a);
(ii) no Standard of Conduct Determination is legally required as a condition to indemnification of Indemnitee hereunder; or
(iii) Indemnitee has been determined or deemed pursuant to Section 9(b) or Section 9(c) to have satisfied the Standard of Conduct Determination,
then the Company shall pay to Indemnitee, within five (5) business days after the later of (A) the Notification Date or (B) the earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) is satisfied, an amount equal to such Losses.
(e) Selection of Independent Counsel for Standard of Conduct Determination. If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to Section 9(b)(i) or Section 9(b)(ii), the Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. The Company may, within 30 days after receiving written notice of selection from the Indemnitee, deliver to the Indemnitee a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not satisfy the criteria set forth in the definition of “Independent Counsel” in Section 1(l), and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person or firm so selected shall act as Independent Counsel. If such written objection is properly and timely made and substantiated, (i) the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit; and (ii) Indemnitee may, at its option, select an alternative Independent Counsel and give written notice to the Company advising the Company of the identity of the alternative Independent Counsel so selected, in which case the provisions of the two (2) immediately preceding sentences, the introductory clause of this sentence and numbered clause (i) of this sentence shall apply to such subsequent selection and notice. If applicable, the provisions of clause (ii) of the immediately preceding sentence shall apply to successive alternative selections. If no Independent Counsel that is permitted under the foregoing provisions of this Section 9(e) to make the Standard of Conduct Determination shall have been selected within 30 days Indemnitee gives its initial notice pursuant to this Section 9(e), Indemnitee may petition the Court of Chancery of the State of Delaware (“Delaware Court”) to resolve any objection which shall have been made by the Company to Indemnitee’s selection of Independent Counsel and/or to appoint as Independent Counsel a person to be selected by the Court or such other person as the Court shall designate, and the person or firm with respect to whom all objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees, costs and expenses of the Independent Counsel incurred in connection with the Independent Counsel’s determination pursuant to Section 9(b).
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(f) Presumptions and Defenses.
(i) Indemnitee’s Entitlement to Indemnification. In making any Standard of Conduct Determination, the person or persons making such determination shall presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification, and the Company shall have the burden of proof to overcome that presumption and establish that Indemnitee is not so entitled. Any Standard of Conduct Determination that is adverse to Indemnitee may be challenged by the Indemnitee in the Delaware Court. No determination by the Company (including by its directors or any Independent Counsel) that Indemnitee has not satisfied any applicable standard of conduct may be used as a defense to any legal proceedings brought by Indemnitee to secure indemnification or reimbursement or advance payment of Expenses by the Company hereunder or create a presumption that Indemnitee has not met any applicable standard of conduct.
(ii) Reliance as a Safe Harbor. For purposes of this Agreement, and without creating any presumption as to a lack of good faith if the following circumstances do not exist, Indemnitee shall be deemed to have acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company if Indemnitee’s actions or omissions to act are taken in good faith reliance upon the records of the Company, including its financial statements, or upon information, opinions, reports or statements furnished to Indemnitee by the officers or employees of the Company or any of its subsidiaries in the course of their duties, or by committees of the Board or by any other Person (including legal counsel, accountants and financial advisors) as to matters Indemnitee reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company. In addition, the knowledge and/or actions, or failures to act, of any director, officer, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnity hereunder.
(iii) No Other Presumptions. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, will not create a presumption that Indemnitee did not meet any applicable standard of conduct or have any particular belief, or that indemnification hereunder is otherwise not permitted.
(iv) Defense to Indemnification and Burden of Proof. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Losses incurred in defending against a Claim related to an Indemnifiable Event in advance of its final disposition) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In connection with any such action or any related Standard of Conduct Determination, the burden of proving such a defense or that the Indemnitee did not satisfy the applicable standard of conduct shall be on the Company; provided, however, that the foregoing shall not limit any obligations of the Company to contribute to the payment of Losses pursuant to Section 3 of this Agreement.
- Exclusions from Indemnification. Notwithstanding anything in this Agreement to the contrary, the Company shall not be obligated to:
(a) indemnify or advance funds to Indemnitee for Expenses or Losses with respect to proceedings initiated by Indemnitee, including any proceedings against the Company or its directors, officers, employees or other indemnitees and not by way of defense, except:
(i) proceedings referenced in Section 5 above, subject to the conditions and limitations of Section 5; or
(ii) where the Board has consented to the initiation of such proceedings;
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(b) indemnify Indemnitee if a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law;
(c) indemnify Indemnitee for the disgorgement of profits arising from the purchase or sale by Indemnitee of securities of the Company in violation of Section 16(b) of the Exchange Act, or any similar successor statute; or
(d) indemnify or advance funds to Indemnitee for Indemnitee’s reimbursement to the Company of any bonus or other incentive-based or equity-based compensation previously received by Indemnitee or payment of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements under Section 304 of the Sarbanes-Oxley Act of 2002 in connection with an accounting restatement of the Company or the payment to the Company of profits arising from the purchase or sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act).
Settlement of Claims. The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Claim related to an Indemnifiable Event effected without the Company’s prior written consent, which shall not be unreasonably withheld. The Company shall not settle any Claim related to an Indemnifiable Event in any manner (a) that would impose any Losses on the Indemnitee without the Indemnitee’s prior written consent, unless such Losses are fully indemnified by the Company; or (b) that includes equitable remedies or does not include a complete and unconditional release of Indemnitee for all liability related to the relevant Claims.
Duration. All agreements and obligations of the Company contained herein shall continue during the period that Indemnitee is a director or officer of the Company (or is serving at the request of the Company as a director, officer, employee, member, trustee or agent of another Enterprise) and shall continue thereafter (a) so long as Indemnitee may be subject to any possible Claim relating to an Indemnifiable Event (including any rights of appeal thereto) and (b) throughout the pendency of any proceeding (including any rights of appeal thereto) commenced by Indemnitee to enforce or interpret his or her rights under this Agreement (to the extent such amounts are indemnifiable pursuant to this Agreement), even if, in either case, he or she may have ceased to serve in such capacity at the time of any such Claim or proceeding.
Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under the Constituent Documents, the General Corporation Law of the State of Delaware, any other contract or otherwise (collectively, “Other Indemnity Provisions”); provided, however, that (a) to the extent that Indemnitee otherwise would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will be deemed to have such greater right hereunder and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder.
Liability Insurance. For the duration of Indemnitee’s service as a director or officer of the Company, and thereafter for so long as Indemnitee shall be subject to any pending Claim relating to an Indemnifiable Event, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to maintain or continue to maintain in effect policies of directors’ and officers’ liability insurance providing coverage that is at least substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance. In all policies of directors’ and officers’ liability insurance maintained by the Company, Indemnitee shall be named or otherwise treated as an insured in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of persons in comparable roles relative to the Company. Upon request, the Company will provide to Indemnitee copies of all directors’ and officers’ liability insurance applications, binders, policies, declarations, endorsements and other related materials.
9
No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment to Indemnitee in respect of any Losses to the extent Indemnitee has otherwise received payment under any insurance policy, the Constituent Documents, Other Indemnity Provisions or otherwise (including any other indemnification agreement or commitment with any other Person) of the amounts otherwise indemnifiable by the Company hereunder.
Subrogation. In the event of payment to Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee. Indemnitee shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights. The Company shall pay or reimburse all Expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.
Amendments. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.
Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part of the business and/or assets of the Company, by written agreement in form and substances satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any portion thereof) are held by a court of competent jurisdiction to be invalid, illegal, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, by postage prepaid, certified or registered mail or email:
(a) if to Indemnitee, to the address set forth on the signature page hereto.
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(b) if to the Company, to:
Terrestrial Energy Inc.
2730 W. Tyvola Road, Suite 100
Charlotte, NC 28217
Attention: Steve Millsap
Email: smillsap@terrestrialenergy.com
Notice of change of address shall be effective only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of hand delivery or on the third (3^rd^) business day after mailing.
Governing Law and Forum. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such state without giving effect to its principles of conflicts of laws. The Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court and not in any other state or federal court in the United States, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement and (c) waive, and agree not to plead or make, any claim that the Delaware Court lacks venue or that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Headings. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof.
Counterparts. This Agreement may be executed in counterparts, each of which shall for all purposes be deemed to be an original, but all of which together shall constitute one and the same Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| TERRESTRIAL ENERGY INC. | |
|---|---|
| By: | |
| Name: | Simon Irish |
| Title: | Chief Executive Officer |
| INDEMNITEE | |
| Name: | [NAME OF DIRECTOR/OFFICER] |
| Address: | [ADDRESS] |
| Email: | [EMAIL] |
{SignaturePage to Indemnification Agreement}
EXHIBIT A FORM OF UNDERTAKING TO REPAY ADVANCEMENT OF EXPENSES
[DATE] Terrestrial Energy Inc.
2730 W. Tyvola Road, Suite 100,
Charlotte, NC 28217
ATTN: [·]
Re: Undertaking to Repay Advancement of Expenses.
Dear [NAME]:
This undertaking is being provided pursuant to that certain Indemnification Agreement, dated October 28, 2025 (the “Indemnification Agreement”), by and between Terrestrial Energy Inc., a Delaware corporation formerly known as “HCM II Acquisition Corp.” (the “Company”), and the undersigned as Indemnitee. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Indemnification Agreement. Pursuant to the Indemnification Agreement, among other things, I am entitled to the advancement of Expenses paid or incurred in connection with Claims relating to Indemnifiable Events.
I have become subject to [DESCRIPTION OF PROCEEDING] (the “Proceeding”) based on [my status as [[TITLE OF OFFICER]/a director] of the Company/alleged actions or failures to act in my capacity as [[TITLE OF OFFICER]/a director] of the Company]. This undertaking also constitutes notice to the Company of the Proceeding pursuant to Section 7 of the Indemnification Agreement. The following is a brief description of the [current status of the] Proceeding:
[DESCRIPTION OF PROCEEDING]
[Pursuant to Section 4 of the Indemnification Agreement, the Company can (a) pay such Expenses on my behalf, (b) advance funds in an amount sufficient to pay such Expenses, or (c) reimburse me for such Expenses. Pursuant to Section 4 of the Indemnification Agreement, I hereby request an Expense Advance in connection with the Proceeding. The Expenses for which advances are requested are as follows:]
[DESCRIPTION OF EXPENSES]
[In connection with the request for Expense Advances [set out above/delivered to the Company separately on [DATE]],] I hereby undertake to repay any amounts paid, advanced or reimbursed by the Company for such Expense Advances to the extent that it is ultimately determined that I am not entitled to indemnification under the Indemnification Agreement.
This undertaking shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of laws thereof.
Very truly yours,
| Name:[●] |
|---|
| Title:[●] |
Exhibit10.12
THESECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S.SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFITOF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITEDSTATES IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (C) WITHIN THE UNITED STATES IN ACCORDANCE WITH(1) RULE 144A UNDER THE U.S. SECURITIES ACT OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, AND, IN EACH CASE, IN COMPLIANCEWITH APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES, OR (D) WITHIN THE UNITED STATES IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATIONUNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT IN THE CASE OF TRANSFERS PURSUANT TO CLAUSE (C)(2)OR (D) ABOVE, A LEGAL OPINION SATISFACTORY TO THE COMPANY MUST FIRST BE PROVIDED.
THESALE, PLEDGE, HYPOTHECATION, OR TRANSFER OF THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAINSUBSCRIPTION AGREEMENT BY AND BETWEEN THE HOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TOTHE CHIEF FINANCIAL OFFICER OF THE COMPANY.
FORCANADIAN HOLDERS: UNLESS PERMITTED UNDER SECURITIES LEGISLATION,THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (I) [ORIGINALISSUE DATE]; AND (II) THE DATE THE ISSUER BECOMES A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.
THEHOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES THAT ALL OF THE SHARES INTO WHICH THIS SECURITY MAY BE EXERCISED OR CONVERTED, ASAPPLICABLE, SHALL OTHERWISE BE SUBJECT TO THE TERMS AND CONDITIONS OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANYAND THE AMENDED AND RESTATED BYLAWS OF THE COMPANY, IN EACH CASE AS MAY BE AMENDED, RESTATED OR REPLACED FROM TIME TO TIME.
| Warrants exercisable for | Warrant Certificate # [●] |
|---|---|
| Up to [●] Shares of Common Stock | Issue Date: [●] (the “Issue Date”). |
| Expiry Date: July 31, 2028 (the “Expiry Date”). |
SECURITIESPURCHASE WARRANTS
(the “Warrants”)
TERRESTRIALENERGY INC**.,**
aDelaware corporation
(the “Company”)
This is to certify that, for value received, [●] (the “Holder”) has the right to purchase from the Company, at the Exercise Price (as defined below) and upon and subject to the terms and conditions referred to herein, up to [●] shares of common stock of the Company (the “Common Stock”) on the basis of one (1) share of Common Stock for one (1) Warrant, subject to adjustment in connection with certain events, at any time during the Exercise Period.
Capitalized terms used in this Warrant Certificate that are not defined herein shall bear the meanings attributed to them in the subscription agreement between the Holder and the Company dated [Original Issue Date] (the “Subscription Agreement”), entered into in connection with the Unit Offering.
Section1 Definitions
As used in this Warrant Certificate, the following terms have the following meanings:
“ApplicableMarket Price” means, as applicable, (i) in the event that (A) a SPAC Transaction occurs prior to a Qualifying Financing and (B) Warrants are exercised following the SPAC Closing Date, the price per share of the Resulting Issuer Stock upon the listing of such stock, provided appropriate adjustments are made to the number of shares of Common Stock issuable in connection with such exercise and to the Exercise Price, in each case pursuant to Section 3, as applicable, (ii) in the event that (A) a Qualifying Financing occurs prior to a SPAC Transaction, and (B) the Warrants are exercised following the completion of such Qualifying Financing, the price per share of the issue price of the Common Stock or preferred stock of the Company issued in connection with such Qualifying Financing, and (iii) with respect to any Warrants exercised at any time during the Exercise Period prior to a SPAC Transaction or a Qualifying Financing, the Fair Market Price.
“BusinessDay” means any day on which commercial banks in New York, New York are required by applicable law to be open for business.
“CashlessExercise” has the meaning specified in Section 5.
“CashlessExercise Option” has the meaning specified in Section 5.
“CashPayment Subscription Form” has the meaning specified in Section 2(1)(a).
“CashlessSubscription Form” has the meaning specified in Section 2(1)(b)(i).
“CommonStock” has the meaning specified in the preamble to this Warrant Certificate.
“CorporateEvent” means the earlier of (i) the closing of a SPAC Transaction, (ii) the completion of a Qualifying Financing or (iii) the closing of an IPO.
“Directors’Market Price” means the fair market value of the Common Stock on the Business Day prior to the applicable exercise date of the Warrant(s) as determined in good faith by the Company’s board of directors.
“ExercisePeriod” means the period commencing on the Issue Date and ending at 4:30 p.m. (Eastern Time) on the Expiry Date.
“ExercisePrice” means US$100 per share, subject to adjustment as provided herein.
“ExerciseSubscription Forms” has the meaning specified in Section 2(1)(b)(i).
“ExpiryDate” has the meaning specified in the preamble to this Warrant Certificate.
“FairMarket Price” means (i) if the Company’s stock is listed on a Recognized Exchange, the per share price equal to the average closing price of the Company’s stock for the five (5) trading days prior to the applicable exercise date of the Warrant(s); (ii) if the Company’s stock is not listed on a Recognized Exchange, but is traded in any over-the-counter market, the average closing price of the Company’s stock for the five (5) trading days prior to the applicable exercise date of the Warrant(s); (iii) with respect to the exercise of any Warrant(s) exercised in connection with an IPO, the issue price per share of the Company’s stock as specified in the final prospectus filed in connection with such IPO; and (iv) if the Company’s securities are not publicly traded, the Directors’ Market Price, as applicable.
- 2 -
“IPO” means an initial public offering that closes prior to the Expiry Date, whether on a treasury or secondary basis, resulting in the holding of equity of the Company, directly or indirectly, by the public, or a transaction giving rise to a stock market listing or over-the-counter quotation of equity of the Company, directly or indirectly, and includes an amalgamation, securities exchange take-over bid or other transaction having a similar result, and an offering of units of an income trust or similar offering where the trust, directly or indirectly, owns equity of the Company, and which, for greater clarity, shall in no event include a SPAC Transaction or any offering of securities following the completion of a SPAC Transaction.
“IPOSecurities” means the securities listed on a Recognized Exchange upon the closing of an IPO.
“IssueDate” has the meaning specified in the preamble to this Warrant Certificate.
“Lock-UpAgreement” means the lock-up agreement to be entered into by the Holder and the Resulting Issuer or, in the case of an IPO, the Company, in connection with a SPAC Transaction or IPO, as applicable, restricting the Holder from selling, assigning, transferring, disposing of, alienating, granting a security interest in, encumbering in any way or otherwise conveying the Warrants, and the securities issuable upon the exercise of such Warrants, as applicable, or from entering into any agreement to do any of the foregoing from the (i) SPAC Closing Date or (ii) closing date of the IPO, as applicable, until the Lock-Up Expiry Date, which shall provide for terms substantially similar to the lock-up agreement, including with respect to the Lock-Up Expiry Date provided thereunder, to be entered into by the directors and officers of the Company in connection with such SPAC Transaction or IPO, as the case may be.
“Lock-UpExpiry Date” means the earliest expiry date of the “black-out” periods under which locked-up shareholders of the Company, including the directors and officers of the Company, required to enter into customary lock-up agreements pursuant to a SPAC Transaction or an IPO are restricted from trading Resulting Issuer Stock or IPO Securities, as the case may be.
“QualifyingFinancing” means the completion of an offering (whether in one or more closings) of the Common Stock or preferred stock of the Company following the date hereof, but prior to the Expiry Date, which raises, in the aggregate, a minimum of US$50 million of cash proceeds, excluding (i) the amount raised in connection with the Unit Offering and (ii) any amounts raised by the Company in connection with a proposed SPAC Transaction, including from any sponsor of the SPAC or its affiliates (or pursuant to their proprietary third-party relationships) in connection with such proposed SPAC Transaction.
“RecognizedExchange” means the Nasdaq, the New York Stock Exchange, the Toronto Stock Exchange, the London Stock Exchange, the Hong Kong Stock Exchange, the Paris Stock Exchange, the Frankfurt Stock Exchange or the Oslo Stock Exchange, as applicable.
“ResultingIssuer” has the meaning specified in the definition of “SPAC Transaction” in this Section 1.
“ResultingIssuer Stock” means the common stock of the Resulting Issuer listed on a Recognized Exchange on a SPAC Closing Date.
“SPAC” means a publicly held special purpose acquisition company, formed for the purpose of effecting a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
“SPACClosing Date” means the date of the closing of a SPAC Transaction.
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“SPACConsideration” has the meaning specified in Section 3(1).
“SPACTransaction” means a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination involving, directly or indirectly, the Company and the SPAC, in each case that is consummated prior to the Expiry Date and pursuant to which (i) the equity securities of the Company are converted, exchanged for or otherwise disposed for capital stock of such special purpose acquisition company (including the parent of or the resulting entity whose equity securities are publicly held following the closing of such transaction, a “Resulting Issuer”) and/or cash, (ii) such Resulting Issuer is obligated to cause the securities issued to the shareholders in such business combination to be registered pursuant to an effective registration statement or qualified by a prospectus for which a receipt or similar document is issued by a securities commission or similar applicable regulatory body to enable the sale of such securities to members of the public, and (iii) the stock of such Resulting Issuer that is issued in such transaction are listed on a Recognized Exchange.
“SPACWarrant Certificate” has the meaning specified in Section 3(1).
“UnitOffering” means the private placement of units of the Company, with each such unit comprised of 8% secured convertible notes due 2026 and a warrant certificate in the form of this Warrant Certificate.
Section2 Exercise Of Warrants.
| (1) | Subject<br> to the terms and conditions of this<br> Warrant Certificate, each Warrant may be exercised at the Exercise Price during the Exercise<br> Period subject to the accuracy of the investment representations as of the date of such exercise.<br> The right to purchase the Common Stock may be exercised in whole or in part at the Exercise<br> Price within the times set forth as follows: |
|---|---|
| (a) | if<br> the Holder is paying the Exercise Price in cash, by: |
| --- | --- |
| (i) | completing<br> and executing the subscription form attached as Schedule “A” (the “Cash Payment Subscription Form”) for the number of shares of Common Stock which the<br> Holder wishes to purchase, in the manner therein indicated; |
| --- | --- |
| (ii) | surrendering<br> this Warrant Certificate, together with the completed Cash Payment Subscription Form, to<br> the Company at 9319 Robert D. Snyder Rd., Portal 316, Charlotte, North Carolina 28223 or<br> such other address as the Company may direct by written notice; and |
| --- | --- |
| (iii) | paying<br> the appropriate Exercise Price, denominated in U.S. dollars (US$), for the number of shares<br> of Common Stock subscribed for, either by certified check or bank draft or money order payable<br> to the Company. |
| --- | --- |
| (b) | if<br> the Holder is paying for the Exercise Price in Warrants by way of the Cashless Exercise Option<br> specified under Section 5,<br> by: |
| --- | --- |
| (i) | completing<br> and executing the subscription form attached as Schedule “B” (the “Cashless Subscription Form”, and together with the Cash Payment Subscription Form, the “Exercise Subscription Forms”) attached hereto for the number of shares of Common Stock which<br> the Holder wishes to purchase, in the manner therein indicated; and |
| --- | --- |
| (ii) | surrendering<br> this Warrant Certificate, together with the completed Cashless Subscription Form, to the<br> Company at 9319 Robert D. Snyder Rd., Portal 316, Charlotte, North Carolina 28223 or such<br> other address as the Company may direct by written notice. |
| --- | --- |
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| (2) | Upon<br> surrender and payment, the Company shall issue to the Holder the number of shares of Common<br> Stock subscribed for and will deliver to the Holder, at the address set forth on the applicable<br> Exercise Subscription Form, a certificate or certificates evidencing the number of shares<br> of Common Stock subscribed for, as applicable, within five (5) Business Days of the date<br> of actual surrender and payment. If, and only if, the Directors’ Market Price is the<br> applicable Fair Market Price used to determine the number of shares of Common Stock issued<br> pursuant to the exercise of the Warrants by way of the Cashless Exercise Option, the Company<br> shall provide the Holder with a notice specifying the Directors’ Market Price within<br> five (5) Business Days of the date of actual surrender of the Warrant Certificate. |
|---|---|
| (3) | If<br> the Holder subscribes for a number of shares of Common Stock which is less than the number<br> of shares of Common Stock permitted by this Warrant Certificate, the Company shall forthwith<br> cause to be delivered to the Holder a further Warrant Certificate in respect of the balance<br> of the Common Stock referred to in this Warrant Certificate not then being subscribed for.<br> The Company shall not be required to issue an aggregate number of shares of Common Stock<br> that results in any fractional shares of Common Stock being issued and the Holder shall not<br> be entitled to any cash payment or compensation in lieu of a fractional share of Common Stock. |
| --- | --- |
| (4) | In<br> the event that upon receiving a Cash Payment Subscription Form, the Company or Resulting<br> Issuer determine in good faith that (i) the proposed exercise of this Warrant would require<br> registration under applicable securities laws, (ii) such registration is not then in effect,<br> and (iii) exercise of this Warrant on a cashless basis would not require such registration,<br> then the Company shall notify the Holder of such determination and shall effect the exercise<br> of this Warrant on a cashless basis pursuant to Section<br> 5 unless the Holder elects to rescind such exercise. |
| --- | --- |
Section3 Exchange for SPAC Warrants in connection with a SPAC Transaction
| (1) | From<br> and after the SPAC Closing Date pursuant to a SPAC Transaction, upon<br> any subsequent exercise of the Warrants, the Holder shall have the right to receive, for<br> each share of the Common Stock that otherwise would have been issuable upon such exercise<br> immediately prior to the occurrence of the SPAC Transaction, such number of shares of Resulting<br> Issuer Stock and any additional consideration (collectively, the “SPAC<br> Consideration”) receivable as a result of such SPAC<br> Transaction by a holder of one (1) share of Common Stock prior to such SPAC Transaction.<br> For purposes of any such exercise, the determination of the Exercise Price following the<br> SPAC Closing Date shall be appropriately adjusted to apply to such SPAC Consideration based<br> on the amount of SPAC Consideration issuable in respect of one (1) share of Common Stock<br> in such SPAC Transaction, and the Company shall apportion the Exercise Price among the SPAC<br> Consideration in a reasonable manner reflecting the relative value of any different components<br> of the SPAC Consideration. The Company shall cause the Resulting Issuer in a SPAC Transaction<br> in which the Company is not the surviving entity to assume in writing the obligations of<br> the Company to issue Resulting Issuer Stock upon exercise of this Warrant and may, at the<br> option of the Resulting Issuer, elect to deliver to the Holder in exchange for this Warrant<br> Certificate a security of the Resulting Issuer evidenced by a written instrument (the<br> “SPAC Warrant Certificate”)<br> substantially similar in economic<br> substance to this Warrant Certificate that is exercisable for a corresponding number of shares<br> of capital stock of such Resulting Issuer equivalent to the number of shares of Common Stock<br> issuable upon exercise of the unexercised Warrants under this Warrant Certificate exercisable<br> prior to such SPAC Transaction, and with an exercise price which applies the Exercise Price<br> hereunder to such shares of capital stock (but taking into account the relative value of<br> the Common Stock pursuant to such SPAC Transaction and the value of such shares of capital<br> stock, such number of shares of capital stock and such exercise price being for the purpose<br> of protecting the economic value of the unexercised Warrants outstanding immediately prior<br> to the consummation of such SPAC Transaction). Upon the Resulting Issuer’s delivery<br> of a SPAC Warrant Certificate exercisable for the number of shares of the Resulting Issuer<br> Stock and an adjusted Exercise Price as set forth above, this Warrant Certificate shall automatically<br> be cancelled and the Holder shall have no further rights hereunder. In the event that the<br> Resulting Issuer is not organized under the law of a jurisdiction in the United States or<br> the primary trading market of the Resulting Issuer is outside the United States, the SPAC<br> Warrant Certificate may provide for governing law, jurisdiction, venue, and ministerial and<br> administrative provisions that the Resulting Issuer determines appropriate. Upon the occurrence<br> of any such SPAC Transaction, the Resulting Issuer shall succeed to, and be substituted for<br> (so that from and after the date of such SPAC Transaction, the provisions of this Warrant<br> Certificate referring to the “Company” shall refer instead to the Resulting Issuer),<br> and may exercise every right and power of the Company as if such Resulting Issuer had been<br> named as the Company herein. Following the SPAC Closing Date, the terms “Company”<br> and “Common Stock” as used herein shall refer to the Resulting Issuer and the<br> Resulting Issuer Stock, respectively, unless the context otherwise requires. |
|---|
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| (2) | If<br> necessary, as a result of any SPAC Transaction, appropriate adjustments will be made in the<br> application of the provisions of this Warrant Certificate with respect to the rights and<br> interest thereafter of the Holder to the end that the provisions of this Warrant Certificate<br> will thereafter correspondingly be made applicable as nearly as may reasonably be possible<br> in relation to any SPAC Warrant Certificate or other securities thereafter deliverable pursuant<br> to Section<br> 3(1). Pursuant to Section 3(1), the Company will seek, acting in good faith, to make adjustments<br> with respect to the issuance of a SPAC Warrant Certificate in connection with a SPAC Transaction<br> as it considers necessary and equitable. If at any time a dispute arises with respect to<br> adjustments provided for in connection with the issuance of a SPAC Warrant Certificate, such<br> dispute will be conclusively determined by the auditors of the Company or, if they are unable<br> or unwilling to act, by such other firm of independent chartered accountants as may be selected<br> by the directors of the Company and any such determination, absent manifest error, will be<br> binding upon the Company, the Holder and shareholders of the Company. The Company will provide<br> such auditors or accountants with access to all necessary records of the Company and fees<br> payable to such accountants or auditors will be paid by the Company. |
|---|---|
| (3) | Notwithstanding<br> any other provision hereof, the Company shall not be required to issue the Common Stock or,<br> using commercially reasonable efforts, cause the Resulting Issuer Stock to be issued, as<br> the case may be, if the Holder has not executed and delivered a Lock-Up Agreement prior to<br> the closing of the IPO or SPAC Closing Date, as the case may be, or has violated the terms<br> of the Lock-Up Agreement in any material respect. |
| --- | --- |
Section4 Capital Reorganization
| (1) | If<br> there shall be, prior to the exercise of the Warrants, any (a)<br> reorganization of the authorized capital of the Company by way of consolidation, merger,<br> sub-division, amalgamation, arrangement, reclassification or otherwise, including in connection<br> with a SPAC Transaction; (b) the payment of any stock dividends (other than in the ordinary<br> course of business); (c) a special distribution or rights offering; (d) the change or exchange<br> of the Common Stock or preferred stock of the Company into or with another security (other<br> than the conversion of the Common Stock or preferred stock of the Company), including in<br> connection with a SPAC Transaction; or (e) any similar event or transaction not specifically<br> contemplated by the foregoing subsections (a), (b), (c), and (d), as determined by the Company<br> in its sole discretion (in each case, a “Capital Reorganization”), then there shall automatically<br> be an adjustment, as applicable, in (i) the number and, if applicable, type of securities<br> which may be issued pursuant to this Warrant Certificate, and (ii) the Exercise Price for<br> such securities, such that the rights under this Warrant Certificate following such adjustment<br> shall thereafter be as reasonably as possible equivalent to the rights originally granted<br> hereby and such that the Holder, upon exercise of this Warrant Certificate following the<br> effective date of the Capital Reorganization, shall receive the number and type of securities<br> the Holder would have been entitled to receive if, on the effective date thereof, the Holder<br> had been the registered holder of the number of shares of Common Stock which the Holder was<br> theretofore entitled to purchase or receive upon the exercise of the Warrants. |
|---|---|
| (2) | Pursuant<br> to the foregoing, the Company will make adjustments in connection with a Capital Reorganization<br> as it considers necessary and equitable, acting in good faith. If at any time a dispute arises<br> with respect to adjustments provided for in connection with a Capital Reorganization, such<br> dispute will be conclusively determined by the auditors of the Company or if they are unable<br> or unwilling to act, by such other firm of independent chartered accountants as may be selected<br> by the directors of the Company and any such determination, absent manifest error, will be<br> binding upon the Company, the Holder and shareholders of the Company. The Company will provide<br> such auditors or accountants with access to all necessary records of the Company and fees<br> payable to such accountants or auditors will be paid by the Company. |
| --- | --- |
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Section5 Cashless Exercise of Warrants
| (1) | Notwithstanding<br> anything to the contrary contained herein, and provided that the Warrants could otherwise<br> be exercised in accordance with the terms hereof, the Holder may elect to exercise the Warrants,<br> in whole or in part, without payment of the aggregate Exercise Price due on such exercise<br> (a “Cashless Exercise<br> Option”) in the manner set out in this Section 5,<br> as applicable. If the Holder elects the Cashless Exercise Option, the Holder shall provide<br> written notice of the election to the Company in the form of the Cashless Subscription Form.<br> Upon actual receipt by the Company of a Cashless Subscription Form, a certificate or confirmation<br> of book entry registration (as directed by the Holder) for the appropriate number of shares<br> of Common Stock will be delivered to the person(s) in whose name(s) the Common Stock subscribed<br> for is to be issued within five (5) Business Days of receipt of the Cashless Subscription<br> Form, such person(s) shall become a holder in respect of such shares of Common Stock with<br> effect from the date of such exercise, and, unless this Warrant Certificate has expired,<br> a new Warrant Certificate representing the unexercised balance of the Warrants, if any, or<br> all of the Warrants evidenced by this Warrant Certificate having been exercised will also<br> be issued to the Holder within such time. |
|---|---|
| (2) | The<br> number of shares of Common Stock to be issued to the Holder pursuant to a Cashless Exercise<br> Option shall be determined as follows (provided, for the avoidance of doubt, that if the<br> following calculation results in a negative number, then no Common Stock shall be issuable<br> via the Cashless Exercise Option): |
| --- | --- |
| X<br> = | Y<br> x (A-B) |
| --- | --- |
| A | |
| Where: | X<br> = the number of shares of Common Stock to be issued to the Holder upon exercising the Warrants; |
| --- | --- |
Y = the number of Warrants being exercised;
A = the Applicable Market Price per share of the Common Stock; and
B = the Exercise Price of the Warrants.
| (3) | To<br> the extent that this Warrant Certificate is not previously exercised in full by the Holder<br> on or prior to the Expiry Date, and if the Applicable Market Price per share of Common Stock<br> is greater than the Exercise Price with respect to the Common Stock, any such portion of<br> this Warrant Certificate that remains unexercised shall be exercised automatically in whole<br> (and not in part) at the Expiry Date (with the Exercise Price satisfied pursuant to a Cashless<br> Exercise Option in accordance with this Section<br> 5), unless the Holder provides a written instruction to the Company to allow the Warrants<br> to lapse without exercise at least three (3) days prior to the Expiry Date, and such instruction<br> will result in the termination of this Warrant Certificate. To the extent this Warrant Certificate<br> or any portion thereof is deemed automatically exercised pursuant to this Section 5(3), the<br> Company agrees to promptly notify the Holder of the number of shares of Common Stock that<br> the Holder is to receive by reason of such automatic exercise. |
|---|---|
| (4) | If<br> the number of shares of Common Stock to be issued to the Holder exercising its Warrants on<br> a cashless basis in accordance with Section<br> 5(2) above results in a fractional number, the number of shares of Common Stock to be issued<br> to the Holder shall be rounded down to the nearest whole number with compensation to the<br> Holder therefor for the fractional share of Common Stock to be paid in accordance with Section<br> 2. |
| --- | --- |
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Section6 Notice
| (1) | Upon<br> completion of the applicable Corporate Event, the Company will promptly provide notice to<br> the Holder within ten (10) Business Days of the completion of such Corporate Event. |
|---|---|
| (2) | Any<br> notice given under this Certificate shall be given in writing and either delivered or mailed<br> by prepaid post to the party to receive such notice at the address indicated below, or at<br> such other address as any party may hereafter designate by notice in writing to each of the<br> others: |
| --- | --- |
| (a) | to<br> the Company at: |
| --- | --- |
Terrestrial Energy Inc.
2730 W. Tyvola Road, Suite 100
Charlotte, North Carolina 28217
Attention: [●]
Email: [●]
Copied (which shall not constitute notice) to:
Terrestrial Energy (Ontario) Inc.
2275 Upper Middle Rd. East
Suite 201
Oakville, ON L6H 0C3
Attention: [●]
Email: [●]
Stikeman Elliott LLP
5300 Commerce Court West
199 Bay Street
Toronto, Ontario M5L 1B9
Attention: Kevin Smyth / Spencer Burger
Email: ksmyth@stikeman.com / sburger@stikeman.com
Bryan Cave Leighton Paisner LLP
One Atlantic Center
1201 W. Peachtree St., N.W.
14^th^ Floor
Atlanta, Georgia 30309-3471
Attention: Amy Wilson / Jonathan Nesher
Email: amy.wilson@bclplaw.com / jonathan.nesher@bclplaw.com
| (b) | to<br> the Holder at the Holder’s address or e-mail address, in each case as specified under<br> Section 19 (Notices) of the Subscription Agreement. |
|---|
Any such communication shall be deemed to have been validly and effectively given if (i) personally delivered, on the date of such delivery if such date is a Business Day and such delivery was made prior to 4:00 p.m. (Eastern Time), otherwise on the next Business Day, (ii) transmitted by e-mail or similar means of electronic communication, on the Business Day following the date of transmission. Any party may change its address for service from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to the party at its changed address.
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| (3) | The<br> Company shall give to the Holder at least ten (10) Business Days prior written notice (the<br> “Notice”)<br> of the date on which the books of the Company are to close or a record is to be taken in<br> connection with any event which requires or might require an adjustment pursuant to (i) an<br> IPO, (ii) a SPAC Transaction or (iii) a Capital Reorganization. The Notice shall specify<br> the particulars of such Capital Reorganization, and, if determinable, the required adjustment<br> to the Exercise Price and, if applicable, the type of security issuable upon the exercise<br> of the Warrants, and the calculation of the adjustment to the Exercise Price. The Company<br> hereby covenants and agrees that the register of transfers and share transfer books for the<br> securities of the Company will be open, and that the Company will not take any action which<br> might deprive the Holder of the opportunity of exercising the rights of subscription contained<br> in this Warrant Certificate during such ten (10) Business Day period, if applicable. |
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Section7 Miscellaneous
| (1) | If<br> Warrants are exercised before the Expiry Date, the certificate representing the Common Stock<br> issued in connection with the exercise of any such Warrants will contain the following legend: |
|---|
“FORCANADIAN HOLDERS: UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATETHAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (I) [ORIGINAL ISSUE DATE]; AND (II) THE DATE THE ISSUER BECOMES A REPORTING ISSUER INANY PROVINCE OR TERRITORY OF CANADA.
THESECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S.SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OFTHE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THEUNITED STATES IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLECANADIAN AND PROVINCIAL LAWS AND REGULATIONS, (C) WITHIN THE UNITED STATES IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S.SECURITIES ACT OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE STATESECURITIES LAWS OF THE UNITED STATES, OR (D) WITHIN THE UNITED STATES IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THEU.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT IN THE CASE OF TRANSFERS PURSUANT TO CLAUSE (C)(2) OR (D)ABOVE, A LEGAL OPINION SATISFACTORY TO THE COMPANY MUST FIRST BE PROVIDED.
THESALE, PLEDGE, HYPOTHECATION, OR TRANSFER OF THE SECURITY REPRESENTED HEREBY IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN SUBSCRIPTIONAGREEMENT BY AND BETWEEN THE HOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE CHIEF FINANCIALOFFICER OF THE COMPANY.
THESECURITIES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATIONOF THE COMPANY AND THE AMENDED AND RESTATED BYLAWS OF THE COMPANY, IN EACH CASE AS MAY BE AMENDED, RESTATED OR REPLACED FROM TIME TOTIME.”
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| (2) | This<br> Warrant Certificate may not be sold, assigned or transferred without the prior written approval<br> of the Company. For the avoidance of doubt, this Warrant Certificate may be assigned to a<br> Resulting Issuer in connection with a SPAC Transaction or the surviving corporation in connection<br> with a Capital Reorganization, as applicable, without the consent of the Holder. |
|---|---|
| (3) | The<br> holding of this Warrant Certificate does<br> not constitute the Holder as a shareholder of the Company. In the absence of the exercise<br> of this Warrant Certificate, no provisions of, and no enumeration of the rights or privileges<br> of the Holder in this Warrant Certificate will cause the Holder to be a shareholder of the<br> Company for any purpose. The Holder acknowledges that upon conversion of this Note for shares<br> of the Company, such shares shall be subject to the Certificate of Incorporation and Bylaws<br> of the Company, including the restrictions on transfer set forth therein to the extent applicable. |
| --- | --- |
| (4) | Nothing<br> contained herein confers any right upon the Holder or any other person to subscribe for or<br> purchase any Common Stock at any time subsequent to 4:30 p.m. (Eastern Time) on the Expiry<br> Date, and from and after such time, this Warrant Certificate and all rights hereunder will<br> be void. |
| --- | --- |
| (5) | This<br> Warrant Certificate will be governed by, interpreted and enforced in accordance with the<br> laws of the State of Delaware and the federal laws of the United States applicable therein.<br> The Holder attorns and submits to the non-exclusive jurisdiction of the courts of the State<br> of Delaware with respect to any matters arising out of this Warrant Certificate and waives<br> objection to the venue of any proceeding in such court or that such court provides an inconvenient<br> forum. |
| --- | --- |
| (6) | Time<br> will be of the essence hereof. If any provision of this Warrant Certificate is deemed by<br> any court of competent jurisdiction to be invalid or void, the remaining provisions shall<br> remain in full force and effect. |
| --- | --- |
| (7) | This<br> Warrant Certificate is not valid for any purpose until it has been signed by the Company. |
| --- | --- |
[Remainderof page intentionally left blank. Signature page follows.]
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be executed by an authorized signatory of the Company as of the ___ day of _______________, 2024.
| TERRESTRIAL ENERGY INC. | ||
|---|---|---|
| By: | ||
| Name: | Simon<br> Irish | |
| Title: | Chief Executive Officer |
Schedule“A”
CASHPAYMENT SUBSCRIPTION FORM
To: Terrestrial Energy Inc., a Delaware corporation (the “Company”)
Andto: The directors of the Company
Pursuant to the warrant certificate of the Company dated [●] (the “Warrant Certificate”), the undersigned (the “Subscriber”) hereby subscribes for and agrees to take up _____shares of common stock in the capital of the Company (the “Common Stock”), at a price of $_____ per share of Common Stock, for the aggregate sum of $_____ (the “Subscription Funds”), and encloses herewith a certified check, bank draft or money order payable to the Company in full payment of the Common Stock.
In connection with this exercise of warrants pursuant to the Warrant Certificate, the Subscriber represents that the representations set forth in Sections 6 and Section 7 of Subscription Agreement (as defined in the Warrant Certificate), as applicable, are true and correct as of the date set forth below.
Unless the Company consents in its sole discretion, the Common Stock will be allotted to, issued to, and registered in the name of the Holder of the Warrant Certificate. The Company may require additional documentation and representations to issue the Common Stock to any other person.
The Subscriber hereby requests that upon receipt of the Subscription Funds by the Company:
| (a) | the<br> Common Stock be allotted<br> to the person set out under the registration directions shown below; |
|---|---|
| (b) | the<br> name and address of the person set out under the registration directions shown below be entered<br> in the registers of securityholders of the Company; |
| --- | --- |
| (c) | the<br> Common Stock be issued to the person<br> set out under the registration directions shown as fully paid and validly issued; and |
| --- | --- |
| (d) | a<br> certificate representing the Common Stock be registered in accordance with the registration<br> directions shown below, as applicable. |
| --- | --- |
Dated this _______ day of ______________, __________.
DIRECTIONAS TO REGISTRATION:
(Nameand address exactly as you wish them to appear on the stock certificate representing the Common Stock and in the register of securityholders.)
Full Address:
Full Name (subject to Company consent if different from Subscriber):
Signature of Subscriber:
NOTE: The signature to this Subscription Form must correspond with the name as recorded on the Warrant Certificate accompanying this Subscription Form in every particular without alteration or enlargement or any change whatever.
Schedule“B”
CASHLESSSUBSCRIPTION FORM
To: Terrestrial Energy Inc., a Delaware corporation (the “Company”)
Andto: The directors of the Company
Pursuant to the warrant certificate of the Company dated [●] (the “Warrant Certificate”), the undersigned (the “Subscriber”) hereby exercises the right to purchase and hereby subscribes for and agrees to take up _______________ shares of common stock in the capital of the Company (the “Common Stock”) on a cashless basis pursuant to Section 5 of the Warrant Certificate, as calculated in accordance with the formula set out in Section 5(2) of the Warrant Certificate.
In connection with this exercise of warrants pursuant to the Warrant Certificate, the Subscriber represents that the representations set forth in Sections 6 and Section 7 of the Subscription Agreement (as defined in the Warrant Certificate), as applicable, are true and correct as of the date set forth below.
Unless the Company consents in its sole discretion, the Common Stock will be allotted to, issued to, and registered in the name of the Holder of the Warrant Certificate. The Company may require additional documentation and representations to issue the Common Stock to any other person.
The Subscriber hereby requests that upon receipt of the Subscription Funds by the Company:
| (a) | the<br> Common Stock be allotted<br> to the person set out under the registration directions shown below; |
|---|---|
| (b) | the<br> name and address of the person set out under the registration directions shown below be entered<br> in the registers of securityholders of the Company; |
| --- | --- |
| (c) | the<br> Common Stock be issued to the person<br> set out under the registration directions shown as fully paid and validly issued; and |
| --- | --- |
| (d) | a<br> certificate representing the Common Stock be registered in accordance with the registration<br> directions shown below, as applicable. |
| --- | --- |
Dated this _______ day of ______________, __________.
DIRECTIONAS TO REGISTRATION:
(Nameand address exactly as you wish them to appear on the stock certificate representing the Common Stock and in the register of securityholders.)
Full Address:
Full Name (subject to Company consent if different from Subscriber):
Signature of Subscriber:
NOTE: The signature to this Subscription Form must correspond with the name as recorded on the Warrant Certificate accompanying this Subscription Form in every particular without alteration or enlargement or any change whatever.
Exhibit 21.1
| Subsidiary | Jurisdiction of formation |
|---|---|
| Terrestrial Energy Development Inc. | Delaware |
| Terrestrial Energy USA, Inc. | Delaware |
| Terrestrial Energy Canada (Call) Inc. | Ontario, Canada |
| Terrestrial Energy Canada (Exchange) Inc. | Ontario, Canada |
| Terrestrial Energy (Ontario) Inc. | Ontario, Canada |
| Terrestrial Energy Limited | England and Wales |
| Terrestrial Energy Canada Inc. | Alberta, Canada |