8-K
Infleqtion, Inc. (INFQ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 13, 2026
INFLEQTION, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-42646 | 86-1946291 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>Identification No.) |
1315 West Century Drive, Suite 150
Louisville, CO 80027
(Address of principal executive offices, including zip code)
(303) 440-1284
(Registrant’s telephone number, including area code)
Churchill Capital Corp X
640 Fifth Avenue, 14th Floor
New York, NY 10019
(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 (see General Instruction A.2. below):
| ☐ | 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) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br>Symbol | Name of each exchange<br><br>on which registered |
|---|---|---|
| Common Stock, par value $0.0001 per share | INFQ | The New York Stock Exchange |
| Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | INFQ WS | The New York Stock Exchange |
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
The Domestication and the Mergers
As previously disclosed, on September 8, 2025, Churchill Capital Corp X, a Cayman Islands exempted company limited by shares (“Churchill”), entered into an Agreement and Plan of Merger and Reorganization (as amended, modified, supplemented or waived from time to time, the “Merger Agreement”), by and among Churchill, AH Merger Sub I, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Churchill (“Merger Sub I”), AH Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Churchill (“Merger Sub II,” to be renamed “Infleqtion Quantum, LLC” effective at Closing), and ColdQuanta, Inc. (d/b/a Infleqtion), a Delaware corporation (“Legacy Infleqtion”).
On February 12, 2026, Churchill held an extraordinary general meeting of shareholders of Churchill (the “Special Meeting”) where the shareholders of Churchill considered and approved each proposal described in the Proxy Statement/Prospectus starting on page 146, including approval of the Business Combination (as defined below).
On that same day, as contemplated by the Merger Agreement and described in the section titled “Proposal No. 2—The Domestication Proposal” beginning on page 216 of the definitive proxy statement/final prospectus, dated January 23, 2026 (the “Proxy Statement/Prospectus”) and filed with the Securities and Exchange Commission (the “SEC”), Churchill filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which Churchill was domesticated and continues as a Delaware corporation, changing its name to “Infleqtion, Inc.” (the “Domestication”). Immediately prior to the Domestication, each then-issued and outstanding Class B ordinary share, par value $0.0001 per share, of Churchill (“Churchill Class B Ordinary Share”) was converted, on a one-for-one basis, into a Class A ordinary share, par value $0.0001 per share, of Churchill (“Churchill Class A Ordinary Share”). Further, in connection with the Domestication: (a) each then-issued and outstanding Churchill Class A Ordinary Share converted automatically, on a one-for-one basis, into a share of common stock of Infleqtion, Inc., par value $0.0001 per share (“Common Stock”); (b) each then-issued and outstanding warrant to acquire Churchill Class A Ordinary Shares converted automatically into a warrant to acquire a corresponding number of shares of the Common Stock, on a one-for-one basis (“Warrant”), and (c) each then-issued and outstanding unit of Churchill was cancelled, thereafter entitling the holder of such unit to one share of Common Stock and one-quarter of one Warrant.
On February 13, 2026, as contemplated by the Merger Agreement and described in the section titled “Proposal No. 1—The Business Combination Proposal” beginning on page 146 of the Proxy Statement/Prospectus, Legacy Infleqtion consummated the transactions contemplated by the Merger Agreement, whereby Merger Sub I merged with and into Legacy Infleqtion, with Legacy Infleqtion continuing as the surviving corporation (the date and time of such merger, the “Effective Time”) and, immediately thereafter, the surviving corporation merged with and into Merger Sub II, with Merger Sub II (renamed as “Infleqtion Quantum, LLC”) continuing as the surviving entity and as a wholly-owned subsidiary of Infleqtion, Inc. (“Infleqtion” or the “Company” and such transactions collectively, the “Mergers,” and, together with the Domestication and other transactions contemplated by the Merger Agreement and the related agreements, the “ Transactions” or the “ Business Combination”).
As a result of the Mergers, among other things, all shares of common stock of Legacy Infleqtion (“Legacy Infleqtion Common Stock”) (including shares of Legacy Infleqtion Common Stock issued upon the conversion of Legacy Infleqtion’s preferred stock and Legacy Infleqtion restricted stock awards in respect of Legacy Infleqtion preferred stock) issued and outstanding at the Effective Time (other than Excluded Shares and Dissenting Shares (each as defined in the Merger Agreement)) were automatically cancelled and converted into the right to receive an aggregate of 151,804,988 shares of Common Stock (at a deemed value of $10.00 per share).
At the Effective Time, each (i) outstanding and unexercised Legacy Infleqtion option (whether or not vested) was assumed by the Company and converted into an option to purchase shares of Common Stock, on the same terms and conditions (including applicable vesting, exercise and expiration provisions) as applied to each such Legacy Infleqtion option immediately prior to the Effective Time and (ii) outstanding Legacy Infleqtion restricted stock award that was outstanding as of immediately prior to the Effective Time was converted into a Company restricted stock award subject to substantially the same terms and conditions as were applicable to such Legacy Infleqtion restricted stock award immediately prior to the Effective Time (including with respect to vesting and termination-related provisions).
1
A description of the Business Combination and the terms of the Merger Agreement are included in the Proxy Statement/Prospectus in the section titled “Proposal No. 1—The Business Combination Proposal” beginning on page 146 of the Proxy Statement/Prospectus.
The foregoing description of the Merger Agreement is a summary only and is qualified in its entirety by the full text of the Merger Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein by reference.
PIPE Investment
Pursuant to the subscription agreements (the “Subscription Agreements”) entered into on September 8, 2025, by and among Churchill and certain investors (collectively, the “PIPE Investors”), (i) Churchill issued and sold to the PIPE Investors (substantially concurrently with the consummation of the Business Combination) an aggregate of 12,654,760 shares (the “PIPE Shares”) of Common Stock for an aggregate purchase price of $126.5 million (the “PIPE Investment”). The terms of the Subscription Agreements are described in the Proxy Statement/Prospectus in the section titled “Proposal No. 1—The Business Combination Proposal—Certain Agreements Related to the Business Combination—Subscription Agreements” beginning on page 165 of the Proxy Statement/Prospectus.
The foregoing description of the Subscription Agreements is a summary only and is qualified in its entirety by the full text of the form of Subscription Agreement, a copy of the form of which is filed as Exhibit 10.6 hereto and incorporated herein by reference.
2
Item 1.01 Entry into a Material Definitive Agreement.
A&R Registration Rights Agreement
Effective upon the consummation of the Business Combination (the “Closing”), that certain Registration Rights Agreement of Churchill, dated May 13, 2025 (the “Existing Registration Rights Agreement”), was amended and restated, and the Company, the Sponsor and certain persons and entities receiving shares of Common Stock in connection with the Business Combination (the “New Holders” and, together with the Sponsor, the “Reg Rights Holders”) entered into the Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”), pursuant to which the Company has agreed to use its commercially reasonable efforts to (1) file with the SEC (at the Company’s sole cost and expense) a registration statement registering the resale of certain securities held by or issuable to the Reg Rights Holders within 30 business days after the Closing (the “Resale Registration Statement”) and (2) cause the Resale Registration Statement to become effective as soon as reasonably practicable after the filing thereof, but in no event later than the 105th calendar day (or 165th calendar day if the SEC notifies the Company that it will “review” the Resale Registration Statement) after the date of the Closing (the “Closing Date”). In certain circumstances, the Reg Rights Holders may demand in the aggregate up to three underwritten offerings and will be entitled to customary piggyback registration rights. Pursuant to the A&R Registration Rights Agreement, the Reg Rights Holders have agreed not to transfer their respective shares for a period of 180 days following the Closing Date; however, such transfer restrictions terminate as of the date on which the dollar volume-weighted average price (“VWAP”) of the Common Stock on The New York Stock Exchange, or such other securities exchange where the Common Stock is primarily listed or quoted, equals or exceeds $12.00 for any 15 trading days within any 180-day consecutive trading day period. The terms of the A&R Registration Rights Agreement are described in the Proxy Statement/Prospectus in the section titled “
Proposal No. 1—The Business Combination Proposal—Certain Agreements Related to the Business Combination—Subscription Agreements
” beginning on page 163 of the Proxy Statement/Prospectus. Similar transfer restrictions also apply to the shares of Common Stock issued to former stockholders of Legacy Infleqtion in connection with the Mergers pursuant to the Amended and Restated Bylaws of the Company in effect following the Domestication and the Closing.
The foregoing description of the A&R Registration Rights Agreement is qualified in its entirety by the full text of the A&R Registration Rights Agreement, a copy of which is filed as Exhibit 10.8 hereto and incorporated herein by reference.
Indemnification Agreements
In connection with the Business Combination, on the Closing Date, the Company entered into indemnification agreements with each of its directors and executive officers. These agreements, among other things, require the Company to indemnify its directors and officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of the Company’s directors or officers or any other company or enterprise to which the person provides services at the Company’s request.
The foregoing description of the indemnification agreements is qualified in its entirety by the full text of the form of indemnification agreement, which is filed as Exhibit 10.14 hereto and incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure set forth in the “Introductory Note” above is incorporated by reference into this Item 2.01.
FORM 10 INFORMATION
Item 2.01(f) of Form 8-K states that if the predecessor registrant was a shell company, as Churchill was immediately before the Mergers, 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, the Company is providing below the information 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 the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.
3
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K and in documents incorporated herein by reference may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act. The Company’s forward-looking statements include, but are not limited to, statements regarding the Company’s or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Current Report on Form 8-K and in documents incorporated herein are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on us taking into account information currently available to us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (many of which are difficult to predict and beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
As a result of a number of known and unknown risks and uncertainties, the Company’s 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:
| • | the Company’s ability to recognize anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably following the Closing; |
|---|---|
| • | costs related to the Business Combination; |
| --- | --- |
| • | the Company’s financial and business performance; |
| --- | --- |
| • | changes in the Company’s strategy, future operations, financial position, prospects and plans; |
| --- | --- |
| • | the implementation, market acceptance and success of the Company’s business model, growth strategy and opportunities, and its ability to commercialize its quantum computing technology; |
| --- | --- |
| • | the Company’s expectations with respect to market opportunity and market growth; |
| --- | --- |
| • | the expected benefits of and ability to maintain and enter into new contracts, awards and other relationships, partnerships or collaborations with governments and government entities; |
| --- | --- |
| • | the potential for the Company’s quantum computing technology to achieve quantum advantage; |
| --- | --- |
| • | the ability of the Company’s products to meet government counterparties’ and customers’ technical requirements and compliance and regulatory needs; |
| --- | --- |
| • | the Company’s ability to achieve timing and product development milestones on its product roadmap; |
| --- | --- |
| • | the Company’s ability to attract and retain qualified employees and management; |
| --- | --- |
| • | the Company’s expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others; |
| --- | --- |
| • | expectations regarding the time during which the Company will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended; |
| --- | --- |
4
| • | the Company’s future capital requirements and sources and uses of cash; |
|---|---|
| • | the Company’s ability to obtain funding for its operations and future growth; |
| --- | --- |
| • | the outcome of any known and unknown litigation and regulatory proceedings; and |
| --- | --- |
| • | other risks and uncertainties set forth in the Proxy Statement/Prospectus in the section titled “Risk Factors” beginning on page 62 of the Proxy Statement/Prospectus, which is incorporated herein by reference. |
| --- | --- |
These forward-looking statements are based on information available as of the date of this Current Report on Form 8-K, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements in this Current Report on Form 8-K and in any document incorporated herein by reference should not be relied upon as representing the Company’s views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Business and Properties
The business and properties of Churchill and Legacy Infleqtion prior to the Business Combination are described in the Proxy Statement/Prospectus in the sections titled “
Other Information Related to CCX
” beginning on page 250 and “
Information About Infleqtion
” beginning on page 274 of the Proxy Statement/Prospectus, which are incorporated herein by reference. Risk Factors
The risks associated with the Company’s business are described in the Proxy Statement/Prospectus in the section titled “
Risk Factors
” beginning on page 62 of the Proxy Statement/Prospectus, which is incorporated herein by reference. Financial Information
Unaudited Condensed Consolidated Financial Statements
The unaudited condensed consolidated financial statements of Legacy Infleqtion as of September 30, 2025 and for the nine months ended September 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-86
of the Proxy Statement/Prospectus, which are incorporated herein by reference. These unaudited condensed consolidated financial statements should be read in conjunction with the historical audited financial statements of Legacy Infleqtion as of and for the years ended December 31, 2024 and 2023 and the related notes included in the Proxy Statement/Prospectus beginning on page
F-46
of the Proxy Statement/Prospectus, which are incorporated herein by reference.
Unaudited Pro Forma Condensed Combined Financial Information
The unaudited pro forma condensed combined financial information of the Company as of and for the nine months ended September 30, 2025 and for the year ended December 31, 2024 is set forth in Exhibit 99.1 hereto and is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s discussion and analysis of financial condition and results of operations of Legacy Infleqtion prior to the consummation of the Business Combination, for the years ended December 31, 2024 and 2023 and for the nine months ended September 30, 2025 and 2024, are described in the Proxy Statement/Prospectus in the section titled “
Infleqtion’s Management’s Discussion and Analysis of Financial Condition and Results of Operations
” beginning on page 290 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
5
Quantitative and Qualitative Disclosures About Market Risk
Quantitative and qualitative disclosures about market risk applicable to Legacy Infleqtion prior to the Business Combination, as of September 30, 2025 are included in the Proxy Statement/Prospectus in the section titled “
Infleqtion’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk
” beginning on page 307 of the Proxy Statement/Prospectus, which is incorporated herein by reference. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information known to the Company regarding the beneficial ownership of Common Stock as of the Closing Date, after giving effect to the Closing, by:
| • | each person who is known to be the beneficial owner of more than five percent of the outstanding shares of Common Stock; |
|---|---|
| • | each current named executive officer and director of the Company; and |
| --- | --- |
| • | all current executive officers and directors of the Company, as a group. |
| --- | --- |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if they possess sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Unless otherwise indicated, the Company believes that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them.
The beneficial ownership percentages set forth in the table below are based on 216,471,927 shares of Common Stock issued and outstanding as of the Closing Date and do not take into account the issuance of any shares of Common Stock upon the exercise of Warrants to purchase 10,425,000 shares of Common Stock, or the exercise of options to purchase 30,179,087 shares of Common Stock, in each case subject to any applicable vesting conditions.
| Name and Address of Beneficial Owner^(1)^ | Number of Shares of <br>Common Stock <br>Beneficially Owned | Percentage of <br>Outstanding<br>Common Stock | |||
|---|---|---|---|---|---|
| Directors and Named Executive Officers: | |||||
| Matthew Kinsella^(2)^ | 8,537,158 | 3.9 | % | ||
| Catherine Lego^(3)^ | 560,481 | * | |||
| Eric Bjornholt | — | — | |||
| Kristina Johnson^(4)^ | 406,578 | * | |||
| Dawn Meyerriecks^(5)^ | 347,403 | * | |||
| David Singer^(6)^ | 34,740 | * | |||
| Paul Lipman^(7)^ | 1,056,975 | * | |||
| Pranav Gokhale^(8)^ | 2,604,519 | 1.2 | % | ||
| All directors and executive officers as a group (10 individuals)^(9)^ | 13,547,854 | 6.0 | % | ||
| Five Percent Holders: | |||||
| BOKA Group Holdings^(10)^ | 12,448,810 | 5.8 | % | ||
| Entities Affiliated with Global Frontier^(11)^ | 25,622,170 | 11.8 | % | ||
| Entities Affiliated with LCP Quantum Partners^(12)^ | 30,528,914 | 14.1 | % | ||
| Entities Affiliated with Maverick Capital^(13)^ | 19,933,624 | 9.2 | % | ||
| * | Less than one percent. | ||||
| --- | --- | ||||
| (1) | Unless otherwise noted, the principal business address of each of the following individuals is c/o Infleqtion, Inc., 1315 West Century Drive, Suite 150, Louisville, CO 80027. | ||||
| --- | --- |
6
| (2) | Consists of (i) 5,950,380 shares of Common Stock issuable upon exercise of options held directly by Mr. Kinsella, all of which are early exercisable as of the date of grant, which number of shares includes 3,675,235 shares vested as of the Closing Date and 4,025,258 shares for which the time- and service-based vesting condition would be satisfied within 60 days of the Closing Date, (ii) 560,327 shares of Common Stock held of record by Kinsella Investment Holdings, LLC, (iii) 1,889,829 shares of Common Stock issuable upon exercise of options held by Kinsella Investment Holdings, LLC, all of which shares are vested as of the Closing Date, (iv) 34,740 shares of Common Stock held by the John R. Kinsella Children’s Trust, for which Mr. Kinsella serves as co-trustee and (v) 101,882 shares held by the John R. Kinsella Revocable Living Trust, for which Mr. Kinsella serves as a trustee. Mr. Kinsella may be deemed to beneficially own shares held by Kinsella Investment Holdings, LLC, the John R. Kinsella Children’s Trust and the John R. Kinsella Revocable Trust by virtue of his voting power and investment power over such shares. |
|---|---|
| (3) | Consists of (i) 477,680 shares of Common Stock held directly by Ms. Lego, 82,990 of which will be subject to the Company’s right of repurchase after 60 days from the Closing Date, and (ii) 82,801 shares of Common Stock held of record by Lego Holdings, LP. Ms. Lego may be deemed to beneficially own shares held by Lego Holdings, LP by virtue of her voting power and investment power over such shares. |
| --- | --- |
| (4) | Consists of (i) 33,120 shares of Common Stock held of record by Catalyzer Ventures, LP Fund 1 and (ii) 373,458 shares of Common Stock issuable upon exercise of options held directly by Dr. Johnson, which number of shares consists of 207,477 shares vested as of the Closing Date and 228,224 shares for which the time- and service-based vesting condition would be satisfied within 60 days of the Closing Date. Dr. Johnson may be deemed to beneficially own shares held by Catalyzer Ventures, LP Fund 1 by virtue of her voting power and investment power over such shares. |
| --- | --- |
| (5) | Consists of 347,403 shares of Common Stock issuable upon exercise of options held by Ms. Meyerriecks, all of which shares are vested as of the Closing Date. |
| --- | --- |
| (6) | Consists of 34,740 shares of Common Stock issuable upon exercise of options held by Mr. Singer, all of which shares are vested as of the Closing Date. |
| --- | --- |
| (7) | Consists of 1,056,975 shares of Common Stock issuable upon exercise of options held by Mr. Lipman, all of which shares are vested as of the Closing Date. |
| --- | --- |
| (8) | Consists of (i) 2,338,980 shares of Common Stock held directly by Mr. Gokhale and (2) 265,539 shares of Common Stock issuable upon exercise of options held by Mr. Gokhale, which number of shares consists of 244,268 shares vested as of the Closing Date and 255,124 shares for which the time- and service-based vesting condition would be satisfied within 60 days of the Closing Date. |
| --- | --- |
| (9) | Consists of (i) 3,492,908 shares of Common Stock and (ii) 9,918,324 shares of Common Stock issuable upon exercise of options, which number of shares consists of 7,455,927 shares vested as of the Closing Date and 7,837,553 shares for which the time- and service-based vesting condition would be satisfied within 60 days of the Closing Date. |
| --- | --- |
| (10) | The general partner of BOKA Group Holdings I LP is BOKA Group Holdings GP LLC. John James is the managing member of BOKA Group Holdings GP LLC and may be deemed to share voting and investment power with respect to the securities held by BOKA Group Holdings I LP. John James disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein. The principal address for BOKA Group Holdings GP LLC is 1330 Avenue of the Americas, 23rd Floor, New York, NY 10019. |
| --- | --- |
| (11) | Consists of (i) 4,783,076 shares of Common Stock held by Global Frontier Partners, LP (GF Partners) and (ii) 20,839,094 shares of Common Stock held by Global Frontier Quantum Opportunity Fund, LP (GF Quantum Opportunity Fund). Grant Dollens is the general partner of GF Partners and GF Quantum Opportunity Fund and may be deemed to share voting and investment power with respect to their securities. Grant Dollens disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein. The address for GF Partners and GF Quantum Opportunity Fund is 92 Broad St., Charleston, South Carolina 29401. |
| --- | --- |
| (12) | Consists of (i) 14,363,414 shares of Common Stock held by LCP Quantum Partners, LLC, (ii) 3,097,848 shares of Common Stock held by LCP Quantum Partners II, LLC, (iii) 7,796,419 shares of Common Stock held by LCP Quantum Partners III, LLC, (iv)1,814,502 shares of Common Stock held by LCP Quantum Partners IV, LLC, (v) 2,816,731 shares of Common Stock held by LCP Quantum Partners V, LLC, and (vi) 640,000 shares of Common Stock held by LCP Quantum Partners VI, LLC. LCP Quantum Management, LLC (LCP Management I) is the manager of LCP Quantum Partners, LLC and LCP Quantum Partners II, LLC; and LCP Quantum Management III, LLC (LCP Management III) is the manager of LCP Quantum Partners III, LLC, LCP Quantum Partners IV, LLC and LCP Quantum Partners V, LLC and LCP Quantum Partners VI, LLC. Tyler Brous is the manager of each of LCP Management I and LCP Management III. As a result, Tyler Brous may be deemed to share voting and investment power with respect to the securities held by LCP Management I and LCP Management III and, through those entities, indirectly, by each of LCP Quantum Partners, LLC, Brous may be deemed to share voting and investment power with respect to the securities held by LCP Management I and LCP Management III and, through those entities, indirectly, by each of LCP Quantum Partners, LLC, LCP Quantum Partners II, LLC, LCP Quantum Partners III, LLC, LCP Quantum Partners IV, LLC, LCP Quantum Partners V, LLC and LCP Quantum Partners VI, LLC. Tyler Brous disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein. The address for LCP Management I and LCP Management III is 3889 Maple Ave. Suite 220 Dallas, TX 75219. |
| --- | --- |
| (13) | Consists of (i) 6,217,382 shares of Common Stock held by Maverick Advisors Fund, L.P. (Maverick Advisors), (ii) 9,816,912 shares of shares of Common Stock held by Maverick Ventures Investment Fund, L.P. (Maverick Ventures), (iii) 527,861 shares of shares of Common Stock held by Maverick Designated Investments Fund, L.P. (Maverick Designated Investments), (iv) 2,879,769 shares of shares of Common Stock held by Maverick Silicon Fund, L.P. (Maverick Silicon), (v) 135,800 shares of shares of Common Stock held by Maverick Fund II, Ltd. (Maverick Fund II), (vi) 136,300 shares of shares of Common Stock held by Maverick Fund USA, Ltd. (Maverick USA), (vii) 143,900 shares of shares of Common Stock held by Maverick Long Enhanced Fund, Ltd. (Maverick Enhanced), (viii) 75,700 shares of shares of Common Stock held by Maverick Long Fund, Ltd (Maverick Long), (ix) 8,300 shares of shares of Common Stock held by a separately managed account managed by Maverick Capital, Ltd. Maverick Capital Ventures, LLC is the general partner of each of Maverick Advisors and Maverick Ventures, and Lee S. Ainslie III and David B. Singer are the managing partners of Maverick Capital Ventures, LLC. Maverick Silicon Fund GP, LLC is the general partner of Maverick Silicon, and Mr. Ainslie and Andrew Homan are the managing partners of Maverick Silicon Fund GP, LLC. Maverick Capital, Ltd. is the investment manager of Maverick Designated Investments Fund. Maverick Capital Management, LLC is the general partner of Maverick Capital, Ltd. and Mr. Ainslie is the sole manager of Maverick Capital Management, LLC. and the managing partner of Maverick Capital, Ltd. Maverick Capital, Ltd. is also the investment advisor to Maverick USA, Maverick Fund II, Maverick Enhanced and Maverick Long. The principal address for each of the funds referenced above is 1900 N. Pearl Street, 20^th^ Floor, Dallas TX 75201. |
| --- | --- |
7
Directors and Executive Officers
Information with respect to the Company’s directors and executive officers after the Closing is set forth in the Proxy Statement/Prospectus in the sections titled “
Board of Directors and Management Following the Business Combination
” and “
Executive and Director Compensation
” beginning on pages 320 and page 309, respectively, of the Proxy Statement/Prospectus, which are incorporated herein by reference.
Directors
Effective as of the Closing, in connection with the Business Combination, the size of the board of directors of the Company (the “Board”) was set at seven members. Each of Michael Klein, Stephen Murphy, William Sherman and Paul D. Lapping resigned as directors of the Company effective as of the Closing. Effective as of the Closing, Catherine Lego, Eric Bjornholt, Kristina Johnson, Matthew Kinsella, Dawn Meyerriecks and David Singer were elected to serve as directors on the Board, with one Board seat remaining vacant. Ms. Lego will serve as chairman of the Board.
Mr. Bjornholt and Ms. Meyerriecks were appointed to serve as Class I directors, with terms expiring at the Company’s 2027 annual meeting of stockholders; Mr. Singer and Dr. Johnson were appointed to serve as Class II directors, with terms expiring at the Company’s 2028 annual meeting of stockholders; and Mr. Kinsella and Ms. Lego were appointed to serve as Class III directors, with terms expiring at the Company’s 2029 annual meeting of stockholders. Biographical information for these individuals is set forth in the Proxy Statement/Prospectus in the section titled “
Board of Directors and Management After the Business Combination—Executive Officers and Directors After the Business Combination
” beginning on page 320 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Committees of the Board of Directors
Effective as of as of 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 “Nominating and Corporate Governance Committee”). Each of the committees reports to the Board.
Effective as of the Closing, the Board appointed Mr. Bjornholt, Ms. Lego and Mr. Singer to serve on the Audit Committee, with Mr. Bjornholt serving as chair of the Audit Committee. The Board also, effective as of the Closing, appointed Dr. Johnson, Mr. Singer and Ms. Meyerriecks to serve on the Compensation Committee, with Dr. Johnson serving as chair of the Compensation Committee. The Board appointed Ms. Meyerriecks and Dr. Johnson to serve on the Nominating and Corporate Governance Committee, with Ms. Meyerriecks serving as chair of the Nominating and Corporate Governance Committee.
Executive Officers
Effective as of the Closing, in connection with the Business Combination, the Board appointed the following individuals as the Company’s executive officers: Matthew Kinsella to serve as Chief Executive Officer, Pranav Gokhale to serve as Chief Technology Officer, Ilan Hart to serve as Chief Financial Officer, Paul Lipman to serve as Chief Revenue Officer and Jason Hall to serve as Chief Legal Officer. Effective as of the Closing, Michael Klein resigned as Chief Executive Officer, President and Chairman, and Jay Taragin resigned as Chief Financial Officer. The biographical information for Company’s new executive officers, set forth in the Proxy Statement/Prospectus in the section titled “
Board of Directors and Management After the Business Combination
” beginning on page 320 of the Proxy Statement/Prospectus, is incorporated herein by reference. Executive and Director Compensation
Executive Compensation
Information with respect to the compensation of the Company’s named executive officers is set forth in the Proxy Statement/Prospectus in the section titled “
Executive and Director Compensation
” beginning on page 309 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
8
Director Compensation
On February 13, 2026, the Board adopted a non-employee director compensation policy. Pursuant to this policy, effective February 14, 2026, each member of the Board who is not an employee of the Company receives the following compensation for his or her service as a member of the Board:
| • | an initial option grant with an aggregate Black-Scholes value equal to $285,000, which vests over a three-year period, with one-third of the shares vesting on the first anniversary of the Board member’s initial election or appointment, and the remaining shares vesting in equal monthly installments thereafter, subject to the Board member’s continued service through each such date. The initial awards will accelerate and vest in full upon a change in control, subject to the member’s continuous service through such date; and |
|---|---|
| • | an annual option grant with an aggregate Black-Scholes value equal to $190,000, which fully vests one year following the date of grant (or, if earlier, the date of the Company’s next annual stockholder meeting following the date of grant), subject to the Board member’s continued service through such date. The annual awards will accelerate and vest in full upon a change in control, subject to the member’s continuous service through such date. |
| --- | --- |
The non-executive chair of the Board will receive an annual cash retainer of $30,000 for his or her service in that role (in addition to the annual retainer for each Board member described below). The chairs of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee will receive annual cash retainers of $20,000, $15,000 and $10,000, respectively, for his or her respective committee service. Members of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, other than the chairs of such committees, will receive annual cash retainers of $10,000, $7,500 and $5,000, respectively, for his or her respective committee service. In addition to the foregoing, each Board member will receive an annual retainer of $45,000 for his or her service on the Board.
Information with respect to the compensation of Legacy Infleqtion’s directors prior to the Closing is set forth in the Proxy Statement/Prospectus in the section titled “
Executive and Director Compensation
” beginning on page 317 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Compensation Committee Interlocks and Insider Participation
Interlocks and insider participation information regarding the Company’s executive officers is set forth in the Proxy Statement/Prospectus in the section titled “
Board of Directors and Management After the Business Combination—Compensation Committee Interlocks and Insider Participation
” beginning on page 327 of the Proxy Statement/Prospectus, which is incorporated herein by reference. Certain Relationships and Related Person Transactions, and Director Independence
The certain relationships and related person transactions of the Company are described in the Proxy Statement/Prospectus in the section titled “
Certain Relationships and Related Person Transactions
” beginning on page 379 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
The Board has determined that each of the directors of the Company other than Mr. Kinsella qualify as independent directors, as defined under the listing standards of The New York Stock Exchange (the “NYSE listing requirements”), and that the Board consists of a majority of “independent directors,” as defined under the rules of the SEC and NYSE listing requirements relating to director independence requirements.
Legal Proceedings
Information about legal proceedings is set forth in the Proxy Statement/Prospectus in the section “
Information About Infleqtion—Legal
” on page 289 the Proxy Statement/Prospectus, which is incorporated herein by reference.
9
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Market Information and Holders
Churchill’s Class A Ordinary Shares and the Warrants were historically quoted on The Nasdaq Capital Market under the symbols “CCCX” and “CCCXW,” respectively. On February 17, 2026, the Common Stock and Warrants will begin trading on The New York Stock Exchange under the new trading symbols “INFQ” and “INFQ WS,” respectively.
On February 12, 2026, in connection with the Domestication, all of the units previously issued by Churchill separated into their component parts of one Class A Ordinary Share and one-quarter of one whole Warrant. Immediately thereafter, the Depositary Trust Company effected a mandatory exchange of the Class A Ordinary Shares for shares of Common Stock, on a one-for-one basis. On February 13, 2026, the units, the Class A Ordinary Shares and the Warrants ceased trading on The Nasdaq Capital Market.
As of the Closing Date, and following the completion of the Business Combination, the Company had 216,471,927 shares of the Common Stock issued and outstanding held of record by 261 holders, and 10,425,000 Warrants outstanding held of record by two holders. Such amounts do not include DTC participants or beneficial owners holding shares through nominee names.
Dividends
The Company has not paid any cash dividends on the Common Stock to date. The Company may retain future earnings, if any, for future operations, expansion and debt repayment and has no current plans to pay cash dividends for the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of the Board and will depend on, among other things, the Company’s results of operations, financial condition, cash requirements, contractual restrictions and other factors that the Board may deem relevant. In addition, the Company’s ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness the Company or its subsidiaries incur. The Company does not anticipate declaring any cash dividends to holders of the Common Stock in the foreseeable future.
Securities Authorized for Issuance Under Equity Compensation Plans
Reference is made to the disclosures described in the Proxy Statement/Prospectus in the sections titled “Proposal No. 6 — The Incentive Plan Proposal” and “Proposal No. 7 — The ESPP Proposal” beginning on page 233 and 241 thereof, which are incorporated herein by reference. As described below, the Infleqtion, Inc. 2026 Equity Incentive Plan (the “2026 Plan”) and the Infleqtion, Inc. 2026 Employee Stock Purchase Plan (the “ESPP”), including the authorization of the initial share reserves thereunder and annual increases thereto, were approved by Churchill’s shareholders at the Special Meeting.
Recent Sales of Unregistered Securities
Reference is made to the disclosure set forth below under Item 3.02 of this Current Report on Form 8-K concerning the issuance and sale by the Company of certain unregistered securities, which is incorporated herein by reference.
Description of Registrant’s Securities to be Registered
Common Stock
A description of the Common Stock is included in the Proxy Statement/Prospectus in the section titled “
Description of Securities—Post-Closing Company Capital Stock
” beginning on page 346 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Warrants
A description of the Company’s Warrants is included in the Proxy Statement/Prospectus in the section titled “
Description of Securities—Warrants
” beginning on page 348 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
10
Indemnification of Directors and Officers
Information about indemnification of the Company’s directors and officers is set forth in the Proxy Statement/Prospectus in the section titled “
Board of Directors and Management After the Business Combination—Limitation on Liability and Indemnification of Directors and Officers
” beginning on page 328 of the Proxy Statement/Prospectus, which is incorporated herein by reference. The disclosure set forth in Item 1.01 of this Current Report on Form 8-K under the section titled “Indemnification Agreements” is incorporated by reference into this Item 2.01. Financial Statements and Supplementary Data
The information set forth in Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.
Financial Statements and Exhibits
The information set forth in Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth in the “Introductory Note” above is incorporated by reference into this Item 3.02.
The PIPE Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in Item 5.03 of this Current Report on Form 8-K is incorporated herein by reference.
Item 5.01 Changes in Control of the Registrant.
The information set forth in the section titled “Introductory Note” and in the section titled “Security Ownership of Certain Beneficial Owners and Management” in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
As a result of the completion of the Business Combination pursuant to the Merger Agreement, a change of control of Churchill has occurred, and the stockholders of Churchill as of immediately prior to the Closing held 24.0% of the outstanding shares of Common Stock immediately following the Closing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth in the sections titled “Directors and Executive Officers,” “Executive and Director Compensation” and “Certain Relationships and Related Person Transactions” in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
Infleqtion, Inc. 2026 Equity Incentive Plan
At the Special Meeting, the shareholders of the Company considered and approved the 2026 Plan. The 2026 Plan was thereafter approved by the Board of Directors of Churchill on February 12, 2026, and on the Closing Date, the Board ratified the approval of the 2026 Plan. The 2026 Plan became effective immediately upon the Closing.
11
A description of the 2026 Plan is included in the Proxy Statement/Prospectus in the section titled “
Proposal No. 6 - The Incentive Plan Proposal—Description of the Incentive Plan
” beginning on page 234 of the Proxy Statement/Prospectus, which is incorporated herein by reference. The foregoing description of the 2026 Plan is qualified in its entirety by the full text of the 2026 Plan, which is filed as Exhibit 10.9 hereto and incorporated herein by reference. Infleqtion, Inc. 2026 Employee Stock Purchase Plan
At the Special Meeting, the stockholders of the Company considered and approved the ESPP. The ESPP was thereafter approved by the Board of Directors of Churchill on February 12, 2026, and on the Closing Date, the Board ratified the approval of the 2026. The 2026 ESPP became effective immediately upon the Closing.
A description of the ESPP is included in the Proxy Statement/Prospectus in the section titled “
Proposal No. 7 - The ESPP Proposal—Description of the ESPP
” beginning on page 241 of the Proxy Statement/Prospectus, which is incorporated herein by reference. The foregoing description of the ESPP is qualified in its entirety by the full text of the ESPP, which is filed as Exhibit 10.10 hereto and incorporated herein by reference. Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
At the Special Meeting, Churchill’s shareholders voted and approved, among other things, “
Proposal No. 3—The Organizational Documents Proposal” (the “Organization Documents Proposal”
), which is described in greater detail in the Proxy Statement/Prospectus.
The Certificate of Incorporation of the Company (the “Certificate of Incorporation”), which became effective upon filing with the Secretary of State of the State of Delaware on February 12, 2026, includes the amendments proposed by the Organizational Documents Proposal. On February 13, 2026, the Board approved and adopted the Bylaws (the “Bylaws”), which became effective as of the day of Closing.
The disclosures set forth under the “Introductory Note” and in Item 2.01 of this Report are also incorporated herein by reference. Copies of the Certificate of Incorporation and the Bylaws are filed as Exhibit 3.1 and Exhibit 3.2 hereto, respectively, and are incorporated herein by reference.
The description of the Certificate of Incorporation and the general effect of the Certificate of Incorporation and the Bylaws upon the rights of holders of the Company’s capital stock are included in the Proxy Statement/Prospectus in the sections titled “
Proposal No. 2—The Domestication Proposal
” beginning on page 216 and “
Proposal No. 3—The Organizational Documents Proposal
” beginning on page 225, which are incorporated by reference herein. Item 5.05 Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.
In connection with the Business Combination, on the Closing Date, the Board approved and adopted a new Code of Business Conduct & Ethics applicable to all employees, officers and directors of the Company. A copy of the Code of Business Conduct & Ethics can be found at the Company’s website at https://ir.infleqtion.com.
Item 5.06 Change in Shell Company Status.
As a result of the Mergers, which fulfilled the definition of a Business Combination as required by the Amended and Restated Memorandum and Articles of Association of Company, as in effect immediately prior to the Domestication, the Company ceased to be a shell company (as defined in Rule 12b-2 of the Exchange Act) as of the Closing. A description of the Business Combination and the terms of the Merger Agreement are included in the Proxy Statement/Prospectus in the section titled “
Proposal No. 1 - The Business Combination Proposal
” beginning on page 146 of the Proxy Statement/Prospectus, which is incorporated herein by reference. Item 8.01. Other Events.
On February 13, 2026, the Company issued a press release announcing the completion of the Business Combination, a copy of which is furnished as Exhibit 99.2 hereto.
12
The information set forth in Item 8.01 (including Exhibit 99.2) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The unaudited condensed consolidated financial statements of Legacy Infleqtion as of September 30, 2025 and for the nine months ended September 30, 2025 and 2024 and the related notes are included in the Proxy Statement/Prospectus beginning on page
F-86
of the Proxy Statement/Prospectus and are incorporated herein by reference. The audited consolidated financial statements of Legacy Infleqtion as of and for the years December 31, 2024 and 2023 and the related notes are included in the Proxy Statement/Prospectus beginning on page
F-46
of the Proxy Statement/Prospectus and are incorporated herein by reference. The unaudited condensed consolidated financial statements of Churchill as of September 30, 2025 and for the three and nine months ended September 30, 2025 and for the three months ended September 30, 2024 and for the period from January 4, 2024 (inception) through September 30, 2024 and the related notes are included in the Proxy Statement/Prospectus beginning on page
F-19
of the Proxy Statement/Prospectus are incorporated herein by reference. The audited consolidated financial statements of Churchill as of December 31, 2024 and for the period from January 4, 2024 (inception) through December 31, 2024 and the related notes are included in the Proxy Statement/Prospectus beginning on page
F-2
of the Proxy Statement/Prospectus and are incorporated herein by reference. (b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial information of the Company as of September 30, 2025 and for the nine months ended September 30, 2025 and for the year ended December 31, 2024 is set forth in Exhibit 99.1 hereto and is incorporated herein by reference.
(d) Exhibits
13
14
| Exhibit<br>No. | Description |
|---|---|
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). |
| # | As permitted by Regulation S-K, Item 601(b)(10)(iv) of the Securities Exchange Act of 1934, as amended, certain portions of this exhibit have been redacted from the publicly filed document because the Registrant customarily and actually treats that information as private or confidential and the redacted information is not material. The Registrant agrees to furnish a supplemental copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon its request. |
| --- | --- |
15
SIGNATURE
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.
| INFLEQTION, INC. | ||
|---|---|---|
| Dated: February 17, 2026 | ||
| By: | /s/ Ilan Hart | |
| Name: | Ilan Hart | |
| Title: | Chief Financial Officer |
EX-2.1
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
by and among
CHURCHILL CAPITAL CORP X,
AH MERGER SUB I, INC.,
AH MERGER SUB II, LLC
and
COLDQUANTA, INC.
dated as of
September 8, 2025
TABLE OF CONTENTS
| PAGE | |||
|---|---|---|---|
| ARTICLE 1 CERTAIN DEFINITIONS | 3 | ||
| Section 1.01. | Definitions | 3 | |
| Section 1.02. | Construction | 18 | |
| Section 1.03. | Knowledge | 19 | |
| Section 1.04. | Equitable Adjustments | 19 | |
| ARTICLE 2 THE MERGERS | 19 | ||
| Section 2.01. | The Mergers | 19 | |
| Section 2.02. | First Effective Time; Second Effective Time | 19 | |
| Section 2.03. | Effect of the Mergers | 20 | |
| Section 2.04. | Governing Documents | 20 | |
| Section 2.05. | Officers of the Surviving Entity | 20 | |
| Section 2.06. | Further Assurances | 20 | |
| ARTICLE 3 MERGER CONSIDERATION; CONVERSION OF SECURITIES | 21 | ||
| Section 3.01. | Conversion of Company Preferred Stock | 21 | |
| Section 3.02. | Effect of Mergers on Company Common Stock | 21 | |
| Section 3.03. | Treatment of | 21 | |
| Section 3.04. | Dissenting Shares | 22 | |
| Section 3.05. | Exchange Pool | 23 | |
| Section 3.06. | Withholding Rights | 23 | |
| Section 3.07. | Legend | 24 | |
| ARTICLE 4 CLOSING; CLOSING STATEMENT | 24 | ||
| Section 4.01. | Closing | 24 | |
| Section 4.02. | SPAC Closing Statement | 24 | |
| Section 4.03. | Company Closing Statement | 25 | |
| ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 25 | ||
| Section 5.01. | Corporate Organization of the Company | 25 | |
| Section 5.02. | Subsidiaries | 25 | |
| Section 5.03. | Due Authorization | 26 | |
| Section 5.04. | No Conflict | 26 | |
| Section 5.05. | Governmental Authorities; Consents | 26 | |
| Section 5.06. | Current Capitalization | 27 | |
| Section 5.07. | Capitalization of Subsidiaries | 28 | |
| Section 5.08. | Financial Statements | 28 | |
| Section 5.09. | Undisclosed Liabilities | 28 | |
| Section 5.10. | Litigation and Proceedings | 29 | |
| Section 5.11. | Compliance with Laws | 29 | |
| Section 5.12. | Contracts; No Defaults | 29 | |
| Section 5.13. | Company Benefit Plans | 31 | |
| Section 5.14. | Labor Matters | 34 | |
| Section 5.15. | Taxes | 35 | |
| Section 5.16. | Insurance | 36 | |
| Section 5.17. | Permits | 37 |
i
| PAGE | |||
|---|---|---|---|
| Section 5.18. | Real Property | 37 | |
| Section 5.19. | Intellectual Property and Data Security | 38 | |
| Section 5.20. | Anti-Bribery, Anti-Corruption, and Anti-Money Laundering | 41 | |
| Section 5.21. | Sanctions, Import, and Export Controls | 42 | |
| Section 5.22. | Outbound Investment Security Program Status | 42 | |
| Section 5.23. | Environmental Matters | 42 | |
| Section 5.24. | Absence of Changes | 42 | |
| Section 5.25. | Brokers’ Fees | 43 | |
| Section 5.26. | Related Party Transactions | 43 | |
| Section 5.27. | Registration Statement and Proxy Statement | 43 | |
| ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SPAC PARTIES | 43 | ||
| Section 6.01. | Corporate Organization | 43 | |
| Section 6.02. | Due Authorization | 44 | |
| Section 6.03. | No Conflict | 45 | |
| Section 6.04. | Compliance With Laws | 45 | |
| Section 6.05. | Litigation and Proceedings | 45 | |
| Section 6.06. | Governmental Authorities; Consents | 45 | |
| Section 6.07. | Financial Ability; Trust Account | 46 | |
| Section 6.08. | Brokers’ Fees | 46 | |
| Section 6.09. | SEC Reports; Financial Statements; Sarbanes-Oxley Act; Undisclosed Liabilities | 46 | |
| Section 6.10. | Business Activities | 47 | |
| Section 6.11. | Tax Matters | 48 | |
| Section 6.12. | Employees | 50 | |
| Section 6.13. | Capitalization | 50 | |
| Section 6.14. | Nasdaq Stock Market Listing | 51 | |
| Section 6.15. | Sponsor Agreement | 51 | |
| Section 6.16. | Related Party Transactions | 51 | |
| Section 6.17. | Investment Company Act | 51 | |
| Section 6.18. | Sanctions | 52 | |
| Section 6.19. | CFIUS Foreign Person Status | 52 | |
| Section 6.20. | Data Security Program Status | 52 | |
| Section 6.21. | Outbound Investment Security Program Status | 52 | |
| Section 6.22. | Registration Statement and Proxy Statement | 52 | |
| Section 6.23. | Fairness Opinion | 52 | |
| Section 6.24. | No Outside Reliance | 53 | |
| ARTICLE 7 COVENANTS OF THE COMPANY | 53 | ||
| Section 7.01. | Conduct of Business | 53 | |
| Section 7.02. | Inspection | 56 | |
| Section 7.03. | HSR Act and Regulatory Approvals | 56 | |
| Section 7.04. | No Claim Against the Trust Account | 57 | |
| Section 7.05. | Proxy Solicitation; Other Actions | 58 | |
| Section 7.06. | Certain Transaction Agreements | 58 | |
| Section 7.07. | FIRPTA | 59 | |
| Section 7.08. | Termination of Certain Agreements | 59 | |
| Section 7.09. | Written Consent and A&R Registration Rights Agreement | 59 | |
| ARTICLE 8 COVENANTS OF SPAC | 59 | ||
| Section 8.01. | HSR Act and Regulatory Approvals | 59 | |
| Section 8.02. | Indemnification and Insurance | 60 |
ii
| PAGE | |||
|---|---|---|---|
| Section 8.03. | Conduct of SPAC During the Interim Period | 62 | |
| Section 8.04. | Certain Transaction Agreements | 63 | |
| Section 8.05. | Inspection | 63 | |
| Section 8.06. | SPAC Stock Exchange Listing | 64 | |
| Section 8.07. | SPAC Public Filings | 64 | |
| Section 8.08. | Section 16 Matters | 64 | |
| Section 8.09. | SPAC Board of Directors | 64 | |
| Section 8.10. | SPAC Management | 64 | |
| Section 8.11. | Equity Plans | 65 | |
| Section 8.12. | Qualification as an Emerging Growth Company | 65 | |
| Section 8.13. | Domestication | 65 | |
| ARTICLE 9 JOINT COVENANTS | 65 | ||
| Section 9.01. | Support of Transaction | 65 | |
| Section 9.02. | Registration Statement; Proxy Statement; SPAC Special Meeting | 66 | |
| Section 9.03. | PIPE Investment | 69 | |
| Section 9.04. | Exclusivity | 69 | |
| Section 9.05. | Tax Matters | 70 | |
| Section 9.06. | Confidentiality; Publicity | 70 | |
| Section 9.07. | Post-Closing Cooperation; Further Assurances | 71 | |
| Section 9.08. | Stockholder Litigation | 71 | |
| ARTICLE 10 CONDITIONS TO OBLIGATIONS | 71 | ||
| Section 10.01. | Conditions to Obligations of All Parties | 71 | |
| Section 10.02. | Additional Conditions to Obligations of SPAC Parties | 72 | |
| Section 10.03. | Additional Conditions to the Obligations of the Company | 73 | |
| Section 10.04. | Frustration of Conditions | 74 | |
| ARTICLE 11 TERMINATION/EFFECTIVENESS | 74 | ||
| Section 11.01. | Termination | 74 | |
| Section 11.02. | Effect of Termination | 75 | |
| ARTICLE 12 MISCELLANEOUS | 76 | ||
| Section 12.01. | Waiver | 76 | |
| Section 12.02. | Notices | 76 | |
| Section 12.03. | Assignment | 77 | |
| Section 12.04. | Rights of Third Parties | 77 | |
| Section 12.05. | Expenses | 77 | |
| Section 12.06. | Governing Law | 77 | |
| Section 12.07. | Captions; Counterparts | 77 | |
| Section 12.08. | Schedules and Exhibits | 77 | |
| Section 12.09. | Entire Agreement | 77 | |
| Section 12.10. | Amendments | 78 | |
| Section 12.11. | Severability | 78 | |
| Section 12.12. | Jurisdiction; Waiver of Trial by Jury | 78 | |
| Section 12.13. | Enforcement | 78 | |
| Section 12.14. | Non-Recourse | 79 | |
| Section 12.15. | Non-survival of Representations, Warranties and Covenants | 79 | |
| Section 12.16. | Acknowledgements | 79 | |
| Section 12.17. | Conflicts and Privilege | 80 |
iii
| EXHIBITS | ||
|---|---|---|
| Exhibit A | – | Form of SPAC Charter Upon Domestication |
| Exhibit B | – | Form of SPAC Bylaws Upon Domestication |
| Exhibit C | – | Sponsor Agreement |
| Exhibit D | – | Form of Company Voting and Support Agreement |
| Exhibit E | – | Form of A&R Registration Rights Agreement |
| Exhibit F | – | Form of Advisory Agreement |
| Exhibit G | – | Form of First Certificate of Merger |
| Exhibit H | – | Form of Second Certificate of Merger |
| Exhibit I | – | Form of A&R Certificate of Incorporation of the Surviving Corporation |
| Exhibit J | – | Form of A&R LLC Agreement of the Surviving Entity |
| Exhibit K | – | Form of Company Stockholder Written Consent |
| SCHEDULES | ||
| --- | --- | --- |
| Schedule 7.05(a) | – | Financial Statements |
iv
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this “Agreement”) is made and entered into as of September 8, 2025, by and among Churchill Capital Corp X, a Cayman Islands exempted company (which shall transfer by way of continuation and domesticate as a Delaware corporation prior to the Closing) (“SPAC”), AH Merger Sub I, Inc., a Delaware corporation and direct, wholly-owned Subsidiary of SPAC (“Merger Sub I”), AH Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly-owned Subsidiary of SPAC (“Merger Sub II” and together with Merger Sub I, “Merger Subs”) and ColdQuanta, Inc., a Delaware corporation (the “Company”). SPAC, Merger Subs and the Company are collectively referred to herein as the “Parties” and individually as a “Party.” Capitalized terms used and not otherwise defined herein have the meanings set forth in Section 1.01.
RECITALS
WHEREAS, SPAC is a blank check company incorporated as a Cayman Islands exempted company and formed to acquire one or more operating businesses through a Business Combination;
WHEREAS, subject to the satisfaction or waiver of the conditions of this Agreement (other than those conditions that by their terms or nature are to be satisfied at the Closing, but subject to such conditions being capable of being satisfied at the Closing), prior to the Closing, SPAC shall transfer by way of continuation to and domesticate as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended (the “DGCL”), Section 18-212 of the Delaware Limited Liability Company Act (the “DLLCA”), and Part 12 of the Cayman Companies Act (the “Domestication”). The Domestication will take place at least one day prior to the Closing;
WHEREAS, the sole holder of the SPAC Class B Ordinary Shares shall cause to be converted, immediately prior to the Domestication, each then issued and outstanding SPAC Class B Ordinary Share, on a one-for-one basis, into a SPAC Class A Ordinary Share (the “Sponsor Share Conversion”). In connection with the Domestication: (a) each then issued and outstanding SPAC Class A Ordinary Share shall convert automatically, on a one-for-one basis, into a share of SPAC Common Stock; (b) each then issued and outstanding warrant to acquire SPAC Class A Ordinary Shares (each a “Cayman SPAC Warrant”) shall convert automatically into a warrant to acquire a corresponding number of shares of the SPAC Common Stock, on a one-for-one basis (“Domesticated SPAC Warrant”), pursuant to the Warrant Agreement; and (c) each then issued and outstanding unit of SPAC (the “Cayman SPAC Units”) shall be cancelled and will thereafter entitle the holder of such unit to one share of SPAC Common Stock and one-quarter of one Domesticated SPAC Warrant;
WHEREAS, substantially concurrently with, and in order to effectuate, the Domestication, and subject to the satisfaction or waiver of the conditions of this Agreement (other than those conditions that by their terms or nature are to be satisfied at the Closing, but subject to such conditions being capable of being satisfied at the Closing), SPAC will: (a) file a certificate of corporate domestication and a certificate of incorporation with the Secretary of State of the State of Delaware in substantially the form attached as Exhibit A (the “SPAC Charter Upon Domestication”); and (b) adopt bylaws in substantially the form attached as Exhibit B (the “SPAC Bylaws Upon Domestication”). SPAC and the Company may agree upon changes to the forms attached as Exhibits A and B, provided those changes are reflected in a written instrument signed by each of SPAC and the Company;
WHEREAS, on the terms and subject to the conditions of this Agreement and in accordance with the DGCL and other applicable Laws, the Parties intend to enter into a business combination transaction pursuant to which (a) Merger Sub I will merge with and into the Company, with the Company continuing as the surviving corporation (the “Surviving Corporation”) (the “First Merger”), and (b) immediately following the First Merger, the Surviving Corporation will merge with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Surviving Entity”) (the “Second Merger” and, together with the First Merger, the “Mergers”);
1
WHEREAS, for U.S. federal (and, as applicable, state and local) income tax purposes, each of the Parties intends that (i) the Domestication will qualify as a “reorganization” described in Section 368(a)(1)(F) of the Code and the Treasury Regulations promulgated under Section 368 of the Code; (ii) the Sponsor Share Conversion will qualify as a “reorganization” described in Section 368(a)(1)(E) of the Code and the Treasury Regulations promulgated under Section 368 of the Code; (iii) the Mergers, taken together as integrated steps of a single transaction for U.S. federal income tax purposes, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder; and (iv) this Agreement shall constitute a “plan of reorganization” for the purposes of Section 368 of the Code and Treasury Regulations Section 1.368-2(g);
WHEREAS, the Company Board has unanimously (i) determined that the Mergers are fair to, and in the best interests of the Company and the Holders, (ii) approved and adopted this Agreement and declared it advisable and approved the Transactions (including the Mergers), and (iii) recommended that the stockholders of the Company approve and adopt this Agreement and approve the Transactions (including the Mergers) and directed that this Agreement and the Transactions (including the Mergers) be submitted for consideration by the stockholders of the Company (the “Company Board Recommendation”);
WHEREAS, the board of directors of SPAC has unanimously (i) determined that it is in the best interests of SPAC and the shareholders of SPAC, and declared it advisable, to enter into this Agreement providing for the Domestication and the Mergers in accordance with the DGCL and DLLCA, (ii) approved this Agreement and the Transactions, including the Domestication and the Mergers in accordance with the DGCL, the DLLCA, and the Cayman Companies Act on the terms and subject to the conditions of this Agreement, and (iii) adopted a resolution recommending the SPAC Stockholder Matters be approved and adopted by the shareholders of SPAC (the “SPAC Board Recommendation”);
WHEREAS, concurrently with the execution and delivery of this Agreement, Sponsor and SPAC have entered into the Sponsor Agreement, a copy of which is attached as Exhibit C hereto;
WHEREAS, concurrently with the execution and delivery of this Agreement, certain Holders holding shares of Company Stock sufficient to constitute the Company Stockholder Approval have entered into one or more Voting and Support Agreements substantially in the form of Exhibit D attached hereto (each, a “Company Voting and Support Agreement”)^^with SPAC pursuant to which, inter alia, such Holders have agreed to vote their respective shares of Company Stock in favor of this Agreement, the Mergers and the Transactions;
WHEREAS, concurrently with the execution and delivery of this Agreement, SPAC, Sponsor, and certain stockholders of the Company have entered into an Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”) substantially in the form attached hereto as Exhibit E, pursuant to which, effective as of the Closing, among other things certain stockholders of the Company have agreed, subject to certain exceptions, to not transfer the Merger Consideration received by them in connection with the Mergers for certain specified periods of time following the Closing Date; and
WHEREAS, concurrently with the execution and delivery of this Agreement, SPAC and an Affiliate of Sponsor have entered into an Advisory Agreement (the “Advisory Agreement”) substantially in the form attached hereto as Exhibit F, pursuant to which, effective as of the Closing, among other things, such Affiliate will provide financial advisory, strategy consulting, business development and investor relations to the Company.
2
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound, the Parties hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.01. Definitions. For purposes of this Agreement, the following capitalized terms have the following meanings:
“2017 Plan” means the ColdQuanta, Inc. 2017 Stock Incentive Plan, as amended from time to time.
“A&R Registration Rights Agreement” has the meaning specified in the Recitals.
“Acquisition Transaction” has the meaning specified in Section 9.04(a).
“Action” means any claim, action, suit, assessment, arbitration or legal, judicial or administrative proceeding (whether at Law or in equity) by or before a Governmental Authority.
“Additional SEC Reports” has the meaning specified in Section 8.07.
“Advisory Agreement” has the meaning specified in the Recitals.
“Affiliate” means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise. The term “control” means the ownership of a majority of the voting securities of the applicable Person or the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the applicable Person, whether through ownership of voting securities, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative thereto; provided, that, in no event shall Sponsor be considered an Affiliate of any portfolio company of any investment fund affiliated with M. Klein & Company nor shall any portfolio company of any investment fund affiliated with M. Klein & Company be considered to be an Affiliate of Sponsor; provided, further, that, in no event shall the Company or any of the Company’s Subsidiaries be considered an Affiliate of any portfolio company (other than the Company and its Subsidiaries) of any investment fund affiliated with any direct or indirect equityholder of the Company nor shall any portfolio company (other than the Company and its Subsidiaries) of any investment fund affiliated with any direct or indirect equityholder of the Company be considered to be an Affiliate of the Company or any of the Company’s Subsidiaries.
“Agreement” has the meaning specified in the preamble hereto.
“AI Inputs” has the meaning specified in Section 5.19(f)(i).
“Antitrust Laws” means any supranational, national, federal, state, county, local or foreign antitrust, competition or trade regulation Laws that are designed or intended to prohibit, restrict, investigate or regulate actions having the purpose or effect of monopolization, attempted monopolization, abuse of dominance or restraint of trade or lessening competition through merger or acquisition.
“Appraisal Rights Deadline” has the meaning specified in Section 9.02(f).
“Available Closing SPAC Cash” means an amount equal to (i) all amounts in the Trust Account (after reduction for the aggregate amount of payments required to be made in connection with the SPAC Stockholder Redemption and any Permitted Withdrawals but before (A) payment of any SPAC Transaction Expenses or
3
Company Transaction Expenses and (B) repayment of Sponsor loans, if any), plus (ii) the net proceeds of any incremental financing raised by SPAC or the Company in connection with the transactions contemplated by this Agreement, including for the avoidance of doubt, any amounts raised or funded in connection with a PIPE Investment in accordance with the terms and conditions of the PIPE Subscription Agreements. For the avoidance of doubt, such amount shall exclude any cash and cash equivalents on the balance sheet or otherwise in the bank accounts of the Company.
“Business Combination” has the meaning ascribed to such term in the Existing SPAC Governing Document.
“Business Combination Proposal” has the meaning set forth in Section 9.04(b).
“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York or San Francisco, California are authorized or required by Law to close.
“Business Software” means all material Software owned or purported to be owned by the Company or any of its Subsidiaries.
“Capitalization Date” has the meaning specified in Section 5.06(b).
“Cayman Companies Act” means the Companies Act (Revised) of the Cayman Islands.
“Cayman SPAC Units” has the meaning specified in the Recitals.
“Cayman SPAC Warrant” has the meaning specified in the Recitals.
“Closing” has the meaning specified in Section 4.01.
“Closing Date” has the meaning specified in Section 4.01.
“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
“Company” has the meaning specified in the preamble hereto.
“Company AI” has the meaning specified in Section 5.19(f)(i).
“Company Benefit Plan” has the meaning specified in Section 5.13(a).
“Company Board” means the Board of Directors of the Company.
“Company Board Recommendation” has the meaning specified in the Recitals.
“Company Certificate of Incorporation” means the Fourth Amended and Restated Certificate of Incorporation of the Company, filed with the Secretary of State of the State of Delaware on December 27, 2024.
“Company Closing Statement” has the meaning specified in Section 4.03.
“Company Common Stock” means the common stock, par value $0.0001 per share, of the Company.
“Company Convertible Securities” means (a) any Simple Agreement for Future Equity issued by the Company and (b) any convertible promissory notes or other convertible debt that is convertible into or exchangeable for capital stock of the Company.
4
“Company Cure Period” has the meaning specified in Section 11.01(b).
“Company Disclosure Letter” has the meaning specified in ARTICLE 5.
“Company Employee” means as of the date of determination, an employee of the Company or any of its Subsidiaries as of such date.
“Company Employee List” means the letter provided by the Company to SPAC simultaneously with the execution and delivery of this Agreement, which letter contains a true and complete list of each Company Employee as of the date of this Agreement, on a no-name basis if required by applicable Law, together with each such Company Employee’s title or position, work location, full-time or part-time status, current rate of hourly wage or salary, and current annual target cash bonus opportunity, in each case as of the date of this Agreement and as applicable.
“Company Equity Award” means, collectively, the Company Options and the Company Restricted Stock Awards.
“Company Intellectual Property” means the Owned Intellectual Property and Licensed Intellectual Property.
“Company Options” means all issued and outstanding options to purchase or otherwise acquire Company Common Stock (whether or not vested) held by any Person granted under the 2017 Plan.
“Company Preferred Stock” means the Company Series A Preferred Stock, Company Series B Preferred Stock, Company Series B-1 Preferred Stock, Company Series C Preferred Stock, Company Series C-1 Preferred Stock, Company Series Seed Preferred Stock, Company Series Seed II Preferred Stock.
“Company Representations” means the representations and warranties of the Company expressly and specifically set forth in ARTICLE 5 of this Agreement, as qualified by the Company Disclosure Letter. For the avoidance of doubt, the Company Representations are solely made by the Company.
“Company Restricted Stock Award” means any shares of Company Common Stock or Company Preferred Stock that are subject to vesting or forfeiture, whether granted under the 2017 Plan, issued in respect of early exercised Company Options, issued as contingent consideration, or otherwise.
“Company Series A Preferred Stock” means the Series A preferred stock, par value $0.0001 per share, of the Company.
“Company Series B Preferred Stock” means the Series B preferred stock, par value $0.0001 per share, of the Company.
“Company Series B-1 Preferred Stock” means the Series B-1 preferred stock, par value $0.0001 per share, of the Company.
“Company Series C PreferredStock” means the Series C preferred stock, par value $0.0001 per share, of the Company.
“Company Series C-1 Preferred Stock” means the Series C-1 preferred stock, par value $0.0001 per share, of the Company.
“Company Series Seed Preferred Stock” means the Series Seed preferred stock, par value $0.0001 per share, of the Company.
5
“Company Series Seed II Preferred Stock” means the Series Seed II preferred stock, par value $0.0001 per share, of the Company.
“Company Service Provider” means each individual who is a current or former director, officer, employee, independent contractor or other service provider of the Company or any of its Subsidiaries, including any Company Employee.
“Company Specified Representations” has the meaning specified in Section 10.02(a)(i).
“Company Stock” means the Company Common Stock and the Company Preferred Stock.
“Company Stockholder Agreements” means (i) the Company Certificate of Incorporation; (ii) the Fourth Amended and Restated Voting Agreement, dated as of December 27, 2024 by and among the Company and certain Holders; (iii) the Fourth Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of December 27, 2024 by and among the Company and certain Holders; and (iv) the Fourth Amended and Restated Investors’ Rights Agreement, dated as of December 27, 2024 by and among the Company and certain Holders.
“Company Stockholder Approval” means the adoption of this Agreement by the vote or consent of (i) the holders of a majority of the voting power of the outstanding capital stock of the Company (voting together as a single class, and, with respect to the Company Preferred Stock, on an as-converted to Company Common Stock basis) and (ii) the holders of a majority of the voting power of the outstanding Company Preferred Stock (voting together as a single class on an as-converted to Company Common Stock basis).
“Company Subsidiary Securities” has the meaning specified in Section 5.07.
“Company Total Shares” means the sum of (i) the aggregate number of issued and outstanding shares of Company Common Stock as of immediately prior to the First Effective Time after giving effect to the Conversions set forth under Section 3.01 and including, for the avoidance of doubt, shares subject to any Company Restricted Stock Award, and (ii) the aggregate number of shares of Company Common Stock issuable upon the exercise of all outstanding Company Options (vested and unvested) as of immediately prior to the First Effective Time.
“Company Transaction Expenses” means all accrued fees, costs and expenses of the Company and its Subsidiaries incurred prior to and through the Closing Date in connection with the negotiation, preparation and execution of this Agreement, the other Transaction Agreements, the performance and compliance with all Transaction Agreements and conditions contained herein to be performed or complied with at or before Closing, and the consummation of the Transactions, including the fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of the Company and its Subsidiaries, to the extent unpaid prior to the Closing; provided that, any engagement letters the Company intends to enter into with any (i) financial advisors or (ii) capital markets advisors will, in each case, require the prior written consent of SPAC.
“Company Voting and Support Agreement” has the meaning specified in the Recitals.
“Confidentiality Agreement” has the meaning specified in Section 12.09.
“Contracts” means any written legally binding contracts, agreements, subcontracts, leases and purchase orders and all material written amendments, modifications and written supplements thereto.
“Conversions” has the meaning specified in Section 3.01.
“Cooley” has the meaning specified in Section 12.17(b).
6
“D&O Tail” has the meaning specified in Section 8.02(b).
“Data Security Program” means Executive Order 14117 and rules issued thereunder, including 28 C.F.R. Part 202, as amended from time to time.
“DGCL” has the meaning specified in the Recitals.
“Dissenting Shares” has the meaning specified in Section 3.04.
“Dissenting Stockholders” has the meaning specified in Section 3.04.
“DLLCA” has the meaning specified in the Recitals.
“Domesticated SPAC Warrant” has the meaning specified in the Recitals.
“Domestication” has the meaning specified in the Recitals.
“DPA” has the meaning specified in Section 6.20.
“Enforceability Exceptions” has the meaning specified in Section 5.03.
“Environmental Laws” means any and all applicable Laws relating to pollution or protection of the environment (including natural resources) or human health and safety (with respect to exposure to Hazardous Materials), or the use, storage, emission, disposal or release of Hazardous Materials, each as in effect as of the date hereof.
“Equity Plans” has the meaning specified in Section 8.11.
“Equity Value” means $1,800,000,000.
“ERISA” has the meaning specified in Section 5.13(a).
“ERISA Affiliate” means each entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the Company and its Subsidiaries, or that is, or was at the relevant time, a member of the same “controlled group” as the Company and its Subsidiaries pursuant to Section 4001(a)(14) of ERISA.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Agent” has the meaning specified in Section 3.05(a).
“Exchange Pool” has the meaning specified in Section 3.05(a).
“Exchange Ratio” means the quotient obtained by dividing (i) the Per Share Equity Value by (ii) ten dollars ($10.00).
“Exchanged Option” has the meaning specified in Section 3.03(b).
“Excise Tax” means any Taxes imposed on SPAC pursuant to Section 4501 of the Code (and any related guidance, including IRS Notice 2023-2) with respect to the exercise of any SPAC Stockholders of their redemption rights, and any penalties or interest thereon.
“Excluded Share” has the meaning specified in Section 3.02(c).
7
“Existing SPAC Governing Document” means the Amended and Restated Memorandum and Articles of Association of SPAC, as adopted by special resolution on May 13, 2025 and as in effect on the date hereof.
“Export Administration Regulations” means 15 C.F.R. 730-774, as implemented or revised from time to time.
“Export-Import Laws” means all applicable Laws and regulations relating to export, reexport, transfer, and import controls, including but not limited to the U.S. Export Controls Act of 2018 (22 U.S.C. 2751 et seq.), the Export Administration Regulations, the International Traffic in Arms Regulations, the customs and import Laws administered by U.S. Customs and Border Protection, the UK export control Laws and regulations and the EU military and dual-use export control regulations and additional export and import restrictions imposed by EU Member States.
“Extended Termination Date” has the meaning specified in Section 11.01(b).
“FATA” has the meaning specified in Section 8.01(d).
“Financial Statements” has the meaning specified in Section 5.08(a).
“First Certificate of Merger ” has the meaning specified in Section 2.02(a).
“First Effective Time” has the meaning specified in Section 2.02(a).
“First Merger” has the meaning specified in the Recitals.
“Foreign Benefit Plan” has the meaning specified in Section 5.13(j).
“GAAP” means United States generally accepted accounting principles, consistently applied.
“Generative AI Tools” has the meaning specified in Section 5.19(f)(iii).
“Government Closure” has the meaning specified in Section 7.03(a).
“Government Official” means any officer or employee of a Governmental Authority or any department, agency, or instrumentality thereof, including any political subdivision thereof or any corporation or other Person owned or controlled in whole or in part by any Governmental Authority or any sovereign wealth fund, or of a public international organization, or any Person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization, or any political party, party official, or candidate thereof.
“Governmental Authority” means any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal.
“Governmental Order” means any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any Governmental Authority.
“Grant Date” has the meaning specified in Section 5.13(e).
“Hazardous Material” means material, substance or waste that is listed, regulated, or otherwise defined as “hazardous,” “toxic,” or “radioactive,” or as a “pollutant” or “contaminant” (or words of similar intent or meaning) under applicable Environmental Laws, including but not limited to petroleum, petroleum by-products, asbestos or asbestos-containing material, polychlorinated biphenyls, per- and polyfluoroalkyl substances, flammable or explosive substances, or pesticides.
8
“Holders” means all Persons who hold one or more shares of Company Stock as of immediately prior to the First Effective Time.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“ICE” has the meaning specified in Section 5.14(g).
“Indebtedness” means, with respect to any Person as of any time, without duplication, (i) all indebtedness for borrowed money of such Person or indebtedness issued by such Person in substitution or exchange for borrowed money, (ii) indebtedness evidenced by any note, bond, debenture or other debt security, in each case, as of such time of such Person, (iii) obligations of such Person for the deferred purchase price of property or other services (other than trade payables or accruals incurred in the ordinary course of business), (iv) all obligations as lessee that are required to be capitalized in accordance with GAAP (other than real estate leases and any other leases that are only required to be capitalized upon adoption of ASC 842), (v) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, to the extent drawn or claimed against, (vi) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, (vii) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness of such Person, and (viii) all obligations of the type referred to in clauses (i) - (vii) of this definition of any other Person, the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including any guarantee of such obligations. Notwithstanding anything to the contrary contained herein, “Indebtedness” of any Person shall not include any item that would otherwise constitute “Indebtedness” of such Person that is an obligation between such Person and any wholly-owned Subsidiary of such Person or between any two or more wholly-owned Subsidiaries of such Person.
“Indemnified Person” has the meaning specified in Section 8.02(a).
“Indemnitee Affiliates” has the meaning specified in Section 8.02(c).
“Information or Document Request” means any request or demand for the production, delivery or disclosure of documents or other evidence, or any request or demand for the production of witnesses for interviews or depositions or other oral or written testimony, by any Regulatory Consent Authority relating to the Transactions or by any third party challenging the Transactions, including any so called “second request” for additional information or documentary material or any civil investigative demand made or issued by any Regulatory Consent Authority or any subpoena, interrogatory or deposition.
“INFQ Group” has the meaning specified in Section 12.17(b).
“Intellectual Property” means all intellectual property rights (including with respect to Technology) created, arising, or protected under applicable Law (or any other similar statutory provision or common law doctrine in the United States or anywhere else in the world), whether registered, unregistered or registrable, including all: (i) patents, patent applications and such rights in inventions (whether or not patentable and whether or not reduced to practice), (ii) trademarks, service marks, trade names, trade dress, logos, slogans and other indicia of commercial source or origin and general intangibles of a like nature, and all goodwill associated with any of the foregoing (collectively, “Trademarks”), (iii) copyrights, mask works and such rights in copyrightable works and works of authorship, and moral rights and technical database and design rights, and rights in data collections, (iv) internet domain names and social media accounts, (v) trade secrets and such rights in confidential information, proprietary information and other non-public information, including inventions, invention disclosures, inventor’s notes, designs, plans, specifications, unpatented blueprints, drawings, discoveries and improvements, know-how, manufacturing and production processes and techniques, research and
9
development information, market know-how, customer lists, and proprietary data (collectively, “Trade Secrets”), (vi) any of the foregoing rights in Software and Technology, (vii) industrial property rights, and (viii) all issuances, registrations and applications to register (including any reissuances, divisionals, continuations, continuations-in-part, revisions, renewals, extensions, and re-examinations thereof and rights to claim priority to) any of the foregoing (i) – (vii).
“Intended Tax Treatment” has the meaning specified in Section 9.05(b).
“Interim Period” has the meaning specified in Section 7.01.
“IRS” means the Internal Revenue Service.
“IT Systems” means all computer systems, servers, networks, websites, firmware, computer hardware and equipment used to process, store, maintain and operate data, information and functions that are owned, controlled, licensed, or leased by a Person, including any Software embedded or installed thereon.
“JOBS Act” has the meaning specified in Section 8.12.
“Labor Contract” has the meaning specified in Section 5.12(a)(ix).
“Labor Union” has the meaning specified in Section 5.12(a)(ix).
“Law” means any applicable statute, law (including principle of common law and law of equity), ordinance, rule, regulation or Governmental Order, in each case, of any Governmental Authority.
“Leased Real Property” means all real property leased by the Company or its Subsidiaries.
“Leases” has the meaning specified in Section 5.18(c).
“Licensed Intellectual Property” has the meaning specified in Section 5.19(a).
“Lien” means any mortgage, deed of trust, pledge, hypothecation, encumbrance, easement, license, option, right of first refusal, security interest or other lien of any kind.
“Malware” has the meaning specified in Section 5.19(d).
“Material Adverse Effect” means, with respect to the Company, a material adverse effect on the business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole; provided, however, that in no event would any of the following (or the effect of any of the following), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect” on the business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole: (a) any change in applicable Laws or GAAP or any interpretation thereof, (b) any change in interest rates or economic, political, business, financial, commodity, currency or market conditions generally, (c) the announcement or the execution of this Agreement, the pendency or consummation of the Mergers or the performance of this Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, licensors, distributors, partners, providers and employees (provided that the exceptions in this clause (c) shall not be deemed to apply to references to “Material Adverse Effect” in the representations and warranties set forth in Section 5.04 and, to the extent related thereto, the condition in Section 10.02(a)), (d) any change generally affecting any of the industries or markets in which the Company or its Subsidiaries operate or the economy as a whole, including inflation or supply chain disruptions, (e) the compliance with the terms of this Agreement or the taking of any action required or contemplated by this Agreement or with the prior written consent of SPAC (provided that the exceptions in this clause (e) shall not be
10
deemed to apply to references to “Material Adverse Effect” in the representations and warranties set forth in Section 5.04 and, to the extent related thereto, the condition in Section 10.02(a)), (f) any earthquake, hurricane, tsunami, tornado, flood, mudslide, wild fire or other natural disaster, act of God or other force majeure event, or acts of terrorism, cyberterrorism, any acts or threats of war (whether or not declared), imposition of tariffs or trade wars, civil unrest, civil disobedience, sabotage, cybercrime, government shutdowns, national or international calamity, military action, outbreak of hostilities, declaration of a national emergency or any other similar event, or any change, escalation or worsening thereof after the date hereof, (g) any national or international political or social conditions in countries in which, or in the proximate geographic region of which, the Company operates, including the engagement by the United States or such other countries in hostilities or the escalation thereof, whether or not pursuant to the declaration of a national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States or such other country, or any territories, possessions, or diplomatic or consular offices of the United States or such other countries or upon any United States or such other country military installation, equipment or personnel, (h) any failure of the Company and its Subsidiaries, taken as a whole, to meet any projections, predictions, forecasts or budgets; provided, that clause (h) shall not prevent or otherwise affect a determination that any change or effect underlying such failure to meet projections, predictions or forecasts has resulted in, or contributed to, or would reasonably be expected to result in or contribute to, a Material Adverse Effect (to the extent such change or effect is not otherwise excluded from this definition of Material Adverse Effect), (i) any epidemic, pandemic or disease outbreak or any Law, directive, pronouncement or guideline issued by a Governmental Authority, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, “sheltering-in-place” or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak or any change in such Law, directive, pronouncement or guideline or interpretation thereof following the date of this Agreement or the Company’s or any of its Subsidiaries’ compliance therewith, (j) any stockholder class action litigation, derivative or similar litigation arising out of or in connection with or relating to this Agreement and the Transactions, including allegations of a breach of fiduciary duty or any demand, action, claim or proceeding for appraisal of any Company Stock pursuant to the DGCL in connection with this Agreement and the Transactions, (k) the identity of, or any facts or circumstances relating to, SPAC, Merger Subs or their respective affiliates, or the availability of equity, debt or other financing to SPAC or Merger Subs, or (l) any matter set forth in the Schedules to this Agreement; provided that, in the case of clauses (a), (b), (d), (f) and (g) such changes may be taken into account to the extent (but only to the extent) that such changes have had a disproportionate impact on the Company and its Subsidiaries, taken as a whole, as compared to other competitors or comparable entities operating in the industries or markets and geographic areas in which the Company and its Subsidiaries operate.
“Material Contracts” has the meaning specified in Section 5.12(a).
“Merger Consideration” means the number of shares of SPAC Common Stock (including shares subject to any SPAC Restricted Stock Award) issuable to holders of Company Stock (including, for the avoidance of doubt, shares subject to any Company Restricted Stock Award) in the Mergers pursuant to ARTICLE 3.
“Merger Sub I” has the meaning specified in the preamble hereto.
“Merger Sub II” has the meaning specified in the preamble hereto.
“Merger Subs” has the meaning specified in the preamble hereto.
“Mergers” has the meaning specified in the Recitals.
“ Modification of Recommendation” has the meaning specified in Section 9.02(e).
“Most Recent Balance Sheet” has the meaning specified in Section 5.08(a).
11
“Multiemployer Plan” means each Company Benefit Plan that is a “multiemployer plan” as defined in Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code.
“Nasdaq” means the Nasdaq Global Market.
“National Security Laws” means any Law relating to foreign investment or national security, including for the avoidance of doubt the NSI Act and the FATA.
“NSI Act” has the meaning specified in Section 8.01(c).
“Open Source Software” means any software that is distributed (i) as “free software” (as defined by the Free Software Foundation), (ii) as “open source software” or pursuant to any license identified as an “open source license” by the Open Source Initiative (www.opensource.org/licenses) or other license that substantially conforms to the Open Source Definition (opensource.org/osd), or (iii) under a license that (A) requires source code or derivative works based on such software to be made publicly available under the same license or (B) prohibits the receipt of consideration in connection with sublicensing or distributing such software.
“Outbound Investment SecurityProgram” means 31 C.F.R. Part 850, as implemented or revised from time to time.
“Owned IntellectualProperty” means all Intellectual Property and Technology that is owned or purported to be owned by the Company or its Subsidiaries.
“Owned Real Property” means all real property owned by the Company or its Subsidiaries.
“Party” and “Parties” have the meanings specified in the preamble hereto.
“Per Share Equity Value” means the quotient obtained by dividing (i) the sum of (A) the Equity Value plus (B) the aggregate exercise price of all Company Options, in each case to the extent outstanding (whether vested or unvested) as of immediately prior to the First Effective Time by (ii) the Company Total Shares.
“Per Share Merger Consideration” means, with respect to any share of Company Common Stock (including, for the avoidance of doubt, any share subject to any Company Restricted Stock Award) that is issued and outstanding immediately prior to the First Effective Time after giving effect to the Conversions set forth under Section 3.01, the right to receive shares of SPAC Common Stock pursuant to Section 3.02(a) or shares subject to any SPAC Restricted Stock Award pursuant to Section 3.03(c).
“Permits” has the meaning specified in Section 5.17.
“Permitted Liens” means (i) statutory or common law Liens of mechanics, materialmen, warehousemen, landlords, carriers, repairmen, construction contractors and other similar Liens that arise in the ordinary course of business, that relate to amounts not yet delinquent or that are being contested in good faith through appropriate Actions, in each case only to the extent appropriate reserves have been established in accordance with GAAP, (ii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business, (iii) Liens for Taxes not yet delinquent or which are being contested in good faith through appropriate Actions for which appropriate reserves have been established in accordance with GAAP, (iv) Liens, encumbrances and restrictions on Leased Real Property (including easements, covenants, rights of way and similar restrictions of record) that (A) are matters of record, (B) would be disclosed by a current, accurate survey or physical inspection of such Leased Real Property, and (C) do not materially interfere with the present uses of such Leased Real Property, (v) Liens that (A) were not incurred in connection with indebtedness for borrowed money and (B) are not material to the Company and its Subsidiaries, taken as a whole, (vi) non-exclusive licenses of Intellectual Property entered into in the ordinary course of
12
business, (vii) Liens securing any Indebtedness of the Company and its Subsidiaries, (viii) any Lien that is disclosed on the Most Recent Balance Sheet or notes thereto (or securing liabilities reflected on such balance sheet), (ix) deemed to be created by this Agreement, any Transaction Agreement or any other document executed in connection herewith, (x) any Lien that will be released prior to the Closing, and (xi) any other Liens that would not reasonably be expected to, individually or in the aggregate, materially impair the continued use and operation of the assets to which they relate in the business of the Company and its Subsidiaries as presently conducted.
“Permitted Withdrawals” has the meaning given to it in the Existing SPAC Governing Document.
“Permitted Working Capital Loan” means one or more Working Capital Loans in an aggregate principal amount up to $1,500,000, which may be converted into up to an additional 150,000 Cayman SPAC Units, at the price of $10.00 per unit, prior to the Domestication.
“Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental agency or instrumentality or other entity of any kind.
“PersonalInformation” means information in the Company’s possession, custody, or control that constitutes “personal data,” “personal information,” “personally identifiable information,” or a similar term under applicable Privacy Laws.
“Personnel IP Agreements” has the meaning specified in Section 5.19(c).
“PIPE Investments” shall have the meaning set forth in Section 9.03.
“PIPE Subscription Agreements” shall have the meaning set forth in Section 9.03.
“Policies” has the meaning specified in Section 5.16.
“Premium Cap” has the meaning specified in Section 8.02(b).
“Prior Government Contracts” has the meaning specified in Section 5.12(a)(vi).
“Privacy Laws” means all applicable Laws regarding data privacy, data protection, or data security governing the receipt, collection, compilation, adaptation or alteration, retrieval, use, storage, processing, sharing, safeguarding, security (technical, administrative and physical), disposal, destruction, disclosure or transfer (including cross-border) whether or not by automated means (collectively, “Processing”, or “Processed”, as applicable) of Personal Information by or for the Company, including, but not limited to, to the extent applicable, the California Consumer Privacy Act as amended by the California Privacy Rights Act (CCPA), EU General Data Protection Regulation (GDPR), Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act, Telephone Consumer Protection Act (TCPA), and any and all applicable Laws governing (i) breach notification in connection with Personal Information, (ii) the use of biometric identifiers, or (iii) the use of Personal Information for marketing purposes.
“Privacy Requirements” has the meaning specified in Section 5.19(g).
“Proxy Clearance Date” has the meaning specified in Section 9.02(a).
“Proxy Statement” has the meaning specified in Section 9.02(a).
“Registered Intellectual Property” has the meaning specified in Section 5.19(a).
13
“Registration Statement” means the Registration Statement on Form S-4, or other appropriate form determined by the Parties, including any pre-effective or post-effective amendments or supplements thereto, to be filed with the SEC by SPAC under the Securities Act with respect to SPAC Common Stock to be issued in connection with the transactions contemplated by this Agreement.
“Regulatory Consent Authorities” means a Governmental Authority, including for the avoidance of doubt, the Antitrust Division of the United States Department of Justice or the United States Federal Trade Commission, as applicable, the UK Secretary of State, the Chancellor of the Duchy of Lancaster, the UK Investment Security Unit, and the Treasurer of the Commonwealth of Australia or their delegate.
“Representative” means, as to any Person, any of the officers, directors, managers, employees, counsel, accountants, financial or capital markets advisors, placement agents and consultants of such Person.
“Required Company Information” has the meaning specified in Section 7.05(a).
“Sanctioned Party” means any Person that is: (i) organized under the Laws of, ordinarily resident in, or located in a country or territory that is the subject of comprehensive Sanctions; (ii) designated on a sanctioned parties list administered by the United States, European Union, or United Kingdom, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List, Sectoral Sanctions Identification List, the Consolidated List of Persons, Groups, and Entities Subject to EU Financial Sanctions, and the UK’s Consolidated Sanctions List; or (iii) fifty percent (50%) or more owned or, where relevant under applicable Sanctions, controlled, individually or in the aggregate, by one or more Persons described in subparagraph (i) or (ii) of this clause.
“Sanctions” means applicable Laws pertaining to trade and economic sanctions administered by the United States, European Union, United Kingdom or other relevant jurisdiction.
“Schedules” means (i) the Company Disclosure Letter or (ii) the SPAC Disclosure Letter, as applicable.
“SEC” means the United States Securities and Exchange Commission.
“SEC Reports” has the meaning specified in Section 6.09(a).
“Second Certificate of Merger ” has the meaning specified in Section 2.02(b).
“Second Effective Time” has the meaning specified in Section 2.02(b).
“Second Merger” has the meaning specified in the Recitals.
“Securities Act” means the Securities Act of 1933, as amended.
“Securities Laws” means the securities Laws of any state, federal or foreign entity and the rules and regulations promulgated thereunder.
“Security Incident” has the meaning specified in Section 5.19(h).
“Software” means any and all computer programs and other software, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, and all documentation, including development, testing, diagnostic, support, user and training documentation, related to any of the foregoing.
14
“SPAC” has the meaning specified in the preamble hereto. For the avoidance of doubt, the term “SPAC” shall include from and after the Domestication and the Closing Infleqtion, Inc.
“SPAC Board Recommendation” has the meaning specified in the Recitals.
“SPAC Bylaws Upon Domestication” has the meaning specified in the Recitals.
“SPAC Charter Upon Domestication” has the meaning specified in the Recitals.
“SPAC Class A Ordinary Share” means the Class A ordinary shares, par value $0.0001 per share, of SPAC prior to the Domestication.
“SPAC Class B Ordinary Share” means the Class B ordinary shares, par value $0.0001 per share, of SPAC prior to the Domestication.
“SPAC Closing Statement” has the meaning specified in Section 4.02.
“SPAC Common Stock” means (i) prior to the Domestication, the Class A ordinary shares of SPAC, par value $0.0001 per share, and (ii) from and after the Domestication, the shares of common stock, par value $0.0001 per share, of SPAC.
“SPAC Cure Period” has the meaning specified in Section 11.01(c).
“SPAC Disclosure Letter” has the meaning specified in ARTICLE 6.
“SPAC Material Adverse Effect” means, with respect to SPAC, a material adverse effect on: (i) the ability of any SPAC Party to enter into this Agreement or any Transaction Agreement and perform its respective obligations thereunder or consummate the Transactions or (ii) the business, condition (financial or otherwise), assets, liabilities or operations of SPAC, provided, however, that none of the following, alone or in combination, shall be deemed to constitute or be taken into account in the determination of whether, there has been or will be a SPAC Material Adverse Effect under this clause (ii): (a) any change in applicable Laws or GAAP or any interpretation thereof, (b) any change in interest rates or economic, political, business, financial, commodity, currently or market conditions generally, (c) any actions taken or not taken by SPAC, or such other changes or events, in each case, which (I) the Company has consented in writing or (II) are required by this Agreement (provided that the exceptions in this clause (c) shall not be deemed to apply to references to “Material Adverse Effect” in the representations and warranties set forth in Section 6.03 and, to the extent related thereto, the condition in Section 10.03(a)) and (d) the announcement or the execution of this Agreement, the pendency or consummation of the Mergers or the performance of this Agreement (provided that the exceptions in this clause (d) shall not be deemed to apply to references to “SPAC Material Adverse Effect” in the representations and warranties set forth in Section 6.03 and, to the extent related thereto, the condition in Section 10.03(a)); provided that, in the case of clauses (a) and (b) such changes may be taken into account to the extent (but only to the extent) that such changes have had a disproportionate impact on SPAC, as compared to other competitors or comparable entities operating in the industries or markets in which SPAC operates.
“SPAC Organizational Documents” means, (i) prior to the Domestication, the Existing SPAC Governing Document, as amended and in effect on the date hereof, and (ii) following the Domestication and prior to the First Effective Time, the SPAC Charter Upon Domestication and SPAC Bylaws Upon Domestication.
“SPAC Parties” means SPAC and Merger Subs.
“SPAC Party Representations” means the representations and warranties of SPAC and Merger Subs expressly and specifically set forth in ARTICLE 6 of this Agreement, as qualified by the SPAC Disclosure Letter.
15
“SPAC Preferred Shares” means, prior to the Domestication, the preferred shares, par value $0.0001 per share, of SPAC.
“SPAC Restricted Stock Award” has the meaning specified in Section 3.03(c).
“SPAC Shares” means the SPAC Class A Ordinary Shares, SPAC Class B Ordinary Shares and the SPAC Preferred Shares.
“SPAC Specified Representations” has the meaning specified in Section 10.03(a)(i).
“SPAC Stockholder Matters” has the meaning specified in Section 9.02(a)
“SPAC Stockholder Redemption” has the meaning specified in Section 9.02(a).
“SPAC Stockholders” means (i) prior to the Domestication, the holders of SPAC Shares, and (ii) following the Domestication, the holders of shares of SPAC Common Stock.
“SPAC Transaction Expenses” means all fees, costs and expenses of SPAC incurred prior to and through the Closing Date in connection with the negotiation, preparation and execution of this Agreement, the other Transaction Agreements, the performance and compliance with all Transaction Agreements and covenants contained herein to be performed or complied with at or before Closing, and the consummation of the Transactions, including, subject to Section 12.05, any (i) fees, costs and expenses related to the D&O Tail, (ii) deferred underwriting fees, (iii) any amounts outstanding under any Working Capital Loans (excluding, for the avoidance of doubt, any Permitted Working Capital Loans that are converted into Cayman SPAC Units prior to the Closing), and (iv) fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of SPAC, to the extent unpaid prior to the Closing; provided, that any Excise Tax payable by SPAC shall expressly be excluded and shall not be deemed SPAC Transaction Expenses.
“Special Meeting” has the meaning specified in Section 9.02(e).
“Sponsor” means Churchill Sponsor X, LLC.
“Sponsor Agreement” means that certain Amended and Restated Letter Agreement, dated as of the date hereof, by and among Sponsor, SPAC and the other parties thereto, as amended, restated, modified or supplemented from time to time.
“SponsorGroup” has the meaning specified in Section 12.17(a).
“Sponsor Share Conversion” has the meaning specified in the Recitals.
“Standard Employment Agreements” has the meaning specified in Section 5.13(a).
“Stock Exchange” means the Nasdaq or such other stock exchange as the Company and SPAC may mutually agree prior to the Closing.
“Stockholder Action” has the meaning specified in Section 9.08.
“Stockholder Action Expenses” has the meaning specified in Section 9.08.
“Subsidiary” means, with respect to a Person, any corporation or other organization (including a limited liability company, exempted company, partnership or such other entity), whether incorporated or unincorporated, of which such Person directly or indirectly owns or controls a majority of the securities or other interests having
16
by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization or any organization of which such Person or any of its Subsidiaries is, directly or indirectly, a general partner or managing member.
“Surviving Corporation” has the meaning specified in the Recitals.
“Surviving Entity” has the meaning specified in the Recitals.
“Surviving Provisions” has the meaning specified in Section 11.02.
“Tax” or “Taxes” means (i) any and all federal, state, provincial, territorial, local, non-U.S. and other net income tax, alternative or add-on minimum tax, franchise tax, gross income, adjusted gross income or gross receipts tax, employment related tax (including employee withholding or employer payroll tax) ad valorem, transfer, franchise, license, excise, severance, stamp, occupation, premium, personal property, real property, capital stock, profits, disability, registration, value added, estimated, customs duties, and sales or use tax, or other tax or like assessment in the nature of a tax (whether payable directly or by withholding), in each case that is imposed by a Governmental Authority; (ii) any interest, penalties, addition to tax or additional amounts relating to any items in clause (i) or this clause (ii); and (iii) any liability for any items described in clauses (i) and (ii) of this definition payable by reason of Contract, assumption, transferee or successor liability, operation of applicable Law, or Treasury Regulations Section 1.1502-6(a) (or any similar provision of Law or any predecessor or successor thereof) or otherwise.
“Tax Return” means any return, report, statement, refund, claim, declaration, information return, statement, estimate or other document filed or required to be filed with a Governmental Authority in respect of Taxes, including any schedule or attachment thereto and including any amendments thereof.
“Technology” means, collectively, all Software, formulae, algorithms, procedures, methods, techniques, technical data, programs, subroutines, tools, materials, processes, apparatus, creations, and other similar materials, and all recordings, graphs, reports, analyses, and other writings, and other tangible embodiments of the foregoing or of Intellectual Property, in any form whether or not specifically listed herein.
“Terminating Company Breach” has the meaning specified in Section 11.01(b).
“Terminating SPAC Breach” has the meaning specified in Section 11.01(c).
“Termination Date” has the meaning specified in Section 11.01(b).
“Transaction Agreements” means this Agreement, the Sponsor Agreement, the A&R Registration Rights Agreement, the Company Voting and Support Agreements, the SPAC Charter Upon Domestication, the SPAC Bylaws Upon Domestication, the Advisory Agreement and all of the agreements, documents, instruments and certificates entered into in connection herewith or therewith and any and all exhibits and schedules thereto.
“Transactions” means the transactions contemplated by this Agreement, the Transaction Agreements and the PIPE Investments, including the Mergers and the Conversions.
“TreasuryRegulations” means the regulations promulgated under the Code.
“Trust Account” has the meaning specified in Section 6.07(a).
“Trust Agreement” has the meaning specified in Section 6.07(a).
“Trustee” has the meaning specified in Section 6.07(a).
17
“Unaudited Financial Statements” has the meaning specified in Section 5.08(a).
“Uniform Antitrust Pre-Merger Notification Act” means the Colorado Senate Bill 25-126, the Uniform Antitrust Pre-Merger Notification Act signed into law on June 4, 2025.
“WARN Act” has the meaning specified in Section 5.14(c).
“Warrant Agreement” means the Warrant Agreement, dated as May 13, 2025, by and between SPAC and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent.
“Willkie” has the meaning specified in Section 12.17(a).
“Working Capital Loan” means any loan made to SPAC by any of Sponsor or any of SPAC’s officers or directors, and evidenced by a promissory note, for the purpose of financing SPAC Transaction Expenses.
“WrittenConsent” has the meaning specified in Section 9.02(f).
“Written Consent Failure” has the meaning specified in Section 9.02(f).
Section 1.02. Construction.
(a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement, and the term “date hereof” refers to the date of the execution of this Agreement, (iv) the terms “Article”, “Section”, “Schedule”, “Exhibit” and “Annex” refer to the specified Article, Section, Schedule, Exhibit or Annex of or to this Agreement unless otherwise specified, (v) the word “including” shall mean “including without limitation,” (vi) the word “or” shall be disjunctive but not exclusive, and (vii) the phrase “to the extent” means the degree to which a thing extends (rather than if).
(b) When used herein, “ordinary course of business” means an action taken, or omitted to be taken, in the ordinary and usual course of the Company’s and its Subsidiaries’ business, consistent with past practice.
(c) Unless the context of this Agreement otherwise requires, references to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto.
(d) Unless the context of this Agreement otherwise requires, references to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation.
(e) The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent and no rule of strict construction shall be applied against any Party.
(f) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.
(g) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.
(h) The phrases “provided to,” “furnished to,” “made available” and phrases of similar import when used herein, unless the context otherwise requires, means that a copy of the information or material referred to has
18
been provided no later than 6:00 p.m. (New York Time) on the day immediately prior to the date of this Agreement to the Party to which such information or material is to be provided or furnished (i) in the virtual “data room” set up by the Company in connection with this Agreement or (ii) by delivery to such Party or its legal counsel via electronic mail or hard copy form.
Section 1.03. Knowledge. As used herein, the phrase “to the knowledge” shall mean the actual knowledge of, in the case of the Company, the individuals set forth on Schedule 1.03 of the Company Disclosure Letter (and, solely with respect to knowledge of matters related to the individuals set forth on Schedule 1.03 of the Company Disclosure Letter, as of the date of this Agreement only) and, in the case of the SPAC Parties, the individuals set for on Schedule 1.03 of the SPAC Disclosure Letter.
Section 1.04. Equitable Adjustments. If, following the date of this Agreement, the outstanding Company Stock or shares of SPAC Common Stock shall have been changed into a different number of shares or a different class, by reason of any stock or share dividend, subdivision, reclassification, reorganization, recapitalization, split, combination or exchange of shares, or any similar event shall have occurred, or if there shall have been any breach by SPAC with respect to its covenant not to issue shares of SPAC Common Stock or rights to acquire SPAC Common Stock under Section 8.03(a), then any number, value (including dollar value) or amount contained herein which is based upon the number of shares of Company Stock or shares of SPAC Common Stock, as applicable, will be appropriately adjusted to provide to the holders of Company Stock or SPAC Stockholders, as applicable, the same economic effect as contemplated by this Agreement prior to such event; provided, however, that this Section 1.04 shall not be construed to permit SPAC, the Company or Merger Subs to take any action with respect to their respective securities that is prohibited by the terms and conditions of this Agreement.
ARTICLE 2
THE MERGERS
Section 2.01. The Mergers.
(a) Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the First Effective Time, Merger Sub I shall be merged with and into the Company, whereupon the separate corporate existence of Merger Sub I shall cease and the Company shall continue as the Surviving Corporation and a direct wholly-owned Subsidiary of SPAC. The First Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL.
(b) Immediately following the First Effective Time, upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL and the DLLCA, the Surviving Corporation shall be merged with and into Merger Sub II, whereupon the separate corporate existence of the Surviving Corporation shall cease and Merger Sub II shall continue as the Surviving Entity and a direct wholly-owned Subsidiary of SPAC. The Second Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL and the DLLCA.
Section 2.02. First Effective Time; Second Effective Time.
(a) Subject to the terms and conditions of this Agreement, on the Closing Date, the Parties shall cause the First Merger to be consummated by filing a certificate of merger in substantially the form attached as Exhibit G (the “First Certificate of Merger”) with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL. The First Merger shall become effective at such time as the First Certificate of Merger is filed with the Secretary of State of the State of Delaware (or at such later time as may be agreed by the Company and SPAC and specified in the First Certificate of Merger) (the “First Effective Time”).
(b) Immediately following the First Effective Time, the Parties shall cause the Second Merger to be consummated by filing a certificate of merger in substantially the form attached as Exhibit H (the “Second
19
Certificate of Merger”) with the Secretary of State of the State of Delaware in accordance with Section 18-209 of the DLLCA and Section 251 of the DGCL. The Second Merger shall become effective at such time as the Second Certificate of Merger is filed with the Secretary of State of the State of Delaware (or at such later time as may be agreed by the Company and SPAC and specified in the Second Certificate of Merger) (the “Second Effective Time”).
Section 2.03. Effect of the Mergers. At the First Effective Time, the effects of the First Merger, and at the Second Effective Time, the effects of the Second Merger, shall be as provided in this Agreement, the First Certificate of Merger, the Second Certificate of Merger, and the applicable provisions of the DGCL and DLLCA. Without limiting the generality of the foregoing, and subject thereto: (i) at the First Effective Time, all of the property, rights, privileges, powers and franchises of the Company and Merger Sub I shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub I shall become the debts, liabilities and duties of the Surviving Corporation; and (ii) at the Second Effective Time, all of the property, rights, privileges, powers and franchises of the Surviving Corporation and Merger Sub II shall vest in the Surviving Entity, and all debts, liabilities and duties of the Surviving Corporation and Merger Sub II shall become the debts, liabilities and duties of the Surviving Entity.
Section 2.04. Governing Documents.
(a) At the First Effective Time, the certificate of incorporation of the Company in effect as of immediately prior to the First Effective Time shall be amended and restated in the form attached hereto as Exhibit I, and, as so amended and restated, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended or modified in accordance with its terms and the DGCL.
(b) At the First Effective Time, the bylaws of the Company in effect as of immediately prior to the First Effective Time shall be amended and restated to conform to the bylaws of Merger Sub I, and, as so amended and restated, shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with applicable Law.
(c) At the Second Effective Time, the limited liability company agreement of Merger Sub II as in effect immediately prior to the Second Effective Time shall be amended and restated in the form attached hereto as Exhibit J, and, as so amended and restated, shall be the limited liability company agreement of the Surviving Entity until thereafter amended or modified in accordance with its terms and the DLLCA.
Section 2.05. Officers of the Surviving Entity.
(a) Prior to the First Effective Time, each of SPAC and Merger Subs shall cause the individuals identified in writing by the Company prior to the Closing to be designated or appointed as the directors and officers of Merger Sub I and Merger Sub II, as applicable, effective as of immediately prior to the First Effective Time. Immediately after the Second Effective Time, the officers of the Surviving Entity shall be the officers of Merger Sub II immediately prior to the First Effective Time.
(b) The Parties shall use reasonable best efforts to cause the individuals nominated for election in the Registration Statement in accordance with Section 8.09 to comprise the board of directors of SPAC immediately following the First Effective Time, each to hold office in accordance with the DGCL, the SPAC Charter Upon Domestication and the SPAC Bylaws Upon Domestication and until their respective successors are duly elected or appointed and qualified.
Section 2.06. Further Assurances. If, at any time after the First Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Entity following the Mergers with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company and Merger Subs, the applicable directors and officers of the Company and Merger Subs (or their designees) are fully authorized in the name of their respective corporations/companies or otherwise to take, and will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.
20
ARTICLE 3
MERGER CONSIDERATION; CONVERSION OF SECURITIES
Section 3.01. Conversion of Company Preferred Stock. The Company shall take all actions necessary or appropriate so that, immediately prior to the Closing, all of the Company Preferred Stock (including, for the avoidance of doubt, Company Restricted Stock Awards in respect of Company Preferred Stock) shall be converted into Company Common Stock in accordance with the terms of the Company Certificate of Incorporation (the “Conversions”). All of the Company Preferred Stock converted into Company Common Stock shall no longer be outstanding, shall be deemed cancelled and terminated, as applicable, and each holder of Company Preferred Stock shall thereafter cease to have any rights with respect to such Company Preferred Stock.
Section 3.02. Effect of Mergers on Company Common Stock. On the terms and subject to the conditions set forth herein, at the First Effective Time, by virtue of the First Merger and without any further action on the part of any Party, any Holder or SPAC Stockholder, the following shall occur:
(a) On the terms and subject to the conditions set forth in this Agreement, each share of Company Common Stock issued and outstanding immediately prior to the First Effective Time after giving effect to the Conversions will be automatically surrendered and shall cease to exist, and be exchanged for the right to receive a number of shares of SPAC Common Stock equal to the Exchange Ratio. From and after the First Effective Time, such Person that, immediately prior to the First Effective Time, was registered as a holder of the Company Common Stock (other than Excluded Shares and Dissenting Shares, and after giving effect to the Conversions described in Section 3.01) in the share transfer books of the Company shall thereafter cease to be a stockholder of the Company and only have the right to receive the Per Share Merger Consideration in accordance with the terms of this Agreement. At the First Effective Time, the share transfer books of the Company shall be closed, and no transfer of Company Common Stock shall be made thereafter.
(b) Each issued and outstanding share of common stock of Merger Sub I shall be converted into and become one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. From and after the First Effective Time, all certificates and book-entry notations representing the common stock of Merger Sub I shall be deemed for all purposes to represent the number of common shares of the Surviving Corporation into which they were converted in accordance with the immediately preceding sentence.
(c) Each share of Company Stock held in the Company’s treasury or owned by SPAC, Merger Sub I or the Company immediately prior to the First Effective Time (each, an “Excluded Share”) shall automatically be cancelled and surrendered (as applicable) and no consideration shall be paid or payable with respect thereto.
(d) At the Second Effective Time, by virtue of the Second Merger and without any further action on the part of any holder thereof, (i) each share of common stock of the Surviving Corporation shall be canceled and retired and no consideration shall be paid with respect thereto, and (ii) each membership interest of Merger Sub II outstanding immediately prior to the Second Effective Time shall remain outstanding and shall constitute all of the membership interests of the Surviving Entity.
Section 3.03. Treatment of Equity Awards.
(a) Company Stock Plans. At the First Effective Time, by virtue of the First Merger and without any further action on the part of any Party, the 2017 Plan shall be assumed by SPAC. All Exchanged Options will continue to remain governed by and subject to the terms and conditions of the assumed 2017 Plan.
(b) Company Options. At the First Effective Time, each Company Option that is outstanding and unexercised immediately prior to the First Effective Time shall, by virtue of the Mergers and without any further action on the part of any Party or the holder thereof, whether such Company Option is vested or unvested, be assumed and converted into an option to purchase a number of shares of SPAC Common Stock, on the same
21
terms and conditions (including applicable vesting, exercise, termination, and expiration provisions) as are in effect with respect to each such Company Option immediately prior to the First Effective Time (each, an “Exchanged Option”); provided, that each Exchanged Option will represent the right to acquire the whole number of shares of SPAC Common Stock, subject to such Exchanged Option (with any fractional share otherwise resulting rounded down to the nearest whole share) equal the product of (x) the number of shares of Company Common Stock that were subject to such Company Option immediately prior to the First Effective Time, multipliedby (y) the Exchange Ratio, and such Exchanged Option’s per-share exercise price shall equal the quotient of (1) the exercise price per share of Company Common Stock (with any fractional cent otherwise resulting rounded up to the nearest whole cent) at which such Company Option was exercisable immediately prior to the First Effective Time, divided by (2) the Exchange Ratio; provided, that each Company Option (A) which is an “incentive stock option” (as defined in Section 422 of the Code) shall be adjusted in accordance with the requirements of Section 424 of the Code and (B) shall be adjusted in a manner that complies with or is exempt from Section 409A of the Code, and any ambiguities or ambiguous terms herein will be interpreted to so comply or be exempt.
(c) Company Restricted Stock Awards. At the First Effective Time, each Company Restricted Stock Award that is outstanding immediately prior to the First Effective Time shall, by virtue of the Mergers and without any further action on the part of any Party or the holder thereof, be converted into the right to receive a number of shares of restricted shares of SPAC Common Stock (each, a “SPAC Restricted Stock Award”) equal to the product of (i) the number of shares of Company Common Stock subject to such Company Restricted Stock Award immediately prior to the First Effective Time (after giving effect to the Conversions) and (ii) the Exchange Ratio (with any fractional shares rounded up or down to the nearest whole share of SPAC Common Stock (with 0.5 of a share or greater rounded up), as applicable) and such SPAC Restricted Stock Award will otherwise be subject to substantially the same terms and conditions as were applicable to such Company Restricted Stock Award immediately prior to the First Effective Time (including with respect to vesting and termination-related provisions).
(d) Company Action. The Company shall take all reasonably necessary actions to effect the treatment of the Company Options pursuant to Section 3.03(b) and the Company Restricted Stock Awards pursuant to Section 3.03(c) in accordance with the 2017 Plan and the applicable award agreements. Prior to the First Effective Time, the Company shall adopt any resolutions and take any actions which are necessary to cause the 2017 Plan to be amended to provide that no additional or new grants shall be made under the 2017 Plan following the Closing.
Section 3.04. Dissenting Shares. Notwithstanding anything to the contrary contained in this Agreement, and to the extent available under the DGCL or the Company Certificate of Incorporation, as applicable, shares of Company Stock that are issued and outstanding immediately prior to the First Effective Time and that are held by stockholders of record or owned by beneficial owners who either shall have neither voted in favor of the Mergers nor consented thereto in writing and who shall have demanded properly in writing appraisal or dissenters’ rights for such Company Stock in accordance with Section 262 of the DGCL, or who shall have validly exercised a redemption right for such Company Stock under the Company Certificate of Incorporation (the shares of Company Stock that are the subject to such demand or exercise of redemption rights, collectively, the “Dissenting Shares”; record holders and beneficial owners of Dissenting Shares being referred to as “Dissenting Stockholders”), and, with respect to appraisal or dissenters’ claims, otherwise complied with all of the provisions of the DGCL relevant to the exercise and perfection of appraisal rights, shall not be converted into, and such Dissenting Stockholders shall have no right to receive, the applicable Per Share Merger Consideration as provided in Section 3.02(a) unless and until such Dissenting Stockholder fails to perfect or waives, withdraws or otherwise loses his, her or its right to appraisal and payment under the DGCL, or waives, withdraws or otherwise loses his, her or its right to redemption under the Company Certificate of Incorporation, with respect to such Company Stock, as applicable. Notwithstanding the foregoing, if any such person shall fail to perfect or otherwise shall waive, withdraw or lose the right to dissent under Section 262 of the DGCL or shall waive, withdraw or otherwise lose the right to redemption under the Company Certificate of Incorporation, as
22
applicable, such Person’s Dissenting Shares shall thereupon be deemed to have been converted into, and to have become exchangeable for, as of the First Effective Time, the right to receive the applicable Per Share Merger Consideration, without any interest thereon, upon surrender, if applicable, in the manner provided in Section 3.02(a), without interest or any other payments. The Company shall serve prompt notice to SPAC of any notices of objection, notices of dissent or demands for fair value under Section 262 of the DGCL of any of the Company Stock or demands for redemption under the Company Certificate of Incorporation, as applicable, attempted withdrawals of such notices or demands and any other instruments served pursuant to the DGCL or otherwise and received by the Company, and SPAC shall have the right to participate in all negotiations and proceedings with respect to such notices and demands. The Company shall not, without the prior written consent of SPAC (which consent shall not be unreasonably withheld, conditioned or delayed), or as otherwise required under the DGCL, make any payment with respect to, or settle or offer to settle, any such notices or demands, or agree to do or commit to do any of the foregoing.
Section 3.05. Exchange Pool.
(a) Immediately prior to or at the First Effective Time, SPAC shall deposit, or cause to be deposited, with Continental Stock Transfer & Trust Company (the “Exchange Agent”) evidence in book-entry form of shares of SPAC Common Stock, representing the number of shares of SPAC Common Stock sufficient to deliver the Merger Consideration (the “Exchange Pool”).
(b) Notwithstanding anything to the contrary contained herein, no fraction of a share of SPAC Common Stock will be issued by virtue of this Agreement or the Transactions, and each Holder who would otherwise be entitled to a fraction of a share of either such class (after aggregating all shares of SPAC Common Stock to which such Holder otherwise would be entitled) shall instead have the number of shares of SPAC Common Stock issued to such Holder rounded up or down to the nearest whole share of SPAC Common Stock (with 0.5 of a share or greater rounded up), as applicable.
(c) Promptly following the earlier of (i) the date on which the entire Exchange Pool has been disbursed and (ii) the date which is six (6) months after the First Effective Time, SPAC shall instruct the Exchange Agent to deliver to SPAC any remaining portion of the Exchange Pool and other documents in its possession relating to the Transactions, and the Exchange Agent’s duties shall terminate. Thereafter, each Holder may look only to SPAC (subject to applicable abandoned property, escheat or other similar Laws), as general creditors thereof, for satisfaction of such Holder’s claim for Merger Consideration that such Holder may have the right to receive pursuant to Section 3.02 without any interest thereon.
(d) None of the Company, SPAC, the Surviving Corporation, the Surviving Entity or the Exchange Agent shall be liable to any Person for any portion of the Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. Notwithstanding any other provision of this Agreement, any portion of the Merger Consideration that remains undistributed to the Holders as of immediately prior to the date on which the Merger Consideration would otherwise escheat to or become the property of any Governmental Authority shall, to the extent permitted by applicable Law, become the property of SPAC, free and clear of all claims or interest of any Person previously entitled thereto.
Section 3.06. Withholding Rights. Notwithstanding anything in this Agreement to the contrary, SPAC, Merger Sub I, Merger Sub II, the Company, the Surviving Corporation, the Surviving Entity and their respective Affiliates shall be entitled to deduct and withhold from amounts otherwise payable pursuant to this Agreement any amount required to be deducted and withheld with respect to the making of such payment under applicable Law; provided, however, that if SPAC, Merger Sub I, Merger Sub II, any of their respective Affiliates, or any party acting on their behalf determines that any payment hereunder is subject to deduction and/or withholding, then SPAC shall, prior to so deducting and/or withholding, (a) provide written notice to the Company as soon as reasonably practicable after such determination and (b) consult and cooperate with the Company in good faith to reduce or eliminate any such deduction or withholding to the extent permitted by applicable Law. To the extent
23
that amounts are so withheld and paid over to the appropriate Governmental Authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. Any amounts so withheld shall be timely remitted to the applicable Governmental Authority.
Section 3.07. Legend. Each certificate or book entry position representing the shares of SPAC Common Stock issued pursuant to the right to receive Per Share Merger Consideration shall bear the legend set forth below, or legend substantially equivalent thereto, together with any other legends that may be required by any securities laws at the time of the issuance:
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE ISSUER’S BYLAWS. A COPY OF SUCH BYLAWS WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
ARTICLE 4
CLOSING; CLOSING STATEMENT
Section 4.01. Closing. On the terms and subject to the conditions set forth in this Agreement, the closing of the Transactions (the “Closing”) shall take place (a) electronically by the mutual exchange of electronic signatures (including portable document format (.PDF)) commencing as promptly as practicable (and in any event no later than 10:00 a.m. Eastern Time on the third (3rd) Business Day) following the satisfaction or (to the extent permitted by applicable Law) waiver of the conditions set forth in ARTICLE 10 (other than those conditions that by their terms or nature are to be satisfied at the Closing; provided that such conditions are satisfied or (to the extent permitted by applicable Law) waived at the Closing) or (b) at such other place, time or date as SPAC and the Company may mutually agree in writing. The date on which the Closing shall occur is referred to herein as the “Closing Date.”
Section 4.02. SPAC ClosingStatement. At least two (2) Business Days prior to the Special Meeting, and in any event not earlier than following the time that holders of SPAC Common Stock may no longer elect redemption in accordance with the SPAC Stockholder Redemption, SPAC shall prepare and deliver to the Company a statement (the “SPAC Closing Statement”) setting forth in good faith: (a) an estimate of the aggregate amount of cash in the Trust Account (prior to giving effect to the SPAC Stockholder Redemption); (b) an estimate of the aggregate amount of all payments required to be made in connection with the SPAC Stockholder Redemption; (c) an estimate of the Available Closing SPAC Cash resulting therefrom; (d) the aggregate number of shares of SPAC Common Stock tendered for redemption pursuant to the SPAC Stockholder Redemption and the number of shares of SPAC Common Stock to be outstanding as of immediately prior to the Closing after giving effect to the SPAC Stockholder Redemption and the Domestication; and (e) the number of SPAC Common Stock to be issued pursuant to the PIPE Subscription Agreements, if any, in each case, including reasonable supporting detail therefor. The SPAC Closing Statement and each component thereof shall be prepared and calculated in accordance with the definitions contained in this Agreement. From and after delivery of the SPAC Closing Statement until the Closing, SPAC shall (x) cooperate with and provide the Company and its Representatives all information reasonably requested by the Company or any of its Representatives and within SPAC’s or its Representatives’ possession or control in connection with the Company’s review of the SPAC Closing Statement and (y) consider in good faith any comments to the SPAC Closing Statement provided by the Company and its Representatives, which comments the Company shall deliver to SPAC no less than two (2) Business Days prior to the Closing Date, and SPAC shall revise such SPAC Closing Statement to incorporate any changes SPAC reasonably determines are necessary or appropriate given such comments. At least two (2) Business Days prior to the Closing Date, SPAC shall prepare and deliver to the Company (i) a statement setting forth in good faith as of the Closing Date SPAC’s calculation of the SPAC Transaction Expenses, including reasonable supporting detail therefor, and (ii) an updated SPAC Closing Statement to update, as needed, the calculation of: (a) the aggregate amount of cash in the Trust Account (prior to giving effect to the SPAC Stockholder Redemption); (b) the aggregate amount of all payments required to be made in connection with the SPAC Stockholder Redemption; and (c) the Available Closing SPAC Cash resulting therefrom.
24
Section 4.03. Company Closing Statement. At least five (5) Business Days prior to the Closing Date, the Company shall prepare and deliver to SPAC a statement (the “Company Closing Statement”) setting forth in good faith as of the Closing Date: (a) the aggregate number of shares of Company Common Stock issued and outstanding (including, for the avoidance of doubt, shares subject to any Company Restricted Stock Award); (b) the aggregate number of shares of Company Preferred Stock (by series) issued and outstanding (in the case of (a) and (b), prior to giving effect to the Conversions of Company Preferred Stock); (c) the aggregate number of shares of Company Common Stock to be outstanding after giving effect to the Conversions set forth under Section 3.01; (d) the aggregate number of shares of Company Common Stock underlying vested and unvested Company Options issued and outstanding and the exercise prices therefor; (e) the aggregate number of shares subject to any Company Restricted Stock Award issued and outstanding; (f) the Company’s calculation of the Company Transaction Expenses; (g) the Company’s calculation of the Per Share Equity Value; and (h) the Company’s calculation of the Exchange Ratio, in each case, including reasonable supporting detail therefor. From and after delivery of the Company Closing Statement until the Closing, the Company shall (x) cooperate with and provide SPAC and its Representatives all information reasonably requested by SPAC or any of its Representatives and within the Company’s or its Representatives’ possession or control in connection with SPAC’s review of the Company Closing Statement and (y) consider in good faith any comments to the Company Closing Statement provided by SPAC and its Representatives, which comments SPAC shall deliver to the Company no less than two (2) Business Days prior to the Closing Date, and the Company shall revise such Company Closing Statement to incorporate any changes the Company reasonably determines are necessary or appropriate given such comments and as otherwise determined by the Company.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter dated as of the date of this Agreement delivered by the Company to SPAC (the “CompanyDisclosure Letter”) (each section or subsection of which qualifies (a) the correspondingly numbered representation, warranty or covenant if specified therein and (b) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is reasonably apparent), the Company represents and warrants to SPAC as of the date hereof and as of the Closing as follows:
Section 5.01. Corporate Organization of the Company. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and has the requisite power and authority to own, operate and lease its properties and assets and to conduct its business as it is now being conducted, except as would not be material to the Company. The Company Certificate of Incorporation, as in effect on the date hereof, previously made available by the Company to SPAC (a) is true, correct and complete, (b) is in full force and effect, and (c) has not been amended. The Company is duly licensed or qualified and in good standing (or its equivalent) as a foreign entity in each jurisdiction in which the ownership of its property or the character of its activities is such as to require it to be so licensed or qualified, except where failure to be so licensed or qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company is not in violation of any of the provisions of the Company Certificate of Incorporation.
Section 5.02. Subsidiaries. The Subsidiaries of the Company as of the date of this Agreement are set forth on Schedule 5.02 to the Company Disclosure Letter. The Subsidiaries have been duly formed or organized, are validly existing under the laws of their jurisdiction of incorporation or organization and have the power and authority to own, operate and lease their properties, rights and assets and to conduct their business as it is now being conducted, except as would not be material to the Company and its Subsidiaries, taken as a whole. Each Subsidiary is duly licensed or qualified and in good standing (or its equivalent, to the extent an equivalent exists in the applicable jurisdiction) as a foreign or extra-provincial corporation (or other entity, if applicable) in each jurisdiction in which its ownership of property or the character of its activities is such as to require it to be in good standing or so licensed or qualified, except where the failure to be in good standing or so licensed or
25
qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The respective jurisdiction of incorporation or organization of each Subsidiaries is identified on Schedule 5.02 of the Company Disclosure Letter.
Section 5.03. Due Authorization. The Company has the requisite power and authority to execute and deliver this Agreement and each Transaction Agreement to which it is a party and (subject to the approvals described in Section 5.05), subject to obtaining the Company Stockholder Approval, to perform all obligations to be performed by it hereunder and thereunder and to consummate the Transactions. The Holders who have executed the Company Voting and Support Agreements as of the date hereof have agreed to vote in favor of the approval of this Agreement and the Transactions, including the Mergers, and such approval will be sufficient to duly obtain the Company Stockholder Approval. Other than the Company Stockholder Approval, no other corporate proceeding on the part of the Company is necessary to authorize this Agreement or such Transaction Agreements or the Company’s performance hereunder or thereunder. This Agreement has been, and each such Transaction Agreement (when executed and delivered by the Company) will be, duly and validly executed and delivered by the Company and, assuming due and valid authorization, execution and delivery by each other party hereto and thereto, this Agreement constitutes, and each such Transaction Agreement will constitute, a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting or relating to creditors’ rights generally and subject, as to enforceability, to the remedy of specific performance and injunctive and other forms of equitable relief which may be subject to equitable defenses, general principles of equity and to the discretion of the court before which any proceeding therefor may be brought, whether such enforceability is considered in a proceeding in equity or at Law (the “Enforceability Exceptions”).
Section 5.04. No Conflict. Subject to the receipt of the consents, approvals, authorizations and other requirements set forth in Section 5.05 and upon receipt of the Company Stockholder Approval, the execution, delivery and performance of this Agreement and each Transaction Agreement to which it is party by the Company and the consummation of the Transactions do not and will not (a) conflict with or violate any provision of, or result in the breach of or default under, the Company Certificate of Incorporation or the Company’s bylaws, (b) violate any provision of, or result in the breach of or default by the Company under, or require any filing, registration or qualification under, any applicable Law to which the Company is subject or by which any property or asset of the Company is bound, (c) require any consent, waiver or other action by any Person under, violate, or result in a breach of, constitute a default under, result in the acceleration, cancellation, termination or modification of, or create in any party the right to accelerate, terminate, cancel or modify, the terms, conditions or provisions of any Material Contract, including to any payment, posting of collateral (or right to require the posting of collateral), time of payment, vesting or increase in the amount of any compensation or benefit payable pursuant to the terms, conditions or provisions of any such Material Contract, (d) result in the creation of any Lien upon any of the properties, rights or assets of the Company or any of its Subsidiaries under any Material Contract, other than Permitted Liens, (e) constitute an event which, after notice or lapse of time or both, would result in any such violation, breach, termination, acceleration, modification, cancellation or creation of a Lien other than Permitted Liens, or (f) result in a violation or revocation of any license, permit or approval from any Governmental Authority, except, in each of cases (a) through (f), for such violations, conflicts, breaches, defaults or failures to act that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 5.05. GovernmentalAuthorities; Consents. Assuming the truth and completeness of the representations and warranties of the SPAC Parties contained in this Agreement, no action by, notice to, consent, approval, waiver, permit or authorization of, or designation, declaration or filing with, any Governmental Authority is required on the part of the Company with respect to the Company’s execution, delivery and performance of this Agreement and the Transaction Agreements to which the Company is a party and the consummation of the Transactions, except for (a) applicable requirements of the HSR Act and any Antitrust Laws and National Security Laws, (b) compliance with any applicable requirements of the Securities Laws, (c) the filing of the First Certificate of Merger in accordance with the DGCL, (d) the filing of the Second
26
Certificate of Merger in accordance with the DGCL and the DLLCA, (e) any actions, consents, approvals, permits or authorizations, designations, declarations or filings, the absence of which would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of the Company to perform or comply with on a timely basis any material obligation under this Agreement or to consummate the Transactions in accordance with the terms hereof, and (f) as otherwise disclosed on Schedule 5.05 of the Company Disclosure Letter.
Section 5.06. Current Capitalization.
(a) As of the date hereof, the authorized capital stock of the Company consists of: (i) 573,000,000 shares of Company Common Stock; and (ii) 383,910,610 shares of Company Preferred Stock, of which (A) 101,515,976 shares are designated as Company Series A Preferred Stock; (B) 113,956,319 shares are designated as Company Series B Preferred Stock; (C) 32,419,574 shares are designated as Company Series B-1 Preferred Stock; (D) 60,777,953 shares are designated as Company Series C Preferred Stock; (E) 22,869,771 shares are designated as Company Series C-1 Preferred Stock; (F) 24,871,033 shares are designated as Company Series Seed Preferred Stock; and (G) 27,499,984 shares are designated as Company Series Seed II Preferred Stock.
(b) As of the date of this Agreement (the “Capitalization Date”), there were: (i) 49,378,073 shares of Company Common Stock issued and outstanding (of which 2,634,548 are shares subject to a Company Restricted Stock Award); (ii) 101,515,976 shares of Company Series A Preferred Stock issued and outstanding; (iii) 113,956,319 shares of Company Series B Preferred Stock issued and outstanding (of which 1,459,315 are shares subject to a Company Restricted Stock Award); (iv) 32,419,574 shares of Company Series B-1 Preferred Stock issued and outstanding; (v) 60,399,952 shares of Company Series C Preferred Stock are issued and outstanding; (vi) 22,869,771 shares of Company Series C-1 Preferred Stock are issued and outstanding; (vii) 24,871,033 of Company Series Seed Preferred Stock issued and outstanding; and (viii) 27,499,984 shares of Company Series Seed II Preferred Stock issued and outstanding. All of the issued and outstanding shares of Company Stock have been duly authorized and validly issued and are fully paid and nonassessable.
(c) As of the Capitalization Date, there were outstanding (i) Company Options to purchase an aggregate 91,551,968 shares of Company Common Stock (of which options to purchase an aggregate of 63,438,720 shares of Company Common Stock were vested and exercisable and of which options to purchase an aggregate of 28,113,248 shares of Company Common Stock were unvested), and (ii) 42,426,022 additional shares of Company Common Stock were reserved for issuance pursuant to the 2017 Plan.
(d) As of the Capitalization Date, there were no outstanding Company Convertible Securities nor any obligations to issue any Company Convertible Securities.
(e) As of the Capitalization Date, other than the rights of (i) Company Options, (ii) Company Preferred Stock, and (iii) the Company Restricted Stock Awards, in each case outstanding as of the Capitalization Date, to convert into or be exchanged or exercised for Company Stock in accordance with the terms thereof in existence as of the Capitalization Date, there are (x) no subscriptions, calls, options, warrants, rights (including preemptive rights), puts or other securities convertible into or exchangeable or exercisable for Company Common Stock, Company Preferred Stock or any other equity interests of the Company, or any other Contracts to which the Company is a party or by which the Company is bound obligating the Company to issue or sell any shares of, other equity interests in or debt securities of, the Company, (y) no obligations incurred by the Company to issue additional shares of capital stock or equity interests of the Company under the Company Stockholder Agreements and (z) no equity equivalents, stock or stock appreciation rights, phantom stock or stock ownership interests or similar rights in the Company. As of the Capitalization Date, except as set forth on Schedule 5.06(e)(i) of the Company Disclosure Letter, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any securities or equity interests of the Company and, as of the date hereof, no holders of Company Stock have any redemption rights that are exercisable under the Company Stockholder Agreements. There are no outstanding bonds, debentures, notes or other Indebtedness of the Company having the
27
right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which the Company’s stockholders may vote. Other than the Company Stockholder Agreements, the Company Voting and Support Agreements, and as set forth on Schedule 5.06(e)(ii) of the Company Disclosure Letter the Company is not party to any stockholders agreement, voting agreement, proxies, registration rights agreement or other similar agreements relating to its equity interests.
Section 5.07. Capitalization of Subsidiaries. The issued share capital, stock or other equity interests of each of the Company’s Subsidiaries have been duly authorized and validly issued and are fully paid and nonassessable. All of the ownership interests in each Subsidiary of the Company are owned by the Company, directly or indirectly, free and clear of any Liens (other than the restrictions under applicable Securities Laws) and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such ownership interests) and have not been issued in violation of preemptive or similar rights. As of the date hereof, there are (a) no subscriptions, calls, options, warrants, rights (including preemptive rights), puts or other securities convertible into or exchangeable or exercisable for the equity interests of any Subsidiary of the Company, or any other Contracts to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound obligating the Company or any of its Subsidiaries to issue or sell any shares, stock, or other equity interests in or debt securities of, any Subsidiary of the Company and (b) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in any Subsidiary of the Company (the items in clauses (a) and (b), in addition to all ownership interests of the Company’s Subsidiaries, being referred to collectively as the “CompanySubsidiary Securities”). As of the date hereof, there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any securities or equity interests of any Subsidiary of the Company. The Company and its Subsidiaries are not party to any stockholders agreement, voting agreement, proxies, registration rights agreement or other similar agreements relating to the equity interests of any Subsidiary of the Company. A sufficient number of Holders have executed the Company Voting and Support Agreement to terminate all agreements with the Company’s Affiliates. Except for the Company Subsidiary Securities, neither the Company nor any of its Subsidiaries owns any equity, ownership, profit, voting or similar interest in or any interest convertible, exchangeable or exercisable for, any equity, profit, voting or similar interest in, any Person. No shares of treasury stock are held by any Subsidiary of the Company.
Section 5.08. Financial Statements.
(a) Schedule 5.08(a) of the Company Disclosure Letter are true, correct, accurate and complete copies of (i) the unaudited consolidated balance sheets of the Company and its Subsidiaries as at December 31, 2023 and December 31, 2024, and the related unaudited consolidated statements of operations, stockholders’ equity and cash flows for the six (6) month period June 30, 2025 and the full year period ended December 31, 2024 (the “Unaudited Financial Statements”), and (ii) the unaudited consolidated condensed balance sheet of the Company and its Subsidiaries as at December 31, 2024 the related unaudited consolidated condensed statements of operations and cash flows for the six (6) month period then ended (such June 30, 2025 balance sheet of the Company and its Subsidiaries, the “Most Recent Balance Sheet” and together with the Unaudited Financial Statements, the “Financial Statements”).
(b) The Financial Statements present fairly, in all material respects, the consolidated financial position, cash flows and results of operations of the Company and its Subsidiaries as of the dates and for the periods indicated in such Financial Statements in conformity with GAAP consistently applied in all material respects throughout the periods covered thereby (except for the absence of footnotes and other presentation items and for normal and recurring year-end adjustments, in each case, the impact of which is not material).
Section 5.09. Undisclosed Liabilities. As of the date of this Agreement, neither the Company nor any of its Subsidiaries has any liability, debt or obligation, whether accrued, contingent, absolute, determined, determinable or otherwise, required to be reflected or reserved for on a balance sheet prepared in accordance with GAAP, except for liabilities, debts or obligations (a) reflected or reserved for in the Financial Statements or disclosed in
28
any notes thereto, (b) that have arisen since the date of the Most Recent Balance Sheet in the ordinary course of business of the Company and its Subsidiaries, (c) arising under this Agreement and/or the performance by the Company of its obligations hereunder, including Company Transaction Expenses, (d) disclosed in the Company Disclosure Letter, or (e) that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 5.10. Litigation and Proceedings. As of the date of this Agreement, except as would not constitute a Material Adverse Effect, there are no pending or, to the knowledge of the Company, threatened in writing Actions against the Company or any of its Subsidiaries, or, to the knowledge of the Company, any of their properties or assets. As of the date of this Agreement, except as would not constitute a Material Adverse Effect, there is no Governmental Order imposed upon or, to the knowledge of the Company, threatened in writing against the Company or any of its Subsidiaries or any of their properties or assets. As of the date of this Agreement, there is no unsatisfied judgment or any open injunction binding upon the Company or its Subsidiaries, which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the ability of the Company to enter into and perform its obligations under this Agreement.
Section 5.11. Compliance with Laws. Except with respect to compliance with Environmental Laws (which are the subject of Section 5.23) and compliance with Tax Laws (which are the subject of Section 5.15), or except as would not constitute a Material Adverse Effect, (a) the Company and its Subsidiaries are in compliance with all applicable Laws and Governmental Orders and (b) from the date that is three (3) years prior to the date of this Agreement to the date of this Agreement, to the knowledge of the Company, neither the Company nor any of its Subsidiaries, has received any written notice of any violations of applicable Laws, Governmental Orders or Permits (other than allegations asserted by providers in connection with requests for claims adjustments by such providers in the ordinary course of business), and to the knowledge of the Company, no charge, claim, assertion or Action of any violation of any Law, Governmental Order or Permit by the Company or any of its Subsidiaries is currently threatened against the Company or any of its Subsidiaries (other than allegations asserted by providers in connection with requests for claims adjustments by such providers in the ordinary course of business).
Section 5.12. Contracts; No Defaults.
(a) Schedule 5.12(a) of the Company Disclosure Letter contains a true and complete listing of all Contracts (other than purchase orders) (including without limitations agreements for funding with any Governmental Authority) described in the subclauses of this Section 5.12 to which, as of the date of this Agreement, the Company or any of its Subsidiaries is a party (together with all material amendments, waivers or other changes thereto) other than Company Benefit Plans and Standard Employment Agreements and Contracts that may not be disclosed pursuant to applicable Law (collectively, with Prior Government Contracts (as defined below) the “Material Contracts”). True, correct and complete copies of the Material Contracts have been delivered to or made available to SPAC or its agents or Representatives, except where delivery or other sharing of such Material Contract is not permitted by applicable Law.
(i) Each Contract that (x) the Company reasonably anticipates will involve aggregate payments or consideration furnished by the Company or by any of its Subsidiaries of more than $500,000 in the calendar year ended December 31, 2025 or (y) involved aggregate payments or consideration furnished to the Company or to any of its Subsidiaries of more than $500,000, in each case, in the calendar year ended December 31, 2024;
(ii) Each Contract that is a definitive purchase and sale or similar agreement for the acquisition of any Person or any business unit thereof or the disposition of any material assets of the Company or any of its Subsidiaries in the three (3) years prior to the date of this Agreement, in each case, involving payments in excess of $500,000 other than Contracts in which the applicable acquisition or disposition has been consummated and there are no material obligations ongoing;
29
(iii) Each Contract with outstanding obligations of the Company or its Subsidiaries that provides for the sale or purchase of personal property, fixed assets or real property and involves aggregate payments in excess of $500,000 in any calendar year, other than sales or purchase agreements in the ordinary course of business and sales of obsolete equipment;
(iv) Each joint venture Contract, legal partnership agreement, limited liability company agreement or similar Contract (other than Contracts between Subsidiaries of the Company) that is material to the business of the Company and its Subsidiaries taken as a whole;
(v) Each Contract expressly prohibiting or restricting in any material respect the ability of the Company or its Subsidiaries to engage in any business, to operate in any geographical area or to compete with any Person (other than Contracts with providers or other entities limiting the Company’s or any of its Subsidiary’s ability to engage providers in the same geographic area, none of which are material to the Company and its Subsidiaries, taken as a whole);
(vi) Each Contract, license or other agreement in or under which the Company or any of its Subsidiaries in-licenses from any Person, or out-licenses to any Person, any item of Intellectual Property or Technology, but excluding (A) non-exclusive licenses granted by the Company or any of its Subsidiaries to customers in the ordinary course of business; (B) Contracts where any license of any Intellectual Property or Technology is non-exclusive and incidental to the subject matter of such agreement, such as licenses to use feedback and suggestions and licenses authorizing the use of brand materials for marketing purposes; (C) nondisclosure agreements entered into in the ordinary course of business; (D) Personnel IP Agreements or agreements with subcontractors under which the Company receives licenses from a subcontractor solely for use in connection with the Company’s engagement as a prime contractor; (E) licenses in respect of Open Source Software; (F) non-exclusive licenses granted to Governmental Authorities prior to September 1, 2023 (“Prior Government Contracts”); and (G) non-exclusive licenses (including click-wrap, shrink-wrap or similar Contracts) in respect of commercially available, unmodified, non-customized, “off-the-shelf software” with an annual aggregate fee of less than $500,000;
(vii) Each Contract that constitutes an option agreement, escrow agreement (including any source code escrow Contract), settlement agreement, co-existence agreement, non-assertion or covenant not to sue agreement, in each case, concerning Intellectual Property, other than Prior Government Contracts;
(viii) Each Contract providing for the discovery, creation, development or reduction to practice by a third party of any material Intellectual Property or Technology for or on behalf of the Company or any of its Subsidiaries (other than Personnel IP Agreements);
(ix) Each employee collective bargaining Contract (“Labor Contract”) with a labor union, works council, or similar representative body (each, a “Labor Union”);
(x) Each mortgage, indenture, note, installment obligation or other instrument, agreement or arrangement for or relating to any borrowing of money by or from the Company or any of its Subsidiaries in excess of $500,000;
(xi) Each Contract that is a currency or interest hedging arrangement;
(xii) Each material Contract that provides for any most favored nation provision or equivalent preferential terms, exclusivity or similar obligations to which the Company or any of its Subsidiaries is subject;
(xiii) Each Lease; and
(xiv) Any commitment to enter into agreement of the type described in the subclauses of this Section 5.12(a).
30
(b) Except for any Contract that has terminated or will terminate upon the expiration of the stated term thereof prior to the Closing Date and except as would not reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect, as of the date of this Agreement, all of the Contracts listed pursuant to Section 5.12(a) are (i) in full force and effect and (ii) represent the legal, valid and binding obligations of the Company or one of its Subsidiaries party thereto and, to the knowledge of the Company, represent the legal, valid and binding obligations of the other parties thereto, in each case, subject to the Enforceability Exceptions. As of the date of this Agreement, except as would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect, (w) neither the Company, any of its Subsidiaries nor, to the knowledge of the Company, any other party thereto is or is alleged to be in material breach of or material default under any such Contract, (x) neither the Company nor any of its Subsidiaries has received any written claim or notice of material breach of or material default under any such Contract, (y) to the knowledge of the Company, no event has occurred which individually or together with other events, would reasonably be expected to result in a material breach of or a material default under any such Contract (in each case, with or without notice or lapse of time or both) and (z) no party to any such Contract that is a customer of or supplier to the Company or any of its Subsidiaries has, within the past twelve (12) months, canceled or terminated its business with, or, to the knowledge of the Company, threatened in writing to cancel or terminate its business with, the Company or any of its Subsidiaries.
Section 5.13. Company Benefit Plans.
(a) Schedule 5.13(a) of the Company Disclosure Letter sets forth a true and complete list of each material Company Benefit Plan as of the date hereof. “Company Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder (“ERISA”) (including Multiemployer Plans), and any and all other compensation and benefits plans, policies, programs, or arrangements and each other stock purchase, stock option, restricted stock, restricted stock unit, phantom equity, profit sharing, pension, savings, severance, retention, employment, consulting, commission, change-of-control compensation, bonus, incentive, deferred compensation, employee loan, fringe benefit, insurance, welfare, post-retirement health or welfare, health, life, tuition reimbursement, service award, company car, scholarship, relocation, disability, accident, sick pay, sick leave, accrued leave, vacation, holiday, termination, and other benefit plan, policy, program, or arrangement, whether or not subject to ERISA whether formal or informal, oral or written, funded or unfunded, insured or self-insured, in each case, for the benefit of Company Service Providers, that is sponsored, established, maintained, contributed to or required to be contributed to by the Company or its Subsidiaries, or under which the Company or its Subsidiaries has any current or potential liability, except for (i) employment agreements and offer letters establishing at-will employment or otherwise not obligating the Company or any of its Subsidiaries to make any payments or provide any benefits upon a termination of employment and otherwise not requiring more than thirty (30) days’ notice to terminate, other than as may be required by applicable Law (the “Standard Employment Agreements”) and (ii) any statutorily required plan, agreement, program, policy or other arrangement sponsored by a Governmental Authority.
(b) With respect to each material Company Benefit Plan, the Company has provided to SPAC or its counsel a true and complete copy, to the extent applicable, of (i) each writing constituting such Company Benefit Plan and all amendments thereto (or, in the case of any writings applicable to such Company Benefit Plan for which the general terms do not differ materially from each other, the form of such writing in lieu of each individual writing), and a written description of any material unwritten Company Benefit Plan; (ii) the most recent annual report and accompanying schedules; (iii) the current summary plan description and any summaries of material modifications; (iv) the most recent annual financial statements and actuarial reports; (v) the most recent determination or opinion letter received by the Company and its Subsidiaries from the IRS regarding the tax-qualified status of such Company Benefit Plan; (vi) the most recent written results of all compliance testing required by applicable Laws; and (vii) copies of any material, non-routine written correspondence with the IRS, Department of Labor or other Governmental Authority. There has been no amendment to any Company Benefit Plan made, or communicated by the Company or its Subsidiaries to participants therein, which would increase
31
materially the expense of maintaining such plan above the level of the expense incurred therefor for the most recent fiscal year.
(c) Each Company Benefit Plan (and each related trust, insurance contract or fund) is and has been established, administered and funded in accordance with its express terms, and in compliance in all material respects with all applicable Laws, including ERISA and the Code. There are no pending or, to the knowledge of the Company, threatened Actions against or relating to the Company Benefit Plans, the assets of any of the trusts under such Company Benefit Plans or the plan sponsor or the plan administrator, or against any fiduciary of the Company Benefit Plans with respect to the operation of such Company Benefit Plans (other than routine benefits claims). Neither the Company nor its Subsidiaries nor, to the knowledge of the Company, any “party in interest” or “disqualified person” with respect to a Company Benefit Plan has engaged in a non-exempt “prohibited transaction” within the meaning of Section 4975 of the Code or Section 406 of ERISA. To the knowledge of the Company, no fiduciary (within the meaning of Section 3(21) of ERISA) has breached any fiduciary duty with respect to a Company Benefit Plan or otherwise has any liability in connection with acts taken (or the failure to act) with respect to the administration or investment of the assets of any Company Benefit Plan. All material payments required to be made by the Company and its Subsidiaries under, or with respect to, any Company Benefit Plan (including all contributions, distributions, reimbursements, premium payments or intercompany charges) with respect to all prior periods have been timely made or, for any such payments that are not yet due, properly accrued and reflected in the most recent consolidated balance sheet prior to the date hereof, in each case in accordance with the provisions of each of the Company Benefit Plans, applicable Law and GAAP. To the knowledge of the Company, as of the date of this Agreement, no Company Benefit Plan is under audit or examination (nor has written notice been received of a potential audit or examination) by any Governmental Authority.
(d) Each Company Benefit Plan which is intended to be qualified within the meaning of Section 401(a) of the Code (i) has received a favorable determination or opinion letter as to its qualification or (ii) has been established under a standardized master and prototype or volume submitter plan for which a current favorable IRS advisory letter or opinion letter has been obtained by the plan sponsor and is valid as to the adopting employer, its related trust is exempt from Tax under Section 501(a) of the Code, and, to the knowledge of the Company, nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of such qualification or exemption or the imposition of any material liability, penalty or Tax under ERISA or the Code.
(e) The Company has made available a correct and complete list of all outstanding Company Equity Awards as of the Capitalization Date setting forth: (i) the form of the Company Equity Award (including whether the Company Option is a non-qualified stock option or an incentive stock option for purposes of Section 422 of the Code) and the number of shares of Company Common Stock subject to each Company Equity Award, (ii) the holder’s name, grant date, applicable vesting schedule (including acceleration rights thereof), and the per-share exercise price with respect to each Company Equity Award, and (iii) for each holder who is not a current employee of the Company or its Subsidiaries, whether such Person was an employee of the Company or its Subsidiaries on or since the grant date of the Company Option. Except as set forth in Section 5.13(e) of the Company Disclosure Letter, each holder of an outstanding Company Restricted Stock Award timely made an election under Section 83(b) of the Code. Except for the 2017 Plan and any award agreements that have been made provided to SPAC, neither the Company nor any of its Subsidiaries has adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity-related compensation to any Person (whether payable in shares of Company Common Stock, cash or otherwise). The 2017 Plan has been duly authorized, approved and adopted by the Board of Directors and the Company’s stockholders and is in full force and effect. Each Company Equity Award, (i) was duly authorized no later than the date on which the grant was by its terms effective (the “Grant Date”) by all necessary corporate action, (ii) was granted (or, in the case of Company Restricted Stock Awards, was acquired pursuant to an early exercise of a Company Option) in compliance with all applicable Laws (including all applicable federal, state and local Securities Laws) and all the terms and conditions of the 2017 Plan, and (iii) with respect to Company Options, has a per-share exercise price
32
equal to or greater than the fair market value of a share of Company Common Stock on the Grant Date and no modifications within the meaning of Section 409A of the Code have been made to any Company Options following the Grant Date, and (iv) does not trigger any obligation or liability for the holder thereof under Code Section 409A of the Code.
(f) No Company Benefit Plan is, and none of the Company or its Subsidiaries or any ERISA Affiliate has at any time in the six (6) years prior to the date of this Agreement sponsored, established, maintained, contributed to or been required to contribute to, or in any way has any liability (whether on account of an ERISA Affiliate or otherwise), directly or indirectly, with respect to any plan that is, (i) subject to Title IV or Section 302 of ERISA or Section 412, 430 or 4971 of the Code or a “defined benefit” plan within the meaning of Section 414(j) of the Code or Section 3(35) of ERISA (whether or not subject thereto), (ii) a Multiemployer Plan, (iii) a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA, (iv) a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA), or (v) a plan maintained in connection with any trust described in Section 501(c)(9) of the Code. None of the Company or its Subsidiaries or any ERISA Affiliate has withdrawn at any time in the six (6) years prior to the date of this Agreement from any Multiemployer Plan, or incurred any withdrawal liability which remains unsatisfied, and no events have occurred and no circumstances exist that could reasonably be expected to result in any such liability to the Company and its Subsidiaries.
(g) Neither the execution and delivery of this Agreement nor the consummation of the Transactions contemplated hereby will (either alone or in combination with another event) (i) result in any material payment becoming due, or material increase the amount of any compensation or benefits due, to any Company Service Provider or with respect to any Company Benefit Plan; (ii) increase any material benefits, payable under any Company Benefit Plan; (iii) result in the acceleration of the time of payment or vesting of any material compensation or benefits, or the forgiveness of any material amount of indebtedness of any Company Service Provider; or (iv) result in an obligation to fund or otherwise set aside assets to secure to any extent any of the obligations under any material Company Benefit Plan. No Person is entitled to receive any additional payment (including any Tax gross-up or other payment) from the Company or its Subsidiaries as a result of the imposition of the excise Taxes required by Section 4999 of the Code or any Taxes required by Section 409A of the Code.
(h) The consummation of the Transactions contemplated by this Agreement will not result in a change in the ownership or effective control of the Company or its Subsidiaries for purposes of Section 280G or Section 409A of the Code.
(i) Each Company Benefit Plan that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been established, funded, (if applicable) and administered in compliance in all material respects with applicable Laws.
(j) Except as would not reasonably be expected to result in material liability to the Company and its Subsidiaries, taken as a whole, all Company Benefit Plans subject to the Laws of any jurisdiction outside of the United States or that covers any Company Service Provider residing or working outside of the United States (each, a “Foreign Benefit Plan”) (i) if they are intended to qualify for special tax treatment, meet all requirements for such treatment and, to the knowledge of the Company, there are no existing circumstances or events that have occurred that could reasonably be expected to affect adversely the special tax treatment with respect to such Foreign Benefit Plan, (ii) if they are intended to be funded and/or book-reserved, are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions, and (iii) if intended or required to be qualified, approved or registered with a Governmental Authority, is and has been in the three (3) years prior to the date of this Agreement so qualified, approved or registered and, nothing has occurred in the three (3) years prior to the date of this Agreement that could reasonably be expected to result in the loss of such qualification, approval or registration, as applicable.
33
Section 5.14. Labor Matters.
(a) The Company has delivered the Company Employee List to SPAC and all of the information included on the Company Employee List is true and accurate as of the date hereof. The Company has delivered a true and accurate list of each individual independent contractor or other individual service provider who provides substantially recurring services to the Company or any of its Subsidiaries as of the date hereof for annualized fees or cash compensation in excess of $250,000, which includes for each such individual (i) a description of the services so provided, (ii) primary work location, (iii) base fee or compensation rate, and (iv) the amount of fees or other compensation actually paid in 2024 and 2025.
(b) Neither the Company nor any of its Subsidiaries is a party to or otherwise bound by any Labor Contract with a Labor Union and none of the employees of the Company or its Subsidiaries are subject to collective bargaining arrangements with respect to their employment with the Company. To the knowledge of the Company, there are no activities or proceedings of any Labor Union to organize any Company Employees. Additionally, to the knowledge of the Company, (i) there is no unfair labor practice charge or complaint pending before any applicable Governmental Authority relating to the Company and its Subsidiaries or any Company Service Provider; (ii) there is no labor strike, material slowdown, material dispute, or material work stoppage or lockout pending or threatened against or affecting the Company and its Subsidiaries, and none of the Company and its Subsidiaries has experienced any strike, material slowdown or material work stoppage, lockout or other collective labor action by or with respect to any current Company Service Provider; (iii) there is no representation claim or petition pending before any applicable Governmental Authority; and (iv) there are no charges with respect to or relating to the Company and its Subsidiaries pending before any applicable Governmental Authority responsible for the prevention of unlawful employment practices.
(c) In the three (3) years prior to the date of this Agreement, neither the Company nor any of its Subsidiaries has implemented any “plant closings” or “mass layoffs,” as defined by the Worker Adjustment and Retraining Notification Act of 1988, as amended, or similar state or local laws (the “WARN Act”).
(d) Except where the failure to so comply would not reasonably be expected to be, material to the Company and its Subsidiaries, taken as a whole, each of the Company and its Subsidiaries is, and have been, in compliance in all material respects with (i) all applicable Laws regarding employment and employment practices, including, without limitation, all applicable Laws relating to wages, hours, overtime, collective bargaining, employment discrimination, civil rights, safety and health, workers’ compensation, pay equity, classification of employees and independent contractors, and the collection and payment of withholding and/or social security Taxes, (ii) all requirements required by Law or regulation relating to the employment of foreign citizens, including all requirements of Form I-9 Employment Verification, and none of the Company or its Subsidiaries currently employs, or has ever employed, any Person who was not permitted to work in the jurisdiction in which such Person was employed and (iii) all Laws that could require overtime to be paid to any current or former Company Employee, and no Person has ever brought or, to the knowledge of the Company, threatened to bring a claim for unpaid compensation or employee benefits, including overtime amounts.
(e) As of the date of this Agreement, the Company has not received written notice that any current direct report to the CEO of the Company presently intends to terminate his or her employment within six months after the Closing. To the knowledge of the Company, as of the date of this Agreement, no current Company Service Provider at the level of Vice President or above has received an offer to join a business that is competitive with the business activities of the Company and its Subsidiaries.
(f) Except where the failure to so comply would not reasonably be expected to be, material to the Company and its Subsidiaries, taken as a whole, there are no Actions against the Company or any of its Subsidiaries pending or, to the knowledge of the Company, threatened in writing, arising out of, in connection with or otherwise relating to the employment or termination of employment or failure to employ any individual by the Company or any of its Subsidiaries. As of the date of this Agreement, there is no Governmental Order imposing any continuing material remedial obligations on the Company or any of its Subsidiaries.
34
(g) To the knowledge of the Company, the current Company Employees who work in the United States are authorized and have appropriate documentation to work in the United States. To the knowledge of the Company, neither the Company nor any of its Subsidiaries have ever been notified of any pending or threatened investigation by any branch or department of U.S. Immigration and Customs Enforcement (“ICE”), or other federal agency charged with administration and enforcement of federal immigration laws concerning the Company and its Subsidiaries, and neither the Company nor any of its Subsidiaries have received any “no match” notices from ICE, the Social Security Administration, or the IRS.
(h) Except as would not reasonably be expected to be material to the Company, taken as a whole, in the three (3) years prior to the date of this Agreement, no allegations of sexual harassment or sexual misconduct have been made by a Company Employee (in their capacity as an employee of the Company or its Subsidiaries) against any director or officer of the Company or such Subsidiaries (in their respective capacities as such) or against the Company or any of its Subsidiaries on account of the conduct of any such director or officer. To the knowledge of the Company, neither the Company nor any of its Subsidiaries have incurred, nor do circumstances exist under which the Company or any of its Subsidiaries would reasonably be expected to incur, any liability arising from any allegation of sexual harassment against any director or officer of the Company or any of its Subsidiaries (in their respective capacities as such) that would reasonably be expected to be material to the Company, taken as a whole.
Section 5.15. Taxes. Except as would not reasonably be expected to have a Material Adverse Effect:
(a) All material Tax Returns required by Law to be filed by the Company or its Subsidiaries (taking into account any applicable extensions) have been filed, and all such Tax Returns are true, correct and complete in all material respects.
(b) All material amounts of Taxes due and owing by the Company and its Subsidiaries have been paid, other than Taxes described in clause (iii) of the definition of Permitted Liens. The Most Recent Balance Sheet reflects, in accordance with GAAP, all material unpaid Taxes of the Company and its Subsidiaries for periods (or portions of periods) through the date of the Most Recent Balance Sheet. Since the date of the Most Recent Balance Sheet, neither the Company nor any of its Subsidiaries have incurred any material Tax liability outside the ordinary course of business other than Taxes resulting from the Transactions.
(c) Each of the Company and its Subsidiaries (i) has withheld and deducted all material amounts of Taxes required to have been withheld or deducted by it in connection with amounts paid or owed to any employee, independent contractor, creditor, stockholder or any other third party, (ii) to the extent required, has remitted, or will remit on a timely basis, such amounts to the appropriate Governmental Authority, and (iii) has complied in all material respects with applicable Law with respect to Tax withholding, including all reporting and record keeping requirements.
(d) Neither the Company nor any of its Subsidiaries is currently engaged in any material audit, administrative proceeding or judicial proceeding with respect to Taxes. Neither the Company nor any of its Subsidiaries has received any written notice from any Governmental Authority of a dispute or claim with respect to a material amount of Taxes, other than disputes or claims that have since been resolved and, to the knowledge of the Company, no such claims have been threatened in writing.
(e) No written claim has been made by any Governmental Authority in a jurisdiction where the Company or any of its Subsidiaries does not file a Tax Return that such entity is or may be subject to Tax in that jurisdiction in respect of Taxes that would be the subject of such Tax Return, which claim has not been resolved.
(f) There are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection or assessment or reassessment of, material Taxes of the Company or any of its Subsidiaries (other than ordinary course extensions of time to file Tax Returns) and no written request for any such waiver or extension is currently pending.
35
(g) Neither the Company nor any of its Subsidiaries (or any predecessor thereof) has constituted a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the two (2) years prior to the date of this Agreement.
(h) Neither the Company nor any of its Subsidiaries has been a party to any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).
(i) Except with respect to deferred revenue collected by the Company and its Subsidiaries in the ordinary course of business, neither the Company nor any of its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date and made prior to the Closing; (ii) any “closing agreement” with respect to Taxes with a Governmental Authority executed on or prior to the Closing; (iii) installment sale or open transaction disposition made on or prior to the Closing; or (iv) prepaid amount received on or prior to the Closing.
(j) There are no Liens with respect to Taxes on any of the assets of the Company or its Subsidiaries, other than Permitted Liens.
(k) Neither the Company nor any of its Subsidiaries has any material liability for the Taxes of any Person (other than the Company or its Subsidiaries) (i) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or non-U.S. Law), (ii) as a transferee or successor, or (iii) by Contract or otherwise (except, in each case, for liabilities pursuant to commercial agreements not primarily relating to Taxes).
(l) Neither the Company nor any of its Subsidiaries is a party to, or bound by, or has any obligation to any Governmental Authority or other Person (other than the Company or its Subsidiaries) under any Tax allocation, Tax sharing, Tax indemnification or similar agreements (except, in each case, for any such agreements that are commercial agreements not primarily relating to Taxes).
(m) The Company has not been, is not, and immediately prior to the First Effective Time will not be, treated as an “investment company” within the meaning of Section 368(a)(2)(F) of the Code.
(n) The Company and its Subsidiaries have not taken any action, and none of the Company or any of its Subsidiaries is aware of any fact or circumstance, that would reasonably be expected to prevent the Mergers from qualifying for the Intended Tax Treatment.
(o) The Company has not been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(p) The Company is, and has been since its formation, treated as a corporation that is a tax resident of the United States for U.S. federal income tax purposes.
(q) Nothing in this Agreement, including this Section 5.15, shall be construed as providing a representation or warranty with respect to the existence, amount, expiration date or limitations on (or availability of) any net operating losses, Tax credits, Tax basis or other similar Tax attributes after the Closing Date.
For purposes of this Section 5.15, any reference to the Company or any of its Subsidiaries shall be deemed to include any Person that merged with or was liquidated or converted into the Company or any Subsidiary, if applicable. Other than Section 5.13 to the extent such Section relates to Taxes, this Section 5.15 provides the sole and exclusive representations and warranties of the Company in respect of Tax matters.
Section 5.16. Insurance. As of the date of this Agreement, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken
36
as a whole: (a) all of the material policies of property, fire and casualty, liability, workers’ compensation, directors and officers and other forms of insurance (collectively, the “Policies”) held by, or for the benefit of, the Company or any of its Subsidiaries with respect to policy periods that include the date of this Agreement are in full force and effect, and (b) neither the Company nor any of its Subsidiaries has received a written notice of cancellation of any of the Policies or of any material changes that are required in the conduct of the business of the Company or any of its Subsidiaries as a condition to the continuation of coverage under, or renewal of, any of the Policies.
Section 5.17. Permits. Each of the Company and its Subsidiaries has all material licenses, approvals, consents, registrations, franchises and permits (the “Permits”) that are required to own, lease or operate its properties and assets and to conduct its business as currently conducted (except with respect to licenses, approvals, consents, registrations and permits required under applicable Environmental Laws (as to which certain representations and warranties are made pursuant to Section 5.23)), except where the failure to obtain the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company and its Subsidiaries have obtained all of the Permits necessary under applicable Laws to permit the Company and its Subsidiaries to own, operate, use and maintain their assets in the manner in which they are now operated and maintained and to conduct the business and operations of the Company and its Subsidiaries as currently conducted, except where the failure to obtain the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The operation of the business of the Company and its Subsidiaries as currently conducted is not in violation of, nor is the Company or any of its Subsidiaries in default or violation under, any Permit, except where such violation or default would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.18. Real Property.
(a) The Company does not have and has not ever had any Owned Real Property.
(b) Schedule 5.18(b) of the Company Disclosure Letter contains a true, correct and complete list, as of the date of this Agreement, of all Leases, including the address of each Leased Real Property. As of the date hereof, the Leased Real Property identified on Schedule 5.18(b) of the Company Disclosure Letter comprise all of the real property used or otherwise related to, the business of the Company and its Subsidiaries as it is currently conducted. Neither the Company nor any Subsidiary of the Company is party to any agreement or option to purchase or sell any Leased Real Property or interest therein.
(c) The Company has made available to SPAC true, correct and complete copies of the leases, subleases, licenses, occupancy agreements, or any other contracts (including all material modifications, amendments, guarantees, supplements, waivers and side letters thereto) pursuant to which the Company or any of its Subsidiaries occupy (or have been granted an option to occupy) the Leased Real Property or is otherwise a party with respect to the Leased Real Property (the “Leases”). The Company or one of its Subsidiaries has a valid and subsisting leasehold or subleasehold estate in, and enjoys peaceful and undisturbed possession of, all Leased Real Property, subject only to Permitted Liens. With respect to each Lease, (i) such Lease is valid, binding and enforceable and in full force and effect against the Company or one of its Subsidiaries and, to the knowledge of the Company knowledge, the other party thereto, subject to the Enforceability Exceptions, (ii) each Lease has not been materially amended or modified except as reflected in the modifications, amendments, supplements, waivers and side letters made available to SPAC, (iii) neither the Company nor one of its Subsidiaries has received or given any written notice of material default or material breach under any of the Leases and to the knowledge of the Company, neither the Company nor its Subsidiaries has received oral notice of any material default that has not been cured within the applicable cure period, (iv) as of the date of this Agreement, the Company has not received written notice from any Governmental Authority regarding intent to modify, suspend or revoke any Lease, and (v) there does not exist under any Lease any event or condition which, with notice or lapse of time or both, would become a material default by the Company or one of its Subsidiaries or, to the knowledge of the Company, the other party thereto.
37
(d) Neither the Company nor its Subsidiaries subleases or grants any other Person the right to use or occupy Leased Real Property (and no such agreement is currently in effect). Neither the Company nor its Subsidiaries has collaterally assigned or granted any other security interest in the Leased Real Property or any interest therein which is still in effect. Neither the Company nor any of its Subsidiaries is in material default or violation of, or not in compliance with, any legal requirements applicable to its occupancy of the Leased Real Property. No construction or expansion is currently being performed or is planned by the Company or its Subsidiaries (or to the knowledge of the Company, by and other party to any Lease) at any Leased Real Property that is expected to result in liability to the Company or any of its Subsidiaries (including in the aggregate) after the date of this Agreement in excess of $500,000.
Section 5.19. IntellectualProperty and Data Security.
(a) Schedule 5.19(a) **** of the Company Disclosure Letter lists as of the date hereof a true, correct and complete list of (i) all Owned Intellectual Property for which applications are pending, or which are registered or issued, in each case, under the authority of any Governmental Authority, whether in the United States or internationally (“Registered Intellectual Property”); (ii) all domain names and social media accounts owned or purported to be owned by the Company or any of its Subsidiaries; and (iii) each material unregistered Trademark owned or purported to be owned by the Company or any of its Subsidiaries. Each item of Registered Intellectual Property, other than items with pending applications, is subsisting and enforceable, and, to the knowledge of the Company, all issuances and registrations are valid. All necessary registration, maintenance, renewal, and other relevant fees due through the Closing Date have been timely paid and all necessary documents and certificates in connection therewith that are required to be filed have been timely filed with the relevant authorities (including domain name registrars) in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining the Registered Intellectual Property in full force and effect. The Company or one of its Subsidiaries (A) solely and exclusively owns all right, title and interest in and to all Owned Intellectual Property free and clear of any Liens (other than Permitted Liens) and (B) has (and will continue to have following the Closing), and other than as disclosed in Section 5.04, the right to use pursuant to a valid written license, sublicense, agreement or permission, all other material Intellectual Property and Technology used in the operation of the business of the Company and its Subsidiaries, as currently conducted (“Licensed Intellectual Property”). Except as would not reasonably be expected to have a Material Adverse Effect, the Company Intellectual Property constitutes all of the Intellectual Property used in and held for use in, and necessary and sufficient to enable the Company and its Subsidiaries to conduct, the business as currently conducted. None of the Owned Intellectual Property or, to the knowledge of the Company, any other Intellectual Property exclusively licensed to the Company or any of its Subsidiaries, is subject to any pending or outstanding injunction, directive, order, judgment or other disposition of a dispute that adversely restricts the use, transfer, registration, or licensing of, or adversely affects the validity or enforceability of any such Intellectual Property.
(b) Except as would not reasonably be expected to have a Material Adverse Effect, the conduct and operation of the business of the Company and its Subsidiaries are not infringing upon, misappropriating, diluting or otherwise violating any Intellectual Property rights of any Person, and have not infringed upon, misappropriated, diluted or otherwise violated any Intellectual Property rights of any Person. To the knowledge of the Company, no third party is infringing upon, misappropriating, diluting or otherwise violating or, in the three (3) years prior to the date of this Agreement, has infringed upon, misappropriated, diluted or otherwise violated any Owned Intellectual Property. As of the date of this Agreement, no claims alleging or involving any of the foregoing have been made against any Person by the Company or any of its Subsidiaries. Except as would not reasonably be expected to have a Material Adverse Effect, as of the date of this Agreement, the Company and its Subsidiaries (i) are not the subject of any pending or threatened (in writing, or to the knowledge of the Company, otherwise) Actions and (ii) have not received from any Person at any time in the three (3) years prior to the date of this Agreement any written notice, for each of (i) and (ii) (A) alleging that the Company or any of its Subsidiaries is infringing upon, misappropriating, diluting or otherwise violating or has infringed upon, misappropriated, diluted or otherwise violated, any Intellectual Property rights of any Person or (B) challenging
38
the ownership, use, validity or enforceability of any Owned Intellectual Property and, to the knowledge of the Company, there are no facts or circumstances that would form the reasonable basis for any such claim or challenge.
(c) Except as would not reasonably be expected to have a Material Adverse Effect, (i) the Company and its Subsidiaries take, and have taken, commercially reasonable actions and measures designed to protect and maintain: (A) the sole ownership, confidentiality and value of their Owned Intellectual Property including through valid and enforceable copies of agreements, substantially in the form made available to SPAC, executed by their former and current employees, consultants and independent contractors, (x) in each case who are or were engaged in creating or developing Owned Intellectual Property for the Company or its Subsidiaries, pursuant to which such Person presently assigned to the Company or its Subsidiaries all of such Person’s rights, title and interest in and to all Intellectual Property or Technology created or developed for the Company or its Subsidiaries by such Person or, in the case of employees, consultants and independent contractors that retained title in certain Intellectual Property owned by such employee, consultant or independent contractor prior to the employment or engagement or that was independently developed outside the scope of such employment or engagement, granted the Company or applicable Subsidiary a broad, perpetual, irrevocable license to any such retained Intellectual Property incorporated into the Intellectual Property or Technology created or developed for the Company or applicable Subsidiary and (y) pursuant to which such Person has agreed to hold all Trade Secrets of or held by the Company and its Subsidiaries disclosed to such Person in confidence both during and after such Person’s employment or retention for a reasonable period thereby (x) and (y) collectively, the “Personnel IP Agreements” and (B) the security, confidentiality, value, operation and integrity of (x) their IT Systems and (y) Software in their respective possession or control; (ii) no former or current founder, officer, director, employee, independent contractor, consultant or agent of the Company or its Subsidiaries holds any right, title or interest, in whole or in part, in or to any Company Intellectual Property, and, to the knowledge of the Company, no Person (including any former or current employee, consultant, or independent contractor) is in breach of any Personnel IP Agreement; (iii) no Trade Secret of the Company or any of its Subsidiaries has been authorized to be disclosed or has been actually disclosed by the Company or any of its Subsidiaries to any Person other than pursuant to a valid written non-disclosure agreement adequately restricting the disclosure and use of such Intellectual Property; (iv) no Open Source Software is or has been included, incorporated or embedded in, linked to, combined or distributed with or used in the delivery or provision of any products of the Company or any of its Subsidiaries in a manner that would (A) require the Company or any of its Subsidiaries to distribute or disclose any Business Software or any other Owned Intellectual Property; (B) require the Company to distribute or make available any Business Software or any other Owned Intellectual Property without charge or at a reduced charge; (C) require that users have the right to decompile, disassemble or otherwise reverse engineer any Business Software or any other Owned Intellectual Property; except, in each of the foregoing cases, other than with respect to the Open Source Software itself; or (D) otherwise impose any limitation, restriction, waiver of rights or condition on the right or ability of the Company or to use or distribute any Owned Intellectual Property;****(v) except for employees, consultants and other independent contractors engaged by the Company or any of its Subsidiaries in the ordinary course of business under written confidentiality agreements or other written agreements that include confidentiality provisions, no other Person has any right to access, possess, or have disclosed or, to the knowledge of the Company, actually possesses any source code owned by or purported to be owned by the Company or any of its Subsidiaries; (vi) neither the Company nor any of its Subsidiaries is a party to (or is obligated to enter into) any source code escrow Contract or any other Contract requiring the deposit of any source code or related materials for any Software; and (vii) the Company and each of its Subsidiaries have complied and are in compliance with all terms and conditions of all relevant licenses for Open Source Software incorporated or embedded into, linked or called by, or otherwise used in Software owned or purported to be owned by the Company and its Subsidiaries.
(d) (i) Except as would not reasonably be expected to have a Material Adverse Effect, the Company or one of its Subsidiaries owns or has a valid right to access and use pursuant to a written agreement all of their IT Systems used in connection with their business as currently conducted, and such IT Systems operate reliably and in material compliance with their respective documentation and specifications and are sufficient in all material
39
respects for the conduct of the business as currently conducted; (ii) the Company and each of its Subsidiaries has implemented and maintained commercially reasonable back-up and disaster recovery arrangements for the continued operation of their businesses in the event of a failure of its IT Systems that are in material accordance with standard industry practice, and such IT Systems have not, in the past three (3) years, malfunctioned or failed at any time in a manner that resulted in material disruptions to the operation of the business the Company and its Subsidiaries; (iii) to the knowledge of the Company, there has not been, in the past three (3) years, any material security breach, unauthorized use of or unauthorized access to any of the material IT Systems of the Company and its Subsidiaries; (iv) to the knowledge of the Company, the Software and IT Systems of the Company and its Subsidiaries are free of any material malicious or disabling Software including viruses, worms and trojan horses, which may be used to gain unauthorized access to or without authorization, alter, delete, destroy or disable any of its or any third party’s IT Systems or Software or which may in other ways cause material damage to or abuse such IT Systems or Software (“Malware”); (v) the Company and each of its Subsidiaries have taken commercially reasonable efforts designed to maintain its Software free from such Malware; and (vi) the Company and each of its Subsidiaries possesses a sufficient number of seat licenses for the IT Systems and has not been subject to any audit related to a lack of sufficient seat licensing.
(e) No funding, facilities, or personnel of any Governmental Authority or any university, college, research institute or other educational institution has been or is being used to create any Owned Intellectual Property, where, as a result, such Governmental Authority, university, college, research institute or other educational institution has any rights, title or interest in or to such Intellectual Property, other than “march-in rights” as set forth in any Material Contracts.
(f) AI Technologies.
(i) The Company and its Subsidiaries have: (A) obtained all licenses, consents, and permissions, provided all notices and disclosures, and otherwise have all rights, in each case as required under applicable Law, to collect and use all data, content, or materials used by the proprietary artificial intelligence Technology of the Company and its Subsidiaries (“CompanyAI”) in the operation of the their business as presently conducted (“AI Inputs”); (B) complied with all use restrictions and other requirements of any contractual obligation, website terms of use or terms of service, or other terms by which the Company or any of its Subsidiaries is bound and governing any collection and/or use by the Company and its Subsidiaries of such AI Inputs; and (C) implemented and complied with commercially reasonable policies and procedures relating to use of third-party Generative AI Tools (as defined below), which policies and procedures are reasonably consistent with industry standards; ****
(ii) all Company AI has been designed, developed, tested, trained, implemented and improved in compliance with all applicable Laws; and
(iii) the Company and its Subsidiaries (A) use all generative artificial intelligence Technology or similar tools capable of automatically producing various types of content (such as source code, text, images, audio, and synthetic data) based on user-supplied prompts (“Generative AI Tools”) in compliance with the applicable license terms, consents, agreements, and laws; (B) have not included and do not include any Personal Information, Trade Secrets or material confidential or proprietary information of the Company or any of its Subsidiaries, or of any third Person under an obligation of confidentiality by the Company or any of its Subsidiaries, in any prompts or inputs into any Generative AI Tools, except in cases where such Generative AI Tools do not use such information, prompts, or services to train the machine learning or algorithm of such tools or improve the services related to such tools; and (C) have not used Generative AI Tools to develop any Owned Intellectual Property in a manner that it believes would materially affect the Company’s ownership or rights of any Owned Intellectual Property.
(g) Except as would not reasonably be expected to have a Material Adverse Effect, (i) the Company and, to the knowledge of the Company, any Person authorized by the Company to Process Personal Information, when acting for and on behalf of the Company have, at all applicable times in the three (3) years prior to the date of
40
this Agreement, complied with all: (A) applicable Privacy Laws, (B) the Company’s written policies and notices regarding Personal Information, and (C) the Company’s obligations with respect to Personal Information under any Contracts or industry standards to which the Company purports to adhere (including, as applicable, the Payment Card Industry Data Security Standard) (clauses (A), (B), and (C) collectively, “Privacy Requirements”); and (ii) the Company has implemented and, in the three (3) years prior to the date of this Agreement, maintained commercially reasonable and appropriate (taking into account the Company’s size and resources as well as the nature and purpose of the Processing and the types of Personal Information) administrative, technical and organizational safeguards, compliant with Privacy Requirements in all material respects, designed to protect the confidentiality, integrity and availability of, as appropriate, the IT Systems and Personal Information in its possession or under its control against loss, theft, misuse or unauthorized access, use, modification, alteration, destruction or disclosure, and the Company has taken commercially reasonable steps to ensure that any third party authorized by the Company to access or Process Personal Information on its behalf collected by or on behalf of the Company has implemented and maintained the same; (iv) to the knowledge of the Company, any third party who has provided Personal Information to the Company in the three (3) years prior to the date of this Agreement, has not done so in material violation of applicable Privacy Laws.
(h) In the three (3) years prior to the date of this Agreement, (i) there have been no breaches of the Company’s security that resulted in material misuse of, or unauthorized access to, or disclosure, modification, or destruction of any Personal Information in the possession or control of the Company and its Subsidiaries or, to the knowledge of the Company, Processed by a third party on behalf of the Company and its Subsidiaries (“Security Incident”) that would in each instance require notification to any Person pursuant to any applicable Privacy Requirement; and (ii) the Company has not provided or, to the knowledge of the Company, been legally required to provide any notices to any Person in connection with a Security Incident. In the three (3) years prior to the date of this Agreement, the Company has not received any written notice of any investigations or inquiries from any Governmental Authority or written notice of other claims by any Person by or before any Governmental Authority, in each case related to the Company’s or its Subsidiaries’ violation of any Privacy Requirements, nor has the Company been charged with the violation of any Privacy Law. Except as would not reasonably be expected to have a Material Adverse Effect, the Company has, since August 1, 2023, conducted commercially reasonable privacy and security reviews at commercially reasonable and appropriate intervals and has, in a commercially reasonable manner, resolved, remediated, or mitigated any (i) privacy or data security plans, and taken actions consistent with such plans, to the extent required, in an effort to safeguard all Personal Information in its possession or under its control, and (ii) critical- or high-severity issues or vulnerabilities identified by such reviews.
(i) Except as would not reasonably be expected to have a Material Adverse Effect, the Company is not subject to any Privacy Requirements that, following and because of the Closing, would prohibit the Company from Processing any Personal Information in the manner in which the Company Processed such Personal Information immediately prior to the Closing. Except as would not reasonably be expected to have a Material Adverse Effect, to the knowledge of the Company, the transactions contemplated by this Agreement will not violate applicable Privacy Requirements.
Section 5.20. Anti-Bribery, Anti- Corruption , and Anti-Money Laundering. Neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any of their respective directors, officers, employees, agents, or any other Person acting for or on behalf of the Company or any of its Subsidiaries in the three (3) years prior to the date of this Agreement, (a) made, offered, or promised to make or offer any payment, loan, or transfer of anything of value, including any reward, advantage, or benefit of any kind, to or for the benefit of any Government Official, candidate for public office, political party, or political campaign, for the purpose of (i) influencing any act or decision of such Government Official, candidate, party or campaign, (ii) inducing such Government Official, candidate, party or campaign to do or omit to do any act in violation of a lawful duty, (iii) obtaining or retaining business for or with any Person, (iv) expediting or securing the performance of official acts of a routine nature, or (v) otherwise securing any improper advantage, in each case in violation of the Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq., as amended, or any other applicable Laws
41
relating to corruption or bribery; (b) paid, offered, or promised to pay or offer any bribe, payoff, influence payment, kickback, unlawful rebate, or other similar unlawful payment of any nature; (c) made, offered or promised to make or offer any unlawful contributions, gifts, entertainment, or other unlawful expenditures; (d) established or maintained any unlawful fund of corporate monies or other properties; (e) created or caused the creation of any false or inaccurate books and records of the Company or any of its Subsidiaries; or (f) otherwise violated any provision of the Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq., as amended, the Money Laundering Control Act, the Currency and Foreign Transactions Reporting Act, The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or any other Laws relating to corruption, bribery, or money laundering. In the three (3) years prior to the date of this Agreement, neither the Company nor any of its Subsidiaries, has made any voluntary or directed disclosure to any Governmental Authority relating to corruption, bribery or money laundering Laws; to the knowledge of the Company, been the subject of any investigation or inquiry regarding compliance with such Laws; or been assessed any fine or penalty under such Laws.
Section 5.21. Sanctions, Import, and Export Controls. Neither the Company nor any of its Subsidiaries, nor any of their respective directors, officers, employees, nor, to the knowledge of the Company, any of their agents, or any other Person acting for or on behalf of the Company, any of its Subsidiaries: (a) is a Sanctioned Party, or (b) has violated any Sanctions since April 24, 2019. The Company and its Subsidiaries, are, and since April 24, 2019 have been, in possession of and in compliance with any and all authorizations, consents, licenses, registrations, and permits that may be required for their lawful conduct under economic Sanctions and Export-Import Laws. Since April 24, 2019, neither the Company nor any of its Subsidiaries, has made any voluntary disclosure to any Governmental Authority relating to Sanctions or Export-Import Laws, has been the subject of any investigation or inquiry regarding compliance with such Laws or has been assessed any fine or penalty under such Laws. The Company, and each of its subsidiaries, maintains policies and procedures reasonably designed to promote compliance with economic Sanctions and Export-Import Laws.
Section 5.22. Outbound Investment Security Program Status. The Company is not a “person of a country of concern” within the meaning of the Outbound Investment Security Program.
Section 5.23. Environmental Matters. Except as would not constitute a Material Adverse Effect:
(a) the Company and its Subsidiaries are, and in the three (3) years prior to the date of this Agreement have been, in compliance with all applicable Environmental Laws;
(b) the Company and its Subsidiaries are not, and in the three (3) years prior to the date of this Agreement, have not been, required to obtain, maintain or comply with any Permit required under applicable Environmental Laws; and
(c) there are no written claims or notices of violation pending against or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries alleging any violations of or liability under any Environmental Law or any violations or liability concerning any Hazardous Materials, nor to the knowledge of the Company, is there any basis for any such claims or notices.
Other than Section 5.04, Section 5.05, Section 5.09, Section 5.11 and Section 5.19(g), this Section 5.23 provides the sole and exclusive representations and warranties of the Company in respect of environmental matters, including any and all matters arising under Environmental Laws.
Section 5.24. Absence of Changes.
(a) Since the date of the Most Recent Balance Sheet to the date of this Agreement, no Material Adverse Effect has occurred.
42
(b) Since the date of the Most Recent Balance Sheet to the date of this Agreement, except (i) as set forth on Schedule 5.24(b) of the Company Disclosure Letter, and (ii) in connection with the transactions contemplated by this Agreement and any other Transaction Agreement, through and including the date of this Agreement, the Company and its Subsidiaries have carried on their respective businesses and operated their properties in all material respects in the ordinary course of business.
Section 5.25. Brokers ’ Fees. Except as set forth on Schedule 5.25 to the Company Disclosure Letter, no broker, finder, financial advisor, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other similar fee, commission or other similar payment in connection with the Transactions based upon arrangements made by the Company, any of its Subsidiaries or any of their Affiliates.
Section 5.26. Related Party Transactions. Except for the Contracts set forth on Schedule 5.26 of the Company Disclosure Letter, there are no Contracts between the Company or any of its Subsidiaries on the one hand, and any Affiliate, officer or director of the Company or, to the knowledge of the Company, any Affiliate of any of them, on the other hand, except in each case, for (a) employment agreements, fringe benefits and other compensation paid to directors, officers and employees consistent with previously established policies, (b) reimbursements of expenses incurred in connection with their employment or service (excluding from clause (a) and this clause (b) any loans made by the Company or its Subsidiaries to any officer, director, employee, member or stockholder and all related arrangements, including any pledge arrangements), (c) the Company Stockholder Agreements, (d) Contracts pursuant to which any such Affiliate, officer or director of the Company has purchased equity of the Company, and (e) Company Benefit Plans, Standard Employment Agreements and amounts paid pursuant to such Company Benefit Plans and Standard Employment Agreements. For clarity, no disclosure will be required under this Section 5.26 as to (i) portfolio companies of any venture capital, private equity or angel investor in the Company or (ii) any publicly traded company.
Section 5.27. Registration Statement and Proxy Statement. None of the information relating to the Company or its Subsidiaries supplied or to be supplied by the Company, or by any other Person acting on behalf of the Company, in writing specifically for inclusion in the Registration Statement or Proxy Statement will, as of the date the Proxy Statement (or any amendment or supplement thereto) is first mailed to the SPAC Stockholders, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SPAC PARTIES
Except as set forth in: (i) the disclosure schedule dated as of the date of this Agreement delivered by SPAC to the Company (the “SPAC Disclosure Letter”) (each section or subsection of which qualifies (a) the correspondingly numbered representation, warranty or covenant if specified therein and (b) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is reasonably apparent) or (ii) the SEC Reports filed or furnished by SPAC prior to the date of this Agreement (excluding (x) any disclosures in such SEC Reports under the headings “Risk Factors,” “Forward-Looking Statements” or “Qualitative Disclosures About Market Risk” and other disclosures that are predictive, cautionary or forward looking in nature and (y) any exhibits or other documents appended thereto) (it being acknowledged that nothing disclosed in such a SEC Report will be deemed to modify or qualify the representations, warranties, or covenants set forth in Section 6.05 (Litigation and Proceedings); Section 6.07 (Financial Ability; Trust Account); Section 6.11 (Tax Matters); Section 6.13 (Capitalization)); and Section 8.03 (Conduct of SPAC During the Interim Period) each SPAC Party represents and warrants to the Company as of the date hereof and as of the Closing as follows:
Section 6.01. Corporate Organization. Each of SPAC and Merger Sub I is duly incorporated and is validly existing as a corporation, in good standing under the Laws of its jurisdiction of incorporation and has the requisite power and authority to own, lease or operate its assets and properties and to conduct its business as it is
43
now being conducted. Merger Sub II is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware. The copies of the organizational documents of each of the SPAC Parties previously delivered by SPAC to the Company are true, correct and complete and are in effect as of the date of this Agreement. Each of the SPAC Parties is, and at all times has been, in compliance in all material respects with all restrictions, covenants, terms and provisions set forth in its respective organizational documents. Each of the SPAC Parties is duly licensed or qualified and in good standing (or its equivalent) as a foreign corporation in all jurisdictions in which its ownership of property or the character of its activities is such as to require it to be so licensed or qualified, except where failure to be so licensed or qualified has not and would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the SPAC Parties to enter into this Agreement or consummate the Transactions. No SPAC Party is in violation of any provision of its organizational documents.
Section 6.02. Due Authorization.
(a) Each of the SPAC Parties has all requisite corporate power and authority to execute and deliver this Agreement and each Transaction Agreement to which it is a party and, upon receipt of approval of the SPAC Stockholder Matters by the SPAC Stockholders, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance of this Agreement and such Transaction Agreements and the consummation of the Transactions have been duly, validly and unanimously authorized and approved by the board of directors of the applicable SPAC Party and, except for approval of the SPAC Stockholder Matters by the SPAC Stockholders, no other corporate proceeding on the part of any SPAC Party is necessary to authorize the execution, delivery and performance of this Agreement or such Transaction Agreements. By SPAC’s execution and delivery hereof, it has provided all approvals on behalf of equityholders of Merger Subs required for the Transactions. This Agreement has been, and each such Transaction Agreement to which such SPAC Party will be party, duly and validly executed and delivered by such SPAC Party and, assuming due authorization and execution by each other Party hereto and thereto, this Agreement constitutes, and each such Transaction Agreement to which such SPAC Party will be party, will constitute a legal, valid and binding obligation of such SPAC Party, enforceable against each SPAC Party in accordance with its terms, subject to the Enforceability Exceptions.
(b) Assuming a quorum is present at the Special Meeting, as adjourned or postponed, the only votes of any of SPAC’s authorized share capital necessary in connection with the entry into this Agreement by SPAC, the consummation of the Transactions, including the Closing, and the approval of the SPAC Stockholder Matters are as set forth on Schedule 6.02(b) to the SPAC Disclosure Letter.
(c) At a meeting duly called and held or otherwise by unanimous written resolutions, the board of directors of SPAC has unanimously: (i) determined that this Agreement and the Transactions are fair to and in the best interests of SPAC’s shareholders; (ii) determined that the fair market value of the Company is equal to at least eighty percent (80%) of the amount held in the Trust Account (excluding Taxes paid or payable on the income earned on the Trust Account and excluding the amount of any deferred underwriting commissions) as of the date hereof; (iii) approved the transactions contemplated by this Agreement as a Business Combination; and (iv) resolved to recommend to the stockholders of SPAC approval of the Transactions and the SPAC Stockholder Matters.
(d) The board of directors of Merger Sub I and the managing member of Merger Sub II, by resolutions duly adopted by written consent and not subsequently rescinded or modified in any way, have unanimously: (i) determined that this Agreement and the Transactions are fair to and in the best interests of Merger Sub I’s sole stockholder and Merger Sub II’s sole and managing member, as applicable; (ii) approved the transactions contemplated by this Agreement; and (iii) resolved to recommend to the sole stockholder and sole and managing member of Merger Sub I and Merger Sub II, respectively, approval of the Transactions.
(e) To the knowledge of SPAC, the execution, delivery and performance of any Transaction Agreement by any party thereto, other than any SPAC Party or the Company and any of its Affiliates, do not and will not
44
conflict with or result in any violation of any provision of any applicable Law or Governmental Order applicable to such party or any of such party’s properties or assets.
Section 6.03. No Conflict. The execution, delivery and performance of this Agreement and any Transaction Agreement to which any SPAC Party is a party by such SPAC Party and, upon receipt of approval of the SPAC Stockholder Matters by the SPAC Stockholders, the consummation of the Transactions by any SPAC Party do not and will not (a) conflict with or violate any provision of, or result in the breach of the SPAC Organizational Documents or any organizational documents of any Subsidiaries of SPAC, (b) conflict with or result in any violation, or result in the breach of or default by SPAC under, or require any filing, registration or qualification under, any provision of any Law or Governmental Order applicable to which SPAC or any Subsidiary of SPAC is subject or by which any of their respective properties or assets are bound, (c) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the termination or acceleration of, or a right of termination, cancellation, modification, acceleration or amendment under, accelerate the performance required by, or result in the acceleration or trigger of any payment, posting of collateral (or right to require the posting of collateral), time of payment, vesting or increase in the amount of any compensation or benefit payable pursuant to, any of the terms, conditions or provisions of any Contract to which SPAC or any Subsidiaries of SPAC is a party or by which any of their respective assets or properties may be bound or affected, (d) result in the creation of any Lien upon any of the properties or assets of SPAC or any Subsidiaries of SPAC, (e) constitute an event which, after notice or lapse of time or both, would result in any such violation, breach, termination, acceleration, modification, cancellation or creation of a Lien other than Permitted Liens, or (f) result in a violation or revocation of any license, permit or approval from any Governmental Authority, except (in the case of clauses (b), (c), (d), (e) or (f) above) for such violations, conflicts, breaches or defaults which would not, individually or in the aggregate, reasonably be expected to have a SPAC Material Adverse Effect.
Section 6.04. Compliance With Laws. The SPAC Parties are and have been in material compliance with all applicable Laws and Governmental Orders. No SPAC Party has received any written notice of any material violations of applicable Laws, Governmental Orders or Permits, and to the knowledge of the SPAC Parties, no charge, claim, assertion or Action of any material violation of any Law, Governmental Order or material Permit by the SPAC Parties is currently threatened against the SPAC Parties. To the knowledge of the SPAC Parties, as of the date of this Agreement (1) no material investigation or review by any Governmental Authority with respect to the SPAC Parties is pending or threatened, and (2) no such investigations have been conducted by any Governmental Authority, other than those the outcome of which did not, individually or in the aggregate, result in material liability to the SPAC Parties, taken as a whole.
Section 6.05. Litigationand Proceedings. There are no pending or, to the knowledge of SPAC, threatened, Actions and, to the knowledge of SPAC, there are no pending or threatened investigations or other inquiries, in each case, against any SPAC Party, or otherwise affecting any SPAC Party or their respective assets, including any condemnation or similar proceedings, which, if determined adversely, would, individually or in the aggregate, reasonably be expected to have a SPAC Material Adverse Effect. There is no unsatisfied judgment or any open injunction binding upon any SPAC Party or their respective assets, which would, individually or in the aggregate, reasonably be expected to have a SPAC Material Adverse Effect.
Section 6.06. Governmental Authorities; Consents. No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority is required on the part of any SPAC Party with respect to the execution or delivery of this Agreement by each SPAC Party or any Transaction Agreement to which any of the SPAC Parties is a party, as applicable, or the consummation of the Transactions, except for applicable requirements of the HSR Act, any Antitrust Laws, National Security Laws, Securities Laws, the Stock Exchange, Part 12 of the Cayman Companies Act with respect to the Domestication, the filing of the First Certificate of Merger in accordance with the DGCL, and the filing of the Second Certificate of Merger in accordance with the DGCL and the DLLCA.
45
Section 6.07. Financial Ability; Trust Account.
(a) As of the date hereof, there is at least $416,108,095.93 invested in a trust account (the “Trust Account”), maintained by Continental Stock Transfer & Trust Company, a New York limited purpose trust company, acting as trustee (the “Trustee”), pursuant to the Investment Management Trust Agreement, dated May 13, 2025, by and between SPAC and the Trustee on file with the SEC Reports of SPAC as of the date of this Agreement (the “Trust Agreement”). Prior to the Closing, none of the funds held in the Trust Account may be released except in accordance with the Trust Agreement, SPAC Organizational Documents and SPAC’s final prospectus filed with the SEC on May 15, 2025. Amounts in the Trust Account are invested in United States government securities, cash (including demand deposit accounts) or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended. SPAC has performed all material obligations required to be performed by it to date under, and is not in default, breach or delinquent in performance or any other respect (claimed or actual) in connection with, the Trust Agreement, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default or breach thereunder. As of the date hereof, there are no claims or proceedings pending, or to SPAC’s knowledge, threatened, with respect to the Trust Account. Since May 15, 2025, SPAC has not released any money from the Trust Account (other than Permitted Withdrawals). As of the First Effective Time, the obligations of SPAC to dissolve or liquidate pursuant to the SPAC Organizational Documents shall terminate, and, as of the First Effective Time, SPAC shall have no obligation whatsoever pursuant to the SPAC Organizational Documents to dissolve and liquidate the assets of SPAC by reason of the consummation of the Transactions. To SPAC’s knowledge, as of the date hereof, following the First Effective Time, no stockholder of SPAC shall be entitled to receive any amount from the Trust Account except to the extent such stockholder shall have elected to tender its shares of SPAC Common Stock for redemption pursuant to the SPAC Stockholder Redemption. The Trust Agreement is in full force and effect and is a legal, valid and binding obligation of SPAC and, to the knowledge of SPAC, the Trustee, enforceable in accordance with its terms, subject to the Enforceability Exceptions. The Trust Agreement has not been terminated, repudiated, rescinded, amended or supplemented or modified, in any respect, and, to the knowledge of SPAC, no such termination, repudiation, rescission, amendment, supplement or modification is contemplated. There are no side letters and there are no Contracts, arrangements or understandings, whether written or oral, or express or implied, with the Trustee or any other Person that would (i) cause the description of the Trust Agreement in the SEC Reports to be inaccurate or (ii) entitle any Person (other than stockholders of SPAC who shall have elected to redeem their shares of SPAC Common Stock pursuant to the SPAC Stockholder Redemption or the underwriters of SPAC’s initial public offering in respect of their Deferred Discount (as defined in the Trust Agreement)) to any portion of the proceeds in the Trust Account.
(b) As of the date of this Agreement, assuming the accuracy of the representations and warranties of the Company contained herein and the compliance by the Company with its respective obligations hereunder, SPAC has no reason to believe that any of the conditions to the use of funds in the Trust Account will not be satisfied or funds available in the Trust Account will not be available to SPAC on the Closing Date.
(c) As of the date of this Agreement, SPAC does not have, or have any present intention, agreement, arrangement or understanding to enter into or incur, any obligations with respect to or under any Indebtedness including any Working Capital Loans (other than the Permitted Working Capital Loan).
Section 6.08. Brokers ’ Fees. Except for the fees described on Schedule 6.08 to SPAC Disclosure Letter (including the amounts owed with respect thereto), no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee, underwriting fee, deferred underwriting fee, commission or other similar payment in connection with the transactions contemplated by this Agreement based upon arrangements made by SPAC or any of its Affiliates, including Sponsor.
Section 6.09. SEC Reports; Financial Statements; Sarbanes-Oxley Act; Undisclosed Liabilities.
(a) SPAC has filed or furnished in a timely manner all required registration statements, reports, schedules, forms, statements and other documents required to be filed or furnished by it with the SEC since May 15, 2025
46
(collectively, as they have been supplemented, amended or modified since the time of their filing and including all exhibits and schedules thereto and other information incorporated therein, the “SEC Reports”). Each of the SEC Reports, as of their respective dates of filing (or if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), complied in all material respects with the applicable requirements of applicable Securities Laws. None of the SEC Reports, as of their respective dates (or if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements (including, in each case, the notes and schedules thereto) included in the SEC Reports complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q of the SEC) and fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all material respects the financial position of SPAC as of the respective dates thereof and the results of their operations and cash flows for the respective periods then ended. No SPAC Party has any material off-balance sheet arrangements that are not disclosed in the SEC Reports. None of the Additional SEC Reports will contain, as of their respective dates (or if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
(b) SPAC has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to SPAC is made known to SPAC’s principal executive officer and its principal financial officer, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. To SPAC’s knowledge, such disclosure controls and procedures are effective in timely alerting SPAC’s principal executive officer and principal financial officer to material information required to be included in SPAC’s periodic reports required under the Exchange Act.
(c) SPAC has established and maintained a system of internal controls that are sufficient to provide reasonable assurance regarding the reliability of SPAC’s financial reporting and the preparation of SPAC’s financial statements for external purposes in accordance with GAAP.
(d) There are no outstanding loans or other extensions of credit made by SPAC to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of SPAC. SPAC has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(e) Except as described in the SEC Reports, neither SPAC (including any employee thereof) nor SPAC’s independent auditors has identified or been made aware of (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by SPAC, (ii) any fraud, whether or not material, that involves SPAC’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by SPAC, or (iii) any claim or allegation regarding any of the foregoing.
(f) To the knowledge of SPAC, as of the date of this Agreement, there are no outstanding SEC comments from the SEC with respect to the SEC Reports. To the knowledge of SPAC, none of the SEC Reports filed on or prior to the date hereof is subject to ongoing SEC review or investigation as of the date hereof.
Section 6.10. Business Activities.
(a) Since its incorporation, SPAC has not conducted any business activities other than activities directed toward the accomplishment of a Business Combination. Except as set forth in the SPAC Organizational
47
Documents, there is no agreement, commitment, or Governmental Order binding upon SPAC or to which SPAC is a party which has or would reasonably be expected to have the effect of prohibiting or impairing any business practice of SPAC or any acquisition of property by SPAC or the conduct of business by SPAC as currently conducted or as contemplated to be conducted as of the Closing other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a SPAC Material Adverse Effect of the type described in clause (i) of the definition thereof. Merger Sub I and Merger Sub II were formed solely for the purpose of engaging in the Transactions, have not conducted any business prior to the date hereof and have no assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to this Agreement and any Transaction Agreement to which it is a party, as applicable, and the Transactions, as applicable.
(b) SPAC does not own or have a right to acquire, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, joint venture, business, trust or other entity. Except for this Agreement and the Transactions, neither SPAC nor any of its Subsidiaries has any interests, rights, obligations or liabilities with respect to, or is party to, bound by or has its assets or property subject to, in each case whether directly or indirectly, any Contract or transaction which is, or would reasonably be interpreted as constituting, a Business Combination.
(c) Except for this Agreement and the agreements expressly contemplated hereby including any agreements permitted by Section 8.03 or as set forth on Schedule 6.10(c) to the SPAC Disclosure Letter, no SPAC Party is, and at no time has been, party to any Contract with any other Person that would require payments by any SPAC Party in excess of $30,000 monthly, $100,000 in the aggregate with respect to any individual Contract or more than $500,000 in the aggregate when taken together with all other Contracts, other than this Agreement and the agreements expressly contemplated hereby (including any agreements permitted by Section 8.03 and Contracts set forth on Schedule 6.10(c) to the SPAC Disclosure Letter).
(d) There is no liability, debt or obligation against SPAC or its Subsidiaries, except for liabilities and obligations (i) reflected or reserved for on SPAC’s consolidated balance sheet as of June 30, 2025 or disclosed in the notes thereto (other than any such liabilities not reflected, reserved or disclosed as are not and would not be, in the aggregate, material to SPAC and its Subsidiaries, taken as a whole), (ii) that have arisen since the date of SPAC’s consolidated balance sheet as of June 30, 2025 in the ordinary course of the operation of business of SPAC and its Subsidiaries (other than any such liabilities as are not and would not be, in the aggregate, material to SPAC and its Subsidiaries, taken as a whole), (iii) disclosed in the Schedules, or (iv) incurred in connection with or contemplated by this Agreement and/or the Transactions.
Section 6.11. Tax Matters. Except as would not reasonably be expected to have a SPAC Material Adverse Effect:
(a) All material Tax Returns required by Law to be filed by SPAC or its Subsidiaries (taking into account any applicable extensions) have been filed, and all such Tax Returns are true, correct and complete in all material respects.
(b) All material amounts of Taxes due and owing by SPAC and its Subsidiaries have been paid, other than Taxes described in clause (iii) of the definition of Permitted Liens. The audited financial statements and unaudited interim financial statements included in the SEC Reports reflects, in accordance with GAAP, all material unpaid Taxes of the Company and its Subsidiaries for periods (or portions of periods) through July 31, 2025. Since July 31, 2025, neither SPAC nor any of its Subsidiaries have incurred any material Tax liability outside the ordinary course of business other than Taxes resulting from the Transactions.
(c) Each of SPAC and its Subsidiaries (i) has withheld and deducted all material amounts of Taxes required to have been withheld or deducted by it in connection with amounts paid or owed to any employee, independent contractor, creditor, stockholder or any other third party, (ii) to the extent required, has remitted, or will remit on
48
a timely basis, such amounts to the appropriate Governmental Authority, and (iii) has complied in all material respects with applicable Law with respect to Tax withholding, including all reporting and record keeping requirements.
(d) Neither SPAC nor any of its Subsidiaries is currently engaged in any material audit, administrative proceeding or judicial proceeding with respect to Taxes. Neither SPAC nor any of its Subsidiaries has not received any written notice from any Governmental Authority of a dispute or claim with respect to a material amount of Taxes, other than disputes or claims that have since been resolved and, to the knowledge of SPAC, no such claims have been threatened in writing.
(e) No written claim has been made by any Governmental Authority in a jurisdiction where SPAC or any of its Subsidiaries does not file a Tax Return that such entity is or may be subject to Tax in that jurisdiction in respect of Taxes that would be the subject of such Tax Return, which claim has not been resolved.
(f) There are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection or assessment or reassessment of, material Taxes of SPAC or any of its Subsidiaries (other than ordinary course extensions of time to file Tax Returns) and no written request for any such waiver or extension is currently pending.
(g) Neither SPAC nor of its Subsidiaries (or any predecessor thereof) has constituted a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the two (2) years prior to the date of this Agreement.
(h) Neither SPAC nor any of its Subsidiaries has been a party to any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).
(i) Except with respect to deferred revenue collected by SPAC and its Subsidiaries in the ordinary course of business, neither SPAC nor any of its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date and made prior to the Closing; (ii) any “closing agreement” with respect to Taxes with a Governmental Authority executed on or prior to the Closing; (iii) installment sale or open transaction disposition made on or prior to the Closing; or (iv) prepaid amount received on or prior to the Closing.
(j) There are no Liens with respect to Taxes on any of the assets of SPAC or its Subsidiaries, other than Permitted Liens.
(k) Neither SPAC nor any of its Subsidiaries has any material liability for the Taxes of any Person (other than SPAC or its Subsidiaries) (i) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or non-U.S. Law), (ii) as a transferee or successor or (iii) by Contract or otherwise (except, in each case, for liabilities pursuant to commercial agreements not primarily relating to Taxes).
(l) Neither SPAC nor any of its Subsidiaries is a party to, or bound by, or has any obligation to any Governmental Authority or other Person (other than SPAC or its Subsidiaries) under any Tax allocation, Tax sharing, Tax indemnification or similar agreements (except, in each case, for any such agreements that are commercial agreements not primarily relating to Taxes).
(m) As of the Closing Date, SPAC is a domestic corporation for U.S. federal income tax purposes.
(n) SPAC and its Subsidiaries have not taken any action, and none of SPAC or any of its Subsidiaries is aware of any fact or circumstance, that would reasonably be expected to prevent the Mergers from qualifying for the Intended Tax Treatment.
49
(o) All of the equity interests in each of Merger Sub I and Merger Sub II are owned by SPAC. Merger Sub II is, and has been since formation, a disregarded entity that is disregarded as separate from SPAC for U.S. federal income tax purposes and has not taken (and does not plan to take) any actions that could cause it to be treated as anything other than a disregarded entity for U.S. federal income tax purposes. The Merger Subs are newly formed solely to effect the Mergers and they have not conducted any business activities or other operations of any kind (other than administrative or ministerial activities) prior to the Mergers.
(p) SPAC has not been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
Section 6.12. Employees. Other than any officers as described in the SEC Reports, the SPAC Parties have no and have never had any employees on their payroll, and have never retained any contractors, other than professional consultants and professional advisors. Other than reimbursement of any out-of-pocket expenses incurred by SPAC’s officers and directors in connection with activities on SPAC’s behalf in an aggregate amount not in excess of the amount of cash held by SPAC outside of the Trust Account, SPAC has no unsatisfied material liability with respect to any officer or director. The SPAC Parties have never and do not currently maintain, sponsor, or contribute to any employee benefit plan.
Section 6.13. Capitalization.
(a) As of the date of this Agreement, the authorized share capital is $55,500 divided into (i) 500,000,000 SPAC Class A Ordinary Shares, (ii) 50,000,000 SPAC Class B Ordinary Shares and (iii) 5,000,000 SPAC Preferred Shares of which (A) 41,700,000 SPAC Class A Ordinary Shares are issued and outstanding (inclusive of SPAC Class A Ordinary Shares included in any outstanding public or private placement Cayman SPAC Units) as of the date of this Agreement, (B) 10,350,000 SPAC Class B Ordinary Shares are issued and outstanding as of the date of this Agreement and (C) no shares of SPAC Preferred Shares are issued and outstanding as of the date of this Agreement. All of the issued and outstanding shares described in clauses (A) and (B) and the Cayman SPAC Units (1) have been duly authorized and validly issued and are fully paid and nonassessable, (2) were issued in compliance in all material respects with applicable Law, (3) were not issued in breach or violation of any purchase option, right of first refusal, preemptive right, subscription right (or any similar right) or Contract and (4) are fully vested and not otherwise subject to a substantial risk of forfeiture within the meaning of Section 83 of the Code, except as disclosed in the SEC Reports with respect to certain SPAC Class B Ordinary Shares held by Sponsor.
(b) Upon the completion of the Mergers the authorized capital stock of SPAC will be as set forth in the SPAC Charter Upon Domestication.
(c) Subject to the terms and conditions of the Warrant Agreement and in connection with the Domestication, the Cayman SPAC Warrants will be converted into Domesticated SPAC Warrants. The Domesticated SPAC Warrants will be exercisable after giving effect to the Transactions for one share of SPAC Common Stock at an exercise price of $11.50 per share. 10,425,000 Cayman SPAC Warrants (inclusive of Cayman SPAC Warrants included in any outstanding public or private placement Cayman SPAC Units), consisting of 10,350,000 public warrants (inclusive of those included in any outstanding public Cayman SPAC Units) and 75,000 private placement warrants (inclusive of those included in any private placement Cayman SPAC Units) are issued and outstanding. All outstanding Cayman SPAC Warrants (i) have been duly authorized and validly issued and are fully paid and nonassessable, (ii) were issued in compliance in all material respects with applicable Law, and (iii) were not issued in breach or violation of any purchase option, right of first refusal, preemptive right, subscription right (or any similar right) or Contract.
(d) As of the date hereof, other than the Cayman SPAC Warrants, there are (i) no subscriptions, calls, options, warrants, rights or other securities convertible into or exchangeable or exercisable for shares of SPAC Common Stock or the equity interests of SPAC, or any other Contracts to which SPAC is a party or by which
50
SPAC is bound obligating SPAC to issue or sell any shares of capital stock of, other equity interests in or debt securities of, SPAC, and (ii) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in SPAC. Except as provided for in the SPAC Organizational Documents or in the Sponsor Agreement, there are no outstanding contractual obligations of SPAC to repurchase, redeem or otherwise acquire any securities or equity interests of SPAC. There are no outstanding bonds, debentures, notes or other Indebtedness of SPAC having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which the SPAC Stockholders may vote. Except as disclosed in the SEC Reports, SPAC is not a party to any stockholders agreement, voting agreement or registration rights agreement relating to SPAC Common Stock or any other equity interests of SPAC. SPAC does not own any capital stock or any other equity interests in any other Person or has any right, option, warrant, conversion right, stock appreciation right, redemption right, repurchase right, agreement, arrangement or commitment of any character under which a Person is or may become obligated to issue or sell, or give any right to subscribe for or acquire, or in any way dispose of, any shares of the capital stock or other equity interests, or any securities or obligations exercisable or exchangeable for or convertible into any shares of the capital stock or other equity interests, of such Person.
(e) No Person and no syndicate or “group” (as defined in the Exchange Act and the rules thereunder) of a Person owns directly or indirectly beneficial ownership (as defined in the Exchange Act and the rules thereunder) of securities of SPAC representing thirty-five percent (35%) or more of the combined voting power of the issued and outstanding securities of SPAC.
Section 6.14. Nasdaq Stock Market Listing. The issued and outstanding SPAC Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the Nasdaq under the symbol “CCCX”. The issued and outstanding shares of Cayman SPAC Warrants are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the Nasdaq under the symbol “CCCXW”. The issued and outstanding Cayman SPAC Units are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the Nasdaq under the symbol “CCCXU”. SPAC is in compliance with the rules of the Nasdaq and there is no Action pending or, to the knowledge of SPAC, threatened against SPAC by the Nasdaq or the SEC with respect to any intention by such entity to deregister the SPAC Common Stock, Cayman SPAC Warrants or the Cayman SPAC Units or terminate the listing of SPAC Common Stock, Cayman SPAC Warrants or the Cayman SPAC Units on the Nasdaq. None of SPAC or its Affiliates has taken any action in an attempt to terminate the registration of the SPAC Common Stock, Cayman SPAC Warrants or the Cayman SPAC Units under the Exchange Act except as contemplated by this Agreement. SPAC has not received any notice from the Nasdaq or the SEC regarding the revocation of such listing or otherwise regarding the delisting of the SPAC Common Stock, Cayman SPAC Warrants or the Cayman SPAC Units from the Nasdaq or the SEC.
Section 6.15. Sponsor Agreement. SPAC has delivered to the Company a true, correct and complete copy of the Sponsor Agreement. The Sponsor Agreement is in full force and effect and has not been withdrawn or terminated, or otherwise amended or modified, in any respect, and no withdrawal, termination, amendment or modification is contemplated by SPAC. The Sponsor Agreement is a legal, valid and binding obligation of SPAC and, to the knowledge of SPAC, each other party thereto and neither the execution or delivery by any party thereto, nor the performance of any party’s obligations under, the Sponsor Agreement violates any provision of, or results in the breach of or default under, or require any filing, registration or qualification under, any applicable Law. No event has occurred that, with or without notice, lapse of time or both, would constitute a default or breach on the part of SPAC under any material term or condition of the Sponsor Agreement.
Section 6.16. Related PartyTransactions. Except as set forth in Section 6.16 of the SPAC Disclosure Letter, there are no transactions, Contracts, side letters, arrangements or understandings between any SPAC Party, on the one hand, and any former or present director or officer, employee, stockholder or Affiliate of such SPAC Party.
Section 6.17. Investment Company Act. Neither SPAC nor any of its Subsidiaries is an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company” or required to register as an “investment company”, in each case within the meaning of the Investment Company Act of 1940, as amended.
51
Section 6.18. Sanctions. None of the SPAC Parties, nor any of their respective officers, directors, employees, agents, stockholders or partners, is a Sanctioned Party.
Section 6.19. CFIUS Foreign PersonStatus. None of the SPAC Parties nor holders of SPAC Shares (i) is a “foreign person” within the meaning of the Defense Production Act of 1950, as amended, including all implementing regulations thereof (the “DPA”), (ii) is “controlled” by a foreign person within the meaning of the DPA, nor (iii) permits or will permit any foreign person affiliate – whether affiliated as a limited partner or otherwise – to obtain through it any of the following with respect to the Company and within the meaning of the DPA: (a) access to any “material nonpublic technical information” in the possession of the Company; (b) membership or observer rights on the Company Board or equivalent governing body of the Company or the right to nominate an individual to a position on the Company Board or equivalent governing body of the Company; (c) any “involvement,” other than through the voting of shares, in the “substantive decisionmaking” of the Company regarding (i) the use, development, acquisition, or release of “critical technology”; (ii) the use, development, acquisition, safekeeping, or release of “sensitive personal data” of U.S. citizens maintained or collected by the Company; or (iii) the management, operation, manufacture or supply of “covered investment critical infrastructure”; or (d) “control” of the Company.
Section 6.20. Data Security Program Status. Each of the SPAC Parties is not a “covered person,” as defined in the Data Security Program.
Section 6.21. Outbound Investment Security ProgramStatus. Each of the SPAC Parties is not a “person of a country of concern” within the meaning of the Outbound Investment Security Program.
Section 6.22. Registration Statement and Proxy Statement ; Additional SEC Reports.
(a) At the First Effective Time, the Registration Statement, and when first filed in accordance with Rule 424(b) or filed pursuant to Section 14A, the Proxy Statement (or any amendment or supplement thereto), will comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act. On the date of any filing pursuant to Rule 424(b) or Section 14A, the date the Proxy Statement is first mailed to SPAC Stockholders, and at the time of the Special Meeting, the Proxy Statement (together with any amendments or supplements thereto) will not include any untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that SPAC makes no representations or warranties as to the information contained in or omitted from the Registration Statement or Proxy Statement in reliance upon and in conformity with information furnished in writing to SPAC by or on behalf of the Company or any of their Affiliates specifically for inclusion in the Registration Statement or the Proxy Statement.
(b) Each of the Additional SEC Reports, as of their respective dates of filing (or, if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), will comply in all material respects with the applicable requirements of applicable Securities Laws. None of the Additional SEC Reports, as of their respective dates (or, if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; provided, however, that SPAC makes no representations or warranties as to the information contained in or omitted from any Additional SEC Reports in reliance upon or in conformity with information furnished in writing to SPAC by or on behalf of the Company or any of their Affiliates specifically for inclusion or incorporation by reference in the Additional SEC Reports.
Section 6.23. Fairness Opinion. The board of directors of SPAC has received the opinion of Ocean Tomo, a part of J.S. Held, to the effect that, as of the date of such opinion and subject to the assumptions, limitations, qualifications and other conditions contained therein, the Merger Consideration is fair, from a financial point of view, to the SPAC Stockholders (other than the Sponsor).
52
Section 6.24. No Outside Reliance. Notwithstanding anything contained in this ARTICLE 6 or any other provision hereof, each of SPAC Parties, and any of their respective directors, managers, officers, employees, equityholders, partners, members or representatives, acknowledge and agree that the SPAC has made its own investigation of the Company and that neither the Company nor any of its Affiliates, agents or representatives is making any representation or warranty whatsoever, express or implied, beyond those expressly given by the Company in ARTICLE 5, including any implied warranty or representation as to condition, merchantability, suitability or fitness for a particular purpose or trade as to any of the assets of the Company or its Subsidiaries. Without limiting the generality of the foregoing, it is understood that any cost estimates, financial or other projections or other predictions that may be contained or referred to in the Company Disclosure Letter or elsewhere, as well as any information, documents or other materials (including any such materials contained in any “data room” (whether or not accessed by the SPAC or its representatives) or reviewed by SPAC pursuant to the Confidentiality Agreement) or management presentations that have been or shall hereafter be provided to SPAC or any of its Affiliates, agents or representatives are not and will not be deemed to be representations or warranties of the Company, and no representation or warranty is made as to the accuracy or completeness of any of the foregoing except as may be expressly set forth in ARTICLE 5 of this Agreement. Except as otherwise expressly set forth in this Agreement, SPAC understands and agrees that any assets, properties and business of the Company and its Subsidiaries are furnished “as is”, “where is” and subject to and except as otherwise provided in the representations and warranties contained in ARTICLE 5, with all faults and without any other representation or warranty of any nature whatsoever.
ARTICLE 7
COVENANTS OF THE COMPANY
Section 7.01. Conduct of Business. From the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms (the “Interim Period”), the Company shall, and shall cause its Subsidiaries to, except (i) as expressly contemplated by this Agreement, (ii) as required by applicable Law or any Governmental Authority, (iii) as set forth on Schedule 7.01 to the Company Disclosure Letter, or (iv) as consented to by SPAC (which consent shall not be unreasonably conditioned, withheld, delayed or denied), use its commercially reasonable efforts to operate its business in all material respects in the ordinary course of business. Without limiting the generality of the foregoing, except (i) as contemplated by this Agreement, (ii) as required by applicable Law or any Governmental Authority, (iii) as set forth on Schedule 7.01 to the Company Disclosure Letter, or (iv) as consented to by SPAC in writing (which consent shall, except in the case of clause (d), not be unreasonably conditioned, withheld, delayed or denied), the Company shall not, and the Company shall cause its Subsidiaries not to, during the Interim Period, except as otherwise contemplated by this Agreement:
(a) change or amend the Company Certificate of Incorporation or other organizational documents of the Company, except as (i) otherwise required by Law, (ii) required in order to effectuate the conversion of Company Preferred Stock into Company Common Stock, or (iii) in connection with a PIPE Investment;
(b) make, declare, set aside, establish a record date for or pay any dividend or distribution, other than any dividends or distributions from any wholly-owned Subsidiary of the Company to the Company or any other wholly-owned Subsidiaries of the Company;
(c) enter into, assume, assign, partially or completely amend any material term of, modify any material term of or terminate (excluding any expiration in accordance with its terms) any Labor Contract to which the Company or its Subsidiaries is a party or by which it is bound, other than entry into such agreements in the ordinary course of business;
(d) other than seeking and negotiating PIPE Subscription Agreements, (i) issue, deliver, sell, transfer, pledge, dispose of or place any Lien (other than a Permitted Lien) on any shares or any other equity or voting securities of the Company or any of its Subsidiaries or (ii) issue or grant any options, warrants, Company
53
Convertible Securities or other rights to purchase, convert into, exchange for or otherwise obtain any shares or any other equity or voting securities of the Company, or amend, modify or waive the terms of any of the foregoing, in each case other than (A) those issuances of Company Options to eligible recipients set forth on Schedule 7.01(d) of the Company Disclosure Letter, in each case pursuant to the 2017 Plan, (B) issuances of shares of Company Common Stock upon the exercise of Company Options, or the conversion of Company Preferred Stock, in each case that are outstanding on the date of this Agreement or issued or granted thereafter in compliance with the terms of this Agreement, and in the case of Company Options, in accordance with the terms of the 2017 Plan and award agreement, or (C) in connection with a PIPE Investment;
(e) sell, assign, transfer, convey, lease, license, abandon, allow to lapse or expire, subject to or grant any Lien (other than Permitted Liens) on, or otherwise dispose of, any material Owned Intellectual Property or material assets, rights, Technology or properties of the Company and its Subsidiaries, taken as a whole, other than the sale or non-exclusive license of Software, goods, products and services to customers in the ordinary course of business, non-exclusive licenses to service providers in connection with provision of services to the Company and its Subsidiaries in the ordinary course of business, or the sale, non-exclusive license or other disposition of Technology or equipment deemed by the Company in its reasonable business judgement to be obsolete or not material to the business of the Company and its Subsidiaries, in each case, in the ordinary course of business;
(f) (i) cancel or compromise any claim or Indebtedness owed to the Company or any of its Subsidiaries, (ii) settle any pending or threatened Action, (A) if such settlement would require payment by the Company in an amount greater than $500,000, (B) to the extent such settlement includes an agreement to accept or concede injunctive relief, or (C) to the extent such settlement involves a Governmental Authority (unless such settlement would not reasonably be expected to be materially adverse to the Company) or alleged criminal wrongdoing, or (iii) agree to modify in any respect materially adverse to the Company and its Subsidiaries any confidentiality or similar Contract to which the Company or any of its Subsidiaries are a party;
(g) directly or indirectly acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by purchasing all of or a substantial equity interest in, or by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof in a transaction that would be material to the Company and its Subsidiaries, taken as a whole;
(h) make any loans or advance any money or other property to any Person, except for (i) advances in the ordinary course of business to employees or officers of the Company or any of its Subsidiaries for expenses not to exceed $500,000 in the aggregate and (ii) prepayments made to suppliers of the Company or any of its Subsidiaries;
(i) enter into, assume, assign, or amend any material term of or terminate (excluding any expiration in accordance with its terms) any Material Contract (or any Contract that would constitute a Material Contract if in effect on the date hereof), other than entry into such agreements in the ordinary course of business; provided, that neither the Company nor any Subsidiary thereof shall modify, amend, renew, extend, terminate or enter into any Material Contract (or any Contract that would constitute a Material Contract if in effect on the date hereof) if the effect thereof would be to (i) impose any material restrictions on the right or ability of the Company or any Subsidiary thereof to engage in any line of business or compete with, or provide services to, any other Person or in any geographic area, (ii) grant any exclusive rights to license, market, sell or deliver any material product, service or Owned Intellectual Property of the Company or any Subsidiary thereof, (iii) require the Company or any Subsidiary thereof to exclusively purchase any material inventory, products, or services from such Person, or (iv) grant any “most favored nation” or similar provision in favor of the other party or a right of first refusal, first offer or first negotiation binding upon the Company or any Subsidiary thereof that, in each case, is material to the Company;
(j) redeem, purchase or otherwise acquire, any shares or stock (as applicable) (or other equity interests) of the Company or any of its Subsidiaries or any securities or obligations convertible (whether currently convertible
54
or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares or stock (as applicable) (or other equity interests) of the Company or any of its Subsidiaries (including, for the avoidance of doubt, in satisfaction of the exercise price or Tax withholding obligations with respect to any Company Equity Awards or other equity securities of the Company outstanding as of the date hereof or issued or granted thereafter in compliance with the terms of this Agreement), except pursuant to exercises (excluding, for the avoidance of doubt, the exercise of redemption rights), conversion, settlement or cancellations of equity securities of the Company outstanding as of the date hereof or issued or granted thereafter in compliance with the terms of this Agreement, repurchase or redemption of any Company Restricted Stock Awards following a termination of employment or service of a current or former Company Service Provider, in each case in accordance with the terms of such securities, the 2017 Plan, and/or award agreement in effect as of the date hereof;
(k) split, combine, subdivide, recapitalize or reclassify any shares or other equity interests or securities of the Company;
(l) make any change in its customary accounting principles or methods of accounting materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Subsidiaries, other than as may be required by applicable Law, GAAP or regulatory guidelines or interpretations thereof;
(m) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or its Subsidiaries (other than the First Merger and Second Merger and the transactions contemplated by this Agreement);
(n) make, change or revoke any material Tax election, adopt or change any material accounting method with respect to Taxes, file any amended material Tax Return, settle or compromise any material Tax liability, enter into any material closing agreement with respect to any Tax, consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than ordinary course extensions of time to file Tax Returns), or enter into any Tax sharing or Tax indemnification agreement or similar agreement (except, in each case, for such agreements that are commercial agreements not primarily relating to Taxes) or take any similar action relating to Taxes, if such election, change, amendment, agreement, settlement, consent or other action would have the effect of materially increasing the present or future Tax liability of the Company or any of its Subsidiaries in a manner that will disproportionately affect the SPAC Stockholders (as compared to the Company’s stockholders) after the Closing;
(o) take or cause to be taken any action, or knowingly fail to take or cause to be taken any action, which action or failure to act would reasonably be expected to prevent or impede the Mergers from qualifying for the Intended Tax Treatment;
(p) (i) modify in any material respect the terms of, any Indebtedness, (ii) issue any debt securities, or (iii) incur or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for Indebtedness for borrowed money in excess of $1,000,000 in the aggregate (other than Indebtedness under capital leases entered into in the ordinary course of business);
(q) voluntarily fail to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practices (except that the Company shall be authorized to replace existing insurance policies with substantially comparable amounts of insurance coverage);
(r) enter into any transaction or amend in any material respect any existing agreement with any Person that, to the knowledge of the Company, is an Affiliate of the Company or its Subsidiaries (excluding ordinary course Company Benefit Plans, Standard Employment Agreements and payments of annual compensation, provision of benefits or reimbursement of expenses in respect of stockholders who are officers or directors of the Company or its Subsidiaries);
55
(s) other than in the ordinary course of business or as required by an existing Company Benefit Plan, Standard Employment Agreement, Labor Contract, or applicable Law, (i) increase the compensation or benefits of any Company Service Provider or accelerate the vesting or lapsing of restrictions or payment, or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan other than payments of compensation or benefits that are immaterial, (ii) establish, adopt, enter into, materially amend in any respect or terminate any material Company Benefit Plan or any plan, agreement, program, policy or other arrangement that would be a material Company Benefit Plan if it were in existence as of the date of this Agreement, (iii) except as provided in Section 7.01(s) of the Company Disclosure Letter, hire or terminate without “cause” (as determined consistent with past practice) the employment of any Company Employee with the title of Chief Executive Officer, Chief Financial Officer, Vice President and General Manager of Computing, Chief Operating Officer, Chief Technology Officer, Chief Legal Officer or Chief Scientist for Quantum Information, (iv) implement or announce any employee layoffs, furloughs, or reductions in force, in each case that would require notice or pay in lieu of notice under the WARN Act, or (vi) recognize or certify any Labor Union as the bargaining representative for any Company Service Provider or become a party to, establish, adopt, amend, commence participation in or terminate any Labor Contract with a Labor Union;
(t) make any capital expenditures (or series of related capital expenditures) other than in an amount not in excess of the amount set forth of Section 7.01(t) of the Company Disclosure Letter;
(u) enter into any engagement letters with (i) financial advisors or (ii) capital markets advisors; and
(v) enter into any Contract to do any action prohibited under this Section 7.01.
Section 7.02. Inspection. Subject to confidentiality obligations and similar restrictions that may be applicable to information furnished to the Company or any of its Subsidiaries by third parties that may be in the Company’s or any of its Subsidiaries’ possession from time to time, and except for any information which (i) relates to interactions with prospective buyers of the Company or the negotiation of this Agreement or the Transactions, including with respect to the consideration or valuation of the Mergers or any financial or strategic alternatives thereto, or any Acquisition Transaction, (ii) is prohibited from being disclosed by applicable Law, (iii) is subject to statutory non-disclosure or similar provisions, or that is subject to a non-disclosure agreement with a third party or protection as a trade secret, or (iv) on the advice of legal counsel of the Company would result in the loss of attorney-client privilege or other privilege from disclosure, the Company shall, and shall cause its Subsidiaries to, afford to SPAC and its Representatives reasonable access during the Interim Period, during normal business hours and with reasonable advance notice, in such manner as to not interfere with the normal operation of the Company and its Subsidiaries and so long as reasonably feasible or permissible under applicable Law, to all of their respective properties, books, Contracts, commitments, records and appropriate officers and employees of the Company and its Subsidiaries, and shall use its and their commercially reasonable efforts to furnish such Representatives with all financial and operating data and other information concerning the affairs of the Company and its Subsidiaries that are in the possession of the Company or its Subsidiaries, in each case, as SPAC and its Representatives may reasonably request solely for purposes of consummating the Transactions; provided, however, that SPAC shall not be permitted to perform any environmental sampling at any Leased Real Property, including sampling of soil, groundwater, surface water, building materials, or air or wastewater emissions. The Parties shall use commercially reasonable efforts to make alternative arrangements for such disclosure where the restrictions in the preceding sentence apply. Any request pursuant to this Section 7.02 shall be made in a time and manner so as not to delay the Closing. All information obtained by SPAC and its Representatives under this Agreement shall be subject to the Confidentiality Agreement prior to the Closing.
Section 7.03. HSR Act and Regulatory Approvals.
(a) In connection with the transactions contemplated by this Agreement, the Company shall (and, to the extent required, shall cause its Affiliates to) comply promptly but in no event later than twenty (20) Business
56
Days after the date hereof with the notification and reporting requirements of the HSR Act; provided that, in the event the Federal Trade Commission and/or the U.S. Department of Justice is closed or not accepting such filings under the HSR Act (a “Government Closure”), such days shall be extended day-for-day, for each Business Day the Government Closure is in effect. The Company shall (i) use its reasonable best efforts to substantially comply with any Information or Document Requests and (ii) request early termination of any waiting period under the HSR Act;provided, further, that all fees and expenses in connection with filing to obtain clearance pursuant to the HSR Act shall be paid by SPAC.
(b) The Company shall use reasonable best efforts to: (i) promptly furnish to SPAC copies of any notices or written communications received by the Company or any of its Affiliates from any third party or any Governmental Authority, and disclose to SPAC the nature of any material oral communications between the Company or any of its Affiliates and any such Governmental Authority, with respect to the transactions contemplated by this Agreement, and (ii) permit counsel to SPAC an opportunity to review in advance, any proposed material written communications by the Company and/or its Affiliates to any Governmental Authority, and excluding any notification and report forms filed under the HSR Act concerning the transactions contemplated by this Agreement; provided, that the Company shall not extend any waiting period or comparable period under the HSR Act or enter into any agreement with any Governmental Authority to so extend such waiting period or comparable period under the HSR Act without the written consent of SPAC. The Company agrees to provide, to the extent permitted by the applicable Governmental Authority, SPAC and its counsel the opportunity, on reasonable advance notice, to participate in any substantive meetings or discussions, either in person or by telephone, between the Company and/or any of its Affiliates, agents or advisors, on the one hand, and any Governmental Authority, on the other hand, concerning or in connection with the Transactions. Any such disclosures or provisions of information by the Company pursuant to this Section 7.03 may be redacted, withheld or made on an outside-counsel-only basis to the extent required under applicable Law or as appropriate to protect attorney-client or other privileged information or confidential business information.
(c) Without limiting the generality of the undertakings pursuant to this Section 7.03, the Company shall, contemporaneously with the submission of its notification and report forms filed under the HSR Act, submit to the Colorado Attorney General, a copy of the notification and report forms filed under the HSR Act pursuant to Colorado’s Uniform Antitrust Pre-Merger Notification Act.
Section 7.04. No Claim Against the Trust Account. The Company acknowledges that it has read SPAC’s final prospectus, filed with the SEC on May 15, 2025 and other SEC Reports, the SPAC Organizational Documents, and the Trust Agreement and understands that SPAC has established the Trust Account described therein for the benefit of SPAC’s public stockholders and that disbursements from the Trust Account are available only in the limited circumstances set forth in the Trust Agreement. The Company further acknowledges that, if the transactions contemplated by this Agreement, or, in the event of a termination of this Agreement, another Business Combination, are not consummated by May 15, 2027 (or August 15, 2027 if SPAC has an executed letter of intent, agreement in principle or definitive agreement for a Business Combination by May 15, 2027), SPAC will be obligated to return to its stockholders the amounts being held in the Trust Account. Accordingly, except in the event of a distribution from the Trust Account in connection with the consummation of a Business Combination involving SPAC, the Company (on behalf of itself and its controlled Affiliates) hereby waives any past, present or future claim of any kind against, and any right to access, the Trust Account or to collect from the Trust Account any monies that may be owed to them by SPAC or any of its Affiliates for any reason whatsoever, and will not seek recourse against the Trust Account at any time for any reason whatsoever. This Section 7.04 shall survive the termination of this Agreement for any reason; provided, that nothing herein shall serve to limit or prohibit the Company’s right to pursue a claim against SPAC or any of its Affiliates for legal relief against assets held outside the Trust Account (including from and after the consummation of a Business Combination other than as contemplated by this Agreement) or pursuant to Section 12.13 for specific performance or other injunctive relief. This Section 7.04 shall survive the termination of this Agreement for any reason.
57
Section 7.05. Proxy Solicitation; Other Actions(a) .
(a) The Company agrees to use commercially reasonable efforts to provide SPAC: (i) as soon as practicable following the date hereof, and in any event within sixty (60) days following the date hereof, (A) the financial statements set forth in items 1 and 2 on Schedule 7.05(a), (B) auditor’s reports and consents to use such financial statements and reports in the Registration Statement, as applicable, and (C) such other information regarding the Company and its Subsidiaries as is required under the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder for inclusion in the Proxy Statement; and (ii) as soon as practicable following the date hereof, the financial statements set forth on Schedule 7.05(a) other than those set forth in items 1 and 2 thereof (collectively, the “Required CompanyInformation”). The Company shall be available to, and the Company and its Subsidiaries shall use commercially reasonable efforts to make their officers and employees available, in each case, during normal business hours and upon reasonable advanced notice, to SPAC and its counsel in connection with (A) the drafting of the Registration Statement or Proxy Statement and (B) responding in a timely manner to comments on the Registration Statement or Proxy Statement from the SEC. Without limiting the generality of the foregoing, the Company shall reasonably cooperate with SPAC in connection with the preparation for inclusion in the Registration Statement or Proxy Statement of pro forma financial statements that comply with the requirements of Regulation S-X under the rules and regulations of the SEC (as interpreted by the staff of the SEC).
(b) During the Interim Period, each of SPAC and the Company shall, and shall cause its respective Representatives to, reasonably cooperate in a timely manner in connection with SPAC and its Representatives’ due diligence in connection with the Transactions, including in connection with any financing arrangement the Parties mutually agree to seek in connection with the Transactions (including any PIPE Investment), including: (i) by providing such information and assistance as the other party or its Representatives may reasonably request; (ii) granting such access to the other party and its Representatives as may be reasonably necessary for their due diligence; (iii) participating in a reasonable number of meetings, presentations, road shows, drafting sessions, and due diligence sessions with respect to such financing efforts; and (iv) using its commercially reasonable efforts to deliver or, cause its Representatives to deliver, all documents that may be reasonably required by any financial advisor or other Representative to either party, in form and substance reasonably satisfactory to such financial advisors or other Representatives to facilitate the consummation of the Transactions or any financing arrangement in connection therewith. Such documents may include customary comfort letters from the relevant party’s current or former independent auditors and legal opinions and negative assurance letters from its counsel. Such cooperation shall include direct contact between senior management and other Representatives of each party at reasonable times and locations. All such cooperation, assistance and access shall be granted during normal business hours and shall be granted under conditions that shall not unreasonably interfere with the business and operations of the providing party or its Representatives.
Section 7.06. Certain Transaction Agreements. Except to the extent provided in writing by SPAC, the Company shall not permit any amendment or modification to be made to any Company Voting and Support Agreement to the extent that such amendment or modification would reasonably be expected to materially and adversely affect the closing of the Transactions. The Company shall take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to satisfy in all material respects on a timely basis all conditions and covenants applicable to the Company in each Company Voting and Support Agreement and otherwise comply with its obligations thereunder and to enforce its rights under each such agreement, except to the extent that that the failure of the Company to enforce such rights would not reasonably be expected to materially and adversely affect the closing of the Transactions. Without limiting the generality of the foregoing, the Company shall give SPAC, prompt written notice: (a) of any breach or default (or any threatened breach or default) by any party to any Company Voting and Support Agreement known to the Company; or (b) of the receipt of any written notice or other written communication from any other party to any Company Voting and Support Agreement with respect to any actual, potential, threatened or claimed expiration, lapse, withdrawal, breach, default, termination or repudiation by any party under any such agreement or any provisions of any such agreement.
58
Section 7.07. FIRPTA. At the Closing, the Company shall deliver to SPAC (a) a properly executed certificate in such manner consistent and in accordance with the requirements of Section 1.897-2(h)(1)(i) and 1.1445-2(c)(3)(i) of the Treasury Regulations, and (b) a notice to the IRS (which shall be filed by SPAC with the IRS following the Closing) in accordance with the provisions of Section 1.897-2(h)(2) of the Treasury Regulations.
Section 7.08. Termination of Certain Agreements. The Company shall use reasonable best efforts to cause the Contracts listed on Schedule 7.08 of the Company Disclosure Letter to be terminated as of, and contingent upon the occurrence of, the Closing without any further force and effect without any cost or other liability or obligation to the Company or its Subsidiaries (as applicable), and there shall be no further obligations of any of the relevant parties thereunder following the Closing.
Section 7.09. Written Consent and A&R Registration Rights Agreement. The Company shall use commercially reasonable efforts to solicit and request that any Holders of Company Stock execute and deliver the Written Consent after the Proxy Clearance Date, in each case in accordance with applicable SEC rules and interpretations, and the Company and SPAC shall solicit and request that such Holders enter into the A&R Registration Rights Agreement (to the extent they are not already a party) prior to the Closing.
ARTICLE 8
COVENANTS OF SPAC
Section 8.01. HSR Act and Regulatory Approvals.
(a) In connection with the transactions contemplated by this Agreement, SPAC shall (and, to the extent required, shall cause its Affiliates to) comply promptly but in no event later than twenty (20) Business Days after the date hereof with the notification and reporting requirements of the HSR Act; provided that, in the event that there is a Government Closure, such days shall be extended day-for-day, for each Business Day the Government Closure is in effect. SPAC shall substantially comply with any Information or Document Requests; provided, further, that all fees and expenses in connection with filing to obtain clearance pursuant to the HSR Act shall be paid by SPAC.
(b) SPAC shall request early termination of any waiting period under the HSR Act and undertake promptly any and all action required to (i) obtain termination or expiration of the waiting period under the HSR Act, (ii) prevent the entry in any Action brought by a Regulatory Consent Authority or any other Person of any Governmental Order which would prohibit, make unlawful or delay the consummation of the transactions contemplated by this Agreement, and (iii) if any such Governmental Order is issued in any such Action, cause such Governmental Order to be lifted.
(c) In connection with the transactions contemplated by this Agreement, SPAC shall promptly but in no event later than twenty (20) Business Days make an appropriate mandatory notification to the UK Secretary of State pursuant to section 14(1) of the National Security and Investment Act 2021 (the “NSI Act”).
(d) In connection with the transactions contemplated by this Agreement, SPAC shall promptly but in no event later than twenty (20) Business Days make an appropriate mandatory notification to the Treasurer of the Commonwealth of Australia or their delegate pursuant to the Foreign Acquisitions and Takeovers Act 1975 (Cth) (the “FATA”).
(e) SPAC shall cooperate in good faith with the Regulatory Consent Authorities and undertake promptly any and all action required to complete lawfully the Transactions as soon as practicable (but in any event prior to the Termination Date) and all action necessary or advisable to avoid, prevent, eliminate or remove the actual or threatened commencement of any proceeding in any forum by or on behalf of any Regulatory Consent Authority or the issuance of any Governmental Order that would delay, enjoin, prevent, restrain or otherwise prohibit the
59
consummation of the Transactions, including (i) proffering and consenting and/or agreeing to a Governmental Order or other agreement providing for (A) the sale, licensing or other disposition, or the holding separate, of particular assets, categories of assets or lines of business of the Company or SPAC or (B) the termination, amendment or assignment of existing relationships and contractual rights and obligations of the Company or SPAC and (ii) promptly effecting the disposition, licensing or holding separate of assets or lines of business or the termination, amendment or assignment of existing relationships and contractual rights, in each case, at such time as may be necessary to permit the lawful consummation of the Transactions on or prior to the Termination Date. The entry by any Governmental Authority in any Action of a Governmental Order permitting the consummation of the Transactions but requiring any of the assets or lines of business of SPAC to be sold, licensed or otherwise disposed or held separate thereafter (including the business and assets of the Company and its Subsidiaries) shall not be deemed a failure to satisfy any condition specified in ARTICLE 10. Notwithstanding anything to the contrary, portfolio companies managed by Affiliates of SPAC are under no obligation, and SPAC is under no obligation to cause such portfolio companies to undertake any actions in this Section 8.01(e).
(f) SPAC shall promptly furnish to the Company copies of any notices or written communications received by SPAC or any of its Affiliates from any third party or any Governmental Authority, and disclose to the Company the nature of any substantive oral communications between SPAC and any Governmental Authority, with respect to the transactions contemplated by this Agreement, and SPAC shall permit counsel to the Company an opportunity to review in advance, and SPAC shall consider in good faith the views of such counsel in connection with, any proposed written communications by SPAC and/or its Affiliates to any Governmental Authority (excluding any notification and report forms filed under the HSR Act) concerning the transactions contemplated by this Agreement; provided, that SPAC shall not extend any waiting period or comparable period under the HSR Act or enter into any agreement with any Governmental Authority to so extend such waiting period or comparable period under the HSR Act without the written consent of the Company. SPAC agrees to provide the Company and its counsel the opportunity, on reasonable advance notice, to participate in any substantive meetings or discussions, either in person or by telephone, between SPAC and/or any of its Affiliates, agents or advisors, on the one hand, and any Governmental Authority, on the other hand, concerning or in connection with the Transactions. Any such disclosures or provisions of information by SPAC pursuant to this Section 8.01(f) may be redacted, withheld or made on an outside-counsel-only basis to the extent required under applicable Law or as appropriate to protect attorney-client or other privileged information or confidential business information.
(g) Except as required by this Agreement, SPAC shall not engage in any action or enter into any transaction, that would reasonably be expected to materially impair or delay SPAC’s ability to consummate the transactions contemplated by this Agreement or perform its obligations hereunder.
Section 8.02. Indemnification and Insurance.
(a) From and after the First Effective Time, SPAC agrees that it shall indemnify and hold harmless each present and former director, manager and officer of the Company and SPAC and each of their respective Subsidiaries (each an “Indemnified Person”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any Action, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the First Effective Time, whether asserted or claimed prior to, at or after the First Effective Time, to the fullest extent that the Company, SPAC or their respective Subsidiaries, as the case may be, would have been permitted under applicable Law and their respective certificate of incorporation, bylaws or other organizational documents or indemnification agreements in effect on the date of this Agreement to indemnify such Person (including the advancing of expenses as incurred to the fullest extent permitted under applicable Law). Without limiting the foregoing, SPAC shall cause the Surviving Entity and each of its Subsidiaries to, (i) maintain for a period of not less than six years from the First Effective Time provisions in its certificate of incorporation, bylaws and other organizational documents concerning the indemnification and exoneration (including
60
provisions relating to expense advancement) of the Indemnified Persons that are no less favorable to such Persons than the provisions of such certificates of incorporation, bylaws and other organizational documents as of the date of this Agreement and (ii) not amend, repeal or otherwise modify such provisions in any respect that would adversely affect the rights of any Indemnified Person thereunder, in each case, except as required by applicable Law. Notwithstanding the foregoing, all rights to indemnification or advancement of expenses in respect of any claims made or Actions commenced during such six-year period shall continue until the final disposition of such claim or Action.
(b) At or prior to the Closing, SPAC shall, or shall cause one or more of its Subsidiaries to obtain a “tail” directors’ and officers’ liability insurance policy (the “D&O Tail”) covering those Persons who are currently covered by the Company’s or any of its Subsidiaries’ directors’ and officers’ liability insurance policies (true, correct and complete copies of which have been heretofore made available to SPAC or its agents or Representatives) in respect of acts or omissions occurring at or prior to the First Effective Time. Such D&O Tail shall remain in effect for a period of six (6) years following the First Effective Time and shall be on terms not less favorable than the terms of such current insurance coverage, except that in no event shall SPAC or its Subsidiaries be required to pay an annual premium for such insurance in excess of three hundred percent (300%) of the aggregate annual premium payable by the Company and its Subsidiaries for such insurance policy for the year ended December 31, 2025 (such amount, the “Premium Cap”); provided, however, that (i) SPAC shall be required to cause coverage to be extended under the current directors’ and officers’ liability insurance by obtaining a six-year “tail” policy containing terms not materially less favorable than the terms of such current insurance coverage with respect to claims existing or occurring at or prior to the First Effective Time and (ii) if any claim is asserted or made within such six-year period, any insurance required to be maintained under this Section 8.02 shall be continued in respect of such claim until the final disposition thereof. If such minimum coverage is or becomes unavailable at the Premium Cap, then any such D&O Tail shall contain the maximum coverage available at such Premium Cap. SPAC shall maintain the D&O Tail in full force and effect for its full term and shall cause all obligations thereunder to be honored by the Surviving Entity.
(c) SPAC and the Company hereby acknowledge (on behalf of themselves and their respective Subsidiaries) that the Indemnified Persons under this Section 8.02 may have certain rights to indemnification, advancement of expenses and/or insurance provided by current stockholders, members, or other Affiliates of such stockholders (“Indemnitee Affiliates”) separate from the indemnification obligations of SPAC, the Company and their respective Subsidiaries hereunder. The Parties hereby agree (i) that SPAC, the Company and their respective Subsidiaries are the indemnitors of first resort (i.e., its obligations to the Indemnified Persons under this Section 8.02 are primary and any obligation of any Indemnitee Affiliate to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Indemnified Persons under this Section 8.02 are secondary), (ii) that SPAC, the Company and their respective Subsidiaries shall be required to advance the full amount of expenses incurred by the Indemnified Persons under this Section 8.02 and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and required by SPAC’s, the Company’s and their respective Subsidiaries’ governing documents or any director or officer indemnification agreements, without regard to any rights the Indemnified Persons under this Section 8.02 may have against any Indemnitee Affiliate, and (iii) that the Parties (on behalf of themselves and their respective Subsidiaries) irrevocably waive, relinquish and release the Indemnitee Affiliates from any and all claims against the Indemnitee Affiliates for contribution, subrogation or any other recovery of any kind in respect thereof.
(d) Notwithstanding anything contained in this Agreement to the contrary, this Section 8.02 shall survive the consummation of the Mergers indefinitely and shall be binding, jointly and severally, on SPAC, the Surviving Corporation and the Surviving Entity and all successors and assigns of SPAC, the Surviving Corporation and the Surviving Entity. In the event that SPAC, the Surviving Corporation or the Surviving Entity or any of their respective successors or assigns consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or transfers or conveys all or
61
substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of SPAC, the Surviving Corporation or the Surviving Entity, as the case may be, shall succeed to the obligations set forth in this Section 8.02.
Section 8.03. Conduct of SPAC During the Interim Period.
(a) During the Interim Period, except as set forth on Schedule 8.03(a) of the SPAC Disclosure Letter, as reasonably required in connection with the Domestication, as contemplated by this Agreement, as required by applicable Law or any Governmental Authority or as consented to by the Company in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied, except, in the case of clauses (i), (ii), (iv), (viii) and (xii) below, as to which the Company’s consent may be granted or withheld in its sole discretion), SPAC shall not and each shall not permit any of its Subsidiaries to:
(i) change, modify or amend the Trust Agreement, PIPE Subscription Agreement, the SPAC Organizational Documents or the organizational documents of Merger Subs;
(ii) (A) declare, set aside or pay any dividends on, or make any other distribution in respect of any outstanding capital stock of, or other equity interests in, SPAC; (B) split, combine, subdivide, recapitalize or reclassify any capital stock of, or other equity interests in, SPAC, excluding any separation of Cayman SPAC Units in accordance with their terms; (C) other than in connection with the SPAC Stockholder Redemption or as otherwise required by the SPAC Organizational Documents in order to consummate the Transactions, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, SPAC; or (D) make any withdrawals from the Trust Account, other than Permitted Withdrawals and interest income earned on the principal held in the Trust Account as permitted by the Trust Agreement to pay SPAC’s Taxes and, in an aggregate amount up to one million dollars ($1,000,000) per annual period, to fund the SPAC’s working capital requirements, in each case in the ordinary course of business;
(iii) make, change or revoke any material Tax election, adopt or change any material accounting method with respect to Taxes, file any amended material Tax Return, settle or compromise any material Tax liability, enter into any material closing agreement with respect to any Tax or surrender any right to claim a material refund of Taxes, consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment, or enter into any Tax sharing or Tax indemnification agreement or similar agreement (except, in each case, for such agreements that are commercial agreements not primarily relating to Taxes) or take any similar action relating to Taxes, if such election, change, amendment, agreement, settlement, consent or other action would have the effect of materially increasing the present or future Tax liability of the Company or any of its Subsidiaries in a manner that will disproportionately affect Company’s stockholders (as compared to the SPAC Stockholders) after the Closing;
(iv) take or cause to be taken any action, or knowingly fail to take or cause to be taken any action, which action or failure to act would reasonably be expected to prevent or impede the Mergers from qualifying for the Intended Tax Treatment;
(v) other than Permitted Working Capital Loans, enter into, renew or amend any Working Capital Loan or other transaction or Contract with an Affiliate of SPAC (including, for the avoidance of doubt, (x) Sponsor or anyone related by blood, marriage or adoption to any Sponsor and (y) any Person in which any Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of five percent (5%) or greater);
(vi) directly or indirectly acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by purchasing all of or a substantial equity interest in, or by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other entity or Person or division thereof;
62
(vii) enter into, assume, assign, or amend any material term of, modify any material term of or terminate (excluding any expiration in accordance with its terms) any Contract of SPAC or Merger Subs that is (or would be if entered into or assumed after the date hereof) a “material contract” pursuant to Regulation S-K 601;
(viii) waive, release, compromise, settle or satisfy any pending or threatened material claim (which shall include, but not be limited to, any pending or threatened Action) or compromise or settle any liability;
(ix) establish a new Subsidiary or enter into a new line of business;
(x) fail to maintain in full force and effect its director and officer liability insurance policy in a form and amount consistent with past practices (except that the Company shall be authorized to replace existing insurance policies with substantially comparable or greater amounts of insurance coverage);
(xi) incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any Indebtedness or make a loan or advance to or investment in any third party (other than any Permitted Working Capital Loans);
(xii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of SPAC or its Subsidiaries (other than First Merger and Second Merger and the transactions contemplated by this Agreement);
(xiii) enter into any engagement letters with any (i) financial advisors or (ii) capital markets advisors; and
(xiv) offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, other equity interests, equity equivalents, stock appreciation rights, stock units, phantom stock ownership interests or similar rights in, SPAC or any of its Subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or equity interests except for Permitted Working Capital Loans or as expressly contemplated by this Agreement.
(b) During the Interim Period, SPAC shall, and shall cause its Subsidiaries to comply with the SPAC Organizational Documents and the Trust Agreement.
Section 8.04. Certain Transaction Agreements. Unless otherwise approved in writing by the Company, no SPAC Party shall permit any amendment or modification to be made to, any waiver (in whole or in part) of or provide consent to (including consent to termination), of any provision or remedy under, or any replacement of the Sponsor Agreement. SPAC shall take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to satisfy in all material respects on a timely basis all conditions and covenants applicable to SPAC in the Sponsor Agreement and otherwise comply with its obligations thereunder and to enforce its rights under each such agreement. Without limiting the generality of the foregoing, SPAC shall give the Company, prompt written notice: (a) of any breach or default (or any event or circumstance that, with or without notice, lapse of time or both, would give rise to any breach or default) by any party to the Sponsor Agreement known to SPAC; and (b) of the receipt of any written notice or other written communication from any other party to the Sponsor Agreement with respect to any actual, potential, threatened or claimed expiration, lapse, withdrawal, breach, default, termination or repudiation by any party under any such agreement or any provisions of any such agreement.
Section 8.05. Inspection. Subject to confidentiality obligations and similar restrictions that may be applicable to information furnished to SPAC or its Subsidiaries by third parties that may be in SPAC’s or its Subsidiaries’ possession from time to time, and except for any information (x) which in the opinion of legal counsel of SPAC would result in the loss of attorney-client privilege or other privilege from disclosure, (y) which is prohibited from being disclosed by applicable Law, or (z) is subject to statutory non-disclosure or similar provisions, or that is subject to a non-disclosure agreement with a third party or protection as a trade secret,
63
SPAC shall afford to the Company, its Affiliates and their respective Representatives reasonable access during the Interim Period, during normal business hours and with reasonable advance notice, to their respective properties, books, Contracts, commitments, records and appropriate officers and employees of SPAC and its Subsidiaries, and shall use its and their commercially reasonable efforts to furnish such Representatives with all financial and operating data and other information concerning the affairs of SPAC that are in the possession of SPAC, in each case as the Company and its Representatives may reasonably request solely for purposes of consummating the Transactions. The Parties shall use commercially reasonable efforts to make alternative arrangements for such disclosure where the restrictions in the preceding sentence apply. All information obtained by the Company, its Affiliates and their respective Representatives under this Agreement shall be subject to the Confidentiality Agreement prior to the First Effective Time.
Section 8.06. SPAC Stock Exchange Listing. From the date hereof through the Closing, SPAC shall use reasonable best efforts to ensure SPAC remains listed as a public company on, and for shares of SPAC Common Stock to be listed on, the Stock Exchange. SPAC shall take all steps reasonably necessary or advisable to cause the shares of SPAC Common Stock to trade under such symbol as mutually agreed by the Company and SPAC prior to the Closing.
Section 8.07. SPAC Public Filings. From the date hereof through the Closing, SPAC shall use reasonable best efforts to keep current and timely file or timely furnish (or obtain extensions in respect thereof and file or furnish within the applicable grace period) all registration statements reports schedules, forms, statements and other documents required to be filed or furnished with the SEC (collectively, as they have been supplemented, amended or modified since the time of their filing and including all exhibits and schedules thereto and other information incorporated therein, the “Additional SEC Reports”) and otherwise comply in all material respects with its reporting obligations under applicable Securities Laws.
Section 8.08. Section 16 Matters. Prior to the First Effective Time, SPAC shall take all commercially reasonable steps as may be required (to the extent permitted under applicable Law) to cause any acquisition or disposition of the SPAC Common Stock or any derivative thereof that occurs or is deemed to occur by reason of or pursuant to the Transactions by each Person who is or will be or may be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to SPAC to be exempt under Rule 16b-3 promulgated under the Exchange Act, including by taking steps in accordance with the No-Action Letter, dated January 12, 1999, issued by the SEC regarding such matters.
Section 8.09. SPAC Board of Directors. The Company and SPAC shall take all necessary action to cause the board of directors of SPAC as of immediately following the Closing to consist of seven (7) or nine (9) directors, which, (a) to the extent that the board of directors of SPAC is comprised of at least nine (9) directors, shall include two (2) directors designated by Sponsor (one of which to be designated as a Class I director and one of which to be designated as a Class III director), and (b) to the extent that the board of directors of SPAC is comprised of fewer than nine (9) directors, shall include one (1) director designated by Sponsor (which director will be designated as a Class III director) and (ii) such other individuals as shall be determined by the Company, in its sole and exclusive discretion, provided that the citizenship of the members of the board shall be such that SPAC will be free of foreign ownership, control or domination, in each case as designated by such persons prior to the initial filing of the Proxy Statement with the SEC. Upon each individual becoming a director of the board of directors of SPAC, SPAC will enter into customary indemnification agreements with each such director.
Section 8.10. SPAC Management. Schedule 8.10 of the SPAC Disclosure Letter sets forth the names and positions of the members of the senior management of the Company who shall each serve in such positions (or in substantially similar positions) at SPAC following the First Effective Time, provided that the citizenship of the members of the senior management of SPAC following the First Effective Time will be such that SPAC will be free of foreign ownership, control or domination. The Company and SPAC shall use reasonable best efforts to provide that such individuals are appointed and continue to serve after the First Effective Time in their respective positions with substantially similar duties and responsibilities at SPAC, subject to the terms of any employment or offer letters to be agreed prior to the Closing.
64
Section 8.11. Equity Plans. Prior to the Closing Date, SPAC shall approve and adopt and submit for stockholder approval, (i) an equity incentive plan, in a form and substance reasonably acceptable to SPAC and the Company that provides for the grant of awards to employees and other service providers of the Surviving Corporation and its Subsidiaries in the form of options, restricted stock, restricted stock units or other equity-based awards based on SPAC Common Stock with (x) an initial share pool reserve of SPAC Common Stock equal to thirteen percent (13%) of the total number of SPAC Common Stock outstanding on a fully diluted basis, as of immediately following the First Effective Time (for the avoidance of doubt, including all shares of SPAC Common Stock issuable to holders of Company Stock pursuant to Section 3.02), and (y) an annual “evergreen” increase of five percent (5%) of the shares of SPAC Common Stock outstanding as of the day prior to such increase, and (ii) an employee stock purchase plan, in a form and substance reasonably acceptable to SPAC and the Company that provides for the grant of purchase rights with respect to SPAC Common Stock to employees of the Surviving Corporation and its Subsidiaries with (x) an initial share pool reserve of SPAC Common Stock equal to two percent (2%) of the total number of SPAC Common Stock outstanding on a fully diluted basis, as determined at the Closing, and (y) an annual “evergreen” increase of one percent (1%) of the shares of SPAC Common Stock outstanding as of the day prior to such increase **** ((i) and (ii), together, the “Equity Plans”). As soon as practicable following the date that is sixty (60) days after the Closing and subject to applicable securities Laws, SPAC shall file an effective registration statement on Form S-8 (or other applicable form) with respect to the SPAC Common Stock issuable under the 2017 Plan and the Equity Plans, and SPAC shall use reasonable best efforts to maintain the effectiveness of such registration statement(s) (and maintain the current status of the prospectus or prospectuses contained therein) for so long as awards granted pursuant to the 2017 Plan and the Equity Plans remain outstanding.^^
Section 8.12. Qualificationas an Emerging Growth Company. SPAC shall, at all times during the period from the date hereof until the Closing: (a) take all actions necessary to continue to qualify as an “emerging growth company” within the meaning of the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”); and (b) not take any action that would cause SPAC to not qualify as an “emerging growth company” within the meaning of the JOBS Act.
Section 8.13. Domestication. At least one day prior to the Closing and in accordance with applicable Law, any applicable rules and regulations of the SEC, the Nasdaq or the Stock Exchange, as applicable, and the SPAC Organizational Documents, SPAC shall cause the Sponsor Share Conversion and the Domestication to become effective on such date (or such other date that is at least one day prior to the Closing), including by: (a) filing with the Delaware Secretary of State a Certificate of Domestication with respect to the Domestication, in form and substance reasonably acceptable to SPAC and the Company, together with the SPAC Charter Upon Domestication, in each case, in accordance with the provisions of the Certificate of Domestication with respect to the Domestication and the SPAC Charter Upon Domestication and applicable Law; (b) adopting the SPAC Bylaws Upon Domestication; and (c) completing, making and procuring all filings required to be made with the Cayman Registrar of Companies in connection with the Domestication. Following the consummation of the Domestication and prior to the Closing, the board of directors of SPAC will resolve to ratify and approve such matters as may be required to effect the Transactions as contemplated by this Agreement and any such other matters as the Company and SPAC may mutually agree.
ARTICLE 9
JOINT COVENANTS
Section 9.01. Support of Transaction. Without limiting any covenant contained in ARTICLE 7 or ARTICLE 8, including the obligations of the Company and SPAC with respect to the notifications, filings, reaffirmations and applications described in Section 7.03 and Section 8.01, respectively, which obligations shall control to the extent of any conflict with the succeeding provisions of this Section 9.01, SPAC and the Company shall each, and shall each cause their respective Subsidiaries to: (a) use commercially reasonable efforts to assemble, prepare and file any information (and, as needed, to supplement such information) as may be reasonably necessary to obtain as promptly as practicable all governmental and regulatory consents required to be obtained in connection with the Transactions, (b) use commercially reasonable efforts to obtain all material
65
consents and approvals of third parties that any of SPAC, the Company, or their respective Affiliates are required to obtain in order to consummate the Transactions; provided that, the Company shall not be required to seek any such required consents or approvals of third party counterparties to Material Contracts with the Company or its Subsidiaries to the extent such Material Contract is otherwise terminable at will, for convenience or upon or after the giving of notice of termination by a party thereto unless otherwise agreed in writing by the Company and SPAC, and (c) take such other action as may reasonably be necessary or as another Party may reasonably request to satisfy the conditions of the other Party set forth in ARTICLE 10 or otherwise to comply with this Agreement and to consummate the Transactions as soon as practicable. Notwithstanding the foregoing, in no event shall SPAC, Merger Subs, the Company or any of its Subsidiaries be obligated to bear any material expense or pay any material fee or grant any material concession in connection with obtaining any consents, authorizations or approvals pursuant to the terms of any Contract to which the Company or any of its Subsidiaries is a party or otherwise required in connection with the consummation of the Transactions.
Section 9.02. Registration Statement; Proxy Statement; SPAC Special Meeting.
(a) Registration Statement; Proxy Statement. As promptly as practicable after the date of this Agreement, SPAC and the Company shall, in accordance with this Section 9.02(a), prepare, and, subject to its receipt of all Required Company Information of the Company Disclosure Letter (other than the financial statements set forth in item 5 of Schedule 7.05(a), to the extent such financial statements are not required to be included in the Registration Statement), SPAC shall file with the SEC, (i) in preliminary form, a proxy statement and a notice of general meeting in connection with the Transactions (together, as amended or supplemented, the “Proxy Statement”) to be filed as part of the Registration Statement and to be sent to the shareholders of SPAC in advance of the Special Meeting in accordance with the Existing SPAC Governing Document, for the purpose of, among other things: (A) providing the SPAC Stockholders with the opportunity to redeem shares of SPAC Common Stock by tendering such shares for redemption not later than 5:00 p.m. Eastern Time on the date that is two (2) Business Days prior to the date of the Special Meeting (the “SPAC Stockholder Redemption”); and (B) soliciting proxies from holders of SPAC Common Stock to vote at the Special Meeting, as may be adjourned or postponed, in favor of: (1) the adoption of this Agreement and approval of the Transactions; (2) the approval of the Domestication; (3) adoption of the SPAC Charter Upon Domestication, the SPAC Bylaws Upon Domestication; (4) the issuance of shares of SPAC Common Stock in connection with the Mergers (including as may be required by the Stock Exchange); (5) the approval of the adoption of the Equity Plans; (6) the election of the directors constituting the board of directors of SPAC immediately following the First Effective Time (in the form of an advisory vote, with the directors being elected by written resolution of the holders of the SPAC Class B Ordinary Shares in accordance with the SPAC Organizational Documents); (7) the adoption and approval of any other proposals as the SEC (or staff member thereof) may indicate are necessary in its comments to the Proxy Statement, the Registration Statement or correspondence related thereto; (8) any other proposals the Parties agree are necessary or desirable to consummate the Transactions; and (9) adjournment of the Special Meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to approve and adopt any of the foregoing (collectively, the “SPAC Stockholder Matters”) and (ii) the Registration Statement, in which the Proxy Statement will be included as a prospectus; provided, that, notwithstanding the foregoing, in the event all of the Required Company Information has been delivered other than the information set forth in Section 7.05(a)(ii), and if mutually agreed by the Parties, the Parties may confidentially submit the Registration Statement to the SEC. Without the prior written consent of the Company, the SPAC Stockholder Matters shall be the only matters (other than procedural matters) which SPAC shall propose to be acted on by the SPAC Stockholders at the Special Meeting, as adjourned or postponed. SPAC and the Company shall use commercially reasonable efforts to cooperate, and cause their respective Subsidiaries, as applicable, to reasonably cooperate, with each other and their respective Representatives in the preparation of the Registration Statement and Proxy Statement. The Registration Statement shall also include a consent solicitation statement in preliminary form in connection with the solicitation by the Company of written consents from the stockholders of the Company, to approve, by stockholders holding Company Stock sufficient to obtain the Company Stockholder Approval, this Agreement, the Mergers and the Transactions. The Registration Statement and Proxy Statement will comply as to form and substance with the applicable requirements of the Securities Act and Exchange Act,
66
as applicable, and the rules and regulations thereunder. Subject to its receipt of all Required Company Information from the Company pursuant to Section 7.05, SPAC shall (I) have the Registration Statement declared effective under the Securities Act as promptly as practicable after the filing thereof and keep the Registration Statement effective as long as is necessary to consummate the Mergers, (II) file the definitive Proxy Statement with the SEC, (III) cause the Proxy Statement to be mailed to its shareholders of record, as of the record date to be established by the board of directors of SPAC in accordance with Section 9.02(e), as promptly as practicable (but in no event later than five (5) Business Days except as otherwise required by applicable Law) following the effective date of the Registration Statement (such date, the “Proxy Clearance Date”), and (IV) promptly commence a “broker search” in accordance with Rule 14a-12 of the Exchange Act.
(b) Prior to filing with the SEC, SPAC will make available to the Company drafts of the Registration Statement, Proxy Statement and any other documents to be filed with the SEC, both preliminary and final, and any amendment or supplement to the Registration Statement, Proxy Statement or such other document and will provide the Company with a reasonable opportunity to comment on such drafts and shall consider such comments in good faith. SPAC shall not file any such documents with the SEC without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed). SPAC will advise the Company promptly after it receives notice thereof, of: (i) the time when the Registration Statement and Proxy Statement has been filed; (ii) the time when the Registration Statement has been declared effective under the Securities Act; (iii) the filing of any supplement or amendment to the Registration Statement or Proxy Statement; (iv) any request by the SEC for amendment of the Registration Statement or Proxy Statement; (v) any comments from the SEC relating to the Registration Statement or Proxy Statement and responses thereto; and (vi) requests by the SEC for additional information. SPAC shall respond to any SEC comments on the Registration Statement and Proxy Statement as promptly as practicable; provided, that prior to responding to any requests or comments from the SEC, SPAC will make available to the Company drafts of any such response and provide the Company with a reasonable opportunity to comment on such drafts. SPAC shall give reasonable and good faith consideration to any comments made by the Company and its counsel. To the extent not prohibited by Law, SPAC shall provide the Company and their counsel with any comments or other communications, whether written or oral, that SPAC or its counsel may receive from time to time from the SEC or its staff with respect to the Registration Statement and Proxy Statement promptly after receipt of those comments or other communications.
(c) If, at any time prior to the Special Meeting, there shall be discovered any information that should be set forth in an amendment or supplement to the Registration Statement or Proxy Statement so that the Registration Statement or Proxy Statement would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, SPAC shall, subject to Section 9.02(b), promptly file an amendment or supplement to the Registration Statement and Proxy Statement containing such information. If, at any time prior to the Closing, the Company or SPAC, or any of their respective Affiliates, directors or officers, as applicable, discovers any information, event or circumstance relating to such Party, its business or any of its Affiliates, officers, directors or employees that should be set forth in an amendment or a supplement to the Registration Statement or Proxy Statement so that the Registration Statement or Proxy Statement would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, then such Party shall promptly inform the other Party of such information, event or circumstance. In such event, an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by Law, disseminated to the SPAC Stockholders.
(d) SPAC shall make all necessary filings to obtain necessary approvals with respect to the Transactions under the Securities Act, the Exchange Act and applicable “blue sky” laws, and any rules and regulations thereunder. The Company agrees to use commercially reasonable efforts to promptly provide SPAC with all information concerning the business, management, operations and financial condition of the Company and its Subsidiaries, in each case, reasonably requested by SPAC for inclusion in the Registration Statement and Proxy Statement.
67
(e) SPAC Special Meeting. SPAC shall, prior to or as promptly as practicable following the Proxy Clearance Date (and in no event later than the date the Proxy Statement is required to be mailed in accordance with Section 9.02(a)), establish a record date (which date shall be mutually agreed with the Company) for, duly call and give notice of, the Special Meeting. SPAC shall convene and hold an extraordinary general meeting of the SPAC Stockholders, for the purpose of obtaining the approval of the SPAC Stockholder Matters (the “SpecialMeeting”), which meeting shall be held not less than twenty-five (25) days and not more than thirty-five (35) days after the date on which SPAC commences the mailing of the Proxy Statement to its shareholders and otherwise in accordance with SPAC’s obligations to give shareholders notice of the Special Meeting in accordance with the Existing SPAC Governing Document. SPAC shall use its reasonable best efforts to take all actions necessary (in its discretion or at the request of the Company) to obtain the approval of the SPAC Stockholder Matters at the Special Meeting, including as such Special Meeting may be adjourned or postponed in accordance with this Agreement, including by soliciting proxies as promptly as practicable in accordance with applicable Law for the purpose of seeking the approval of the SPAC Stockholder Matters. SPAC shall include the SPAC Board Recommendation in the Proxy Statement. The board of directors of SPAC shall not (and no committee or subgroup thereof shall) change, withdraw, withhold, qualify or modify, or publicly propose to change, withdraw, withhold, qualify or modify, the SPAC Board Recommendation for any reason, except as required by appliable Laws (“Modification of Recommendation”). SPAC agrees that its obligation to establish a record date for, duly call, give notice of, convene and hold the Special Meeting for the purpose of seeking approval of the SPAC Stockholder Matters shall not be affected by any intervening event or circumstance, and SPAC agrees to establish a record date for, duly call, give notice of, convene and hold the Special Meeting and submit for the approval of its shareholders the SPAC Stockholder Matters, in each case in accordance with this Agreement, regardless of any intervening event or circumstance. Notwithstanding anything to the contrary contained in this Agreement, SPAC shall be entitled to (and, in the case of the following clauses (ii) and (iii), at the request of the Company, shall) postpone or adjourn the Special Meeting for a period of no longer than fifteen (15) days: (i) to ensure that any supplement or amendment to the Proxy Statement that the board of directors of SPAC has determined in good faith is required by applicable Law is disclosed to the SPAC Stockholders and for such supplement or amendment to be promptly disseminated to the SPAC Stockholders prior to the Special Meeting; (ii) if, as of the time for which the Special Meeting is originally scheduled (as set forth in the Proxy Statement), there are insufficient shares of SPAC Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business to be conducted at the Special Meeting; (iii) in order to solicit additional proxies from stockholders for purposes of obtaining approval of the SPAC Stockholder Matters; or (iv) with the prior written consent of the Company, such consent not to be unreasonably withheld, conditioned or delayed, for purposes of satisfying the condition set forth in Section 10.03(c) hereof; provided, that, notwithstanding any longer adjournment or postponement period specified at the beginning of this sentence, in the event of any such postponement or adjournment, the Special Meeting shall be reconvened as promptly as practicable following such time as the matters described in such clauses have been resolved.
(f) Company Stockholder Written Consent. As promptly as practicable following the Proxy Clearance Date, the Company shall solicit the Company Stockholder Approval via written consent in accordance with Section 228 of the DGCL. In connection therewith, prior to the Proxy Clearance Date, the Company Board shall set a record date for determining the stockholders of the Company entitled to provide such written consent. The Company shall use reasonable best efforts to cause the parties to the Company Voting and Support Agreements to duly execute and deliver a stockholder written consent substantially in the form attached hereto as Exhibit K (the “Written Consent”) in respect of the shares of Company Stock beneficially owned by such parties (which parties hold Company Stock sufficient to constitute the Company Stockholder Approval) in accordance with Section 228 of the DGCL within forty-eight (48) hours of the Proxy Clearance Date. As promptly as practicable following the execution and delivery of the Written Consent by such parties to the Company, the Company shall deliver to SPAC a copy of such Written Consent in accordance with Section 12.02. The Company shall use reasonable best efforts to, within forty-eight (48) hours of the receipt of the Company Stockholder Approval via the Written Consent, and shall in no event later than five (5) Business Days after such receipt, deliver to the stockholders of the Company who have not executed and delivered the Written Consent the notice required by Section 228(e) of the DGCL, together with a notice and description of the appraisal rights of the holders of
68
record and beneficial owners of Company Stock available under Section 262 of the DGCL (in a manner sufficient in form and substance to start the twenty (20) day period during which appraisal must be demanded as contemplated by Section 262(d)(2) of the DGCL (the last day of such period, the “Appraisal Rights Deadline”)) along with such other information as is required thereunder and pursuant to applicable Law; the Company shall provide SPAC with a reasonable opportunity to comment on drafts of such notice and shall consider such comments in good faith. If stockholders holding Company Stock sufficient to obtain the Company Stockholder Approval fail to deliver the Written Consent to the Company within forty-eight (48) hours of the Registration Statement becoming effective (a “Written Consent Failure”), SPAC shall have the right to terminate this Agreement as set forth in Section 11.01.
(g) The consent solicitation statement shall include the Company Board Recommendation. The Company Board shall not (and no committee or subgroup thereof shall) change, withdraw, withhold, qualify or modify, or publicly propose to change, withdraw, withhold, qualify or modify, the Company Board Recommendation for any reason, unless the Company Board (or the applicable committee or subgroup thereof) determines in good faith by a majority vote, after considering advice from outside legal counsel to the Company, that the failure to take such action would be inconsistent with its fiduciary duties under applicable Law.
Section 9.03. PIPE Investment. Prior to and, if mutually agreed by the Parties, following the date hereof, the Parties shall use their commercially reasonable efforts to obtain commitments from one or more investors for a private financing (collectively, the “PIPE Investments”) pursuant to the terms of one or more subscription agreements (collectively, the “PIPE Subscription Agreements”), the terms of which will be mutually agreed by the Company and SPAC, with such private placement to be consummated prior to or substantially concurrently with the consummation of the Transactions.
Section 9.04. Exclusivity.
(a) Except in connection with a PIPE Investment, during the Interim Period, the Company shall not take, nor shall it permit any of its Affiliates or Representatives to take, whether directly or indirectly, any action to solicit, initiate or engage in discussions or negotiations with, or enter into any agreement with, or encourage, or provide information to, any Person (other than SPAC and/or any of its Affiliates or Representatives) concerning any purchase of any of the Company’s equity securities or the sale of any securities of, or membership interests in, the Company or its Subsidiaries (other than any purchases of equity securities by the Company from employees of the Company or its Subsidiaries or in a PIPE Investment) or any merger or sale of substantial assets of the Company or its Subsidiaries, taken as a whole, other than immaterial assets or assets sold in the ordinary course of business (each such acquisition transaction, but excluding the Transactions, an “Acquisition Transaction”); provided, that the execution, delivery and performance of this Agreement and the other Transaction Agreements and the consummation of the Transactions shall not be deemed a violation of this Section 9.04(a). The Company shall, and shall cause its Affiliates and Representatives to, immediately cease any and all existing discussions or negotiations with any Person conducted prior to the date hereof with respect to, or which is reasonably likely to give rise to or result in, an Acquisition Transaction.
(b) During the Interim Period, SPAC shall not take, nor shall it permit any of its Affiliates or Representatives to take, whether directly or indirectly, any action to solicit, initiate, continue or engage in discussions or negotiations with, or enter into any agreement with, or encourage, respond, provide information to or commence due diligence with respect to, any Person (other than the Company, its stockholders and/or any of their Affiliates or Representatives), concerning, relating to or which is intended or is reasonably likely to give rise to or result in, any offer, inquiry, proposal or indication of interest, written or oral relating to any Business Combination (a “Business Combination Proposal”) other than with the Company, its stockholders and their respective Affiliates and Representatives; provided, that, the execution, delivery and performance of this Agreement and the other Transaction Agreements and the consummation of the Transactions shall not be deemed a violation of this Section 9.04(b). SPAC shall, and shall cause its Affiliates and Representatives to, immediately cease any and all existing discussions or negotiations with any Person conducted prior to the date hereof with respect to, or which is reasonably likely to give rise to or result in, a Business Combination Proposal.
69
Section 9.05. Tax Matters.
(a) Notwithstanding anything to the contrary contained herein, SPAC shall pay all transfer, documentary, sales, use, stamp, registration, value added or other similar Taxes incurred in connection with the Transactions. SPAC shall, at its own expense, timely file all necessary Tax Returns with respect to all such Taxes, and, if required by applicable Law, the Company will join in the execution of any such Tax Returns.
(b) For U.S. federal (and, as applicable, state and local) income tax purposes, (i) each of the Parties intends that the Domestication will qualify as a “reorganization” described in Section 368(a)(1)(F) of the Code and the Treasury Regulations promulgated under Section 368 of the Code, (ii) each of the Parties intends that the Mergers, taken together as integrated steps of a single transaction for U.S. federal income tax purposes, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations thereunder, (iii) SPAC intends that this Agreement be, and hereby is, adopted as a separate “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a) for each of the Domestication and the Sponsor Share Conversion for purposes of Sections 354, 361 and 368 of the Code and the Treasury Regulations promulgated under Sections 354, 361 and 368 of the Code, and (iv) each of the Parties intends that this Agreement be, and hereby is, adopted as a separate “plan of reorganization” for purposes of Sections 354, 361 and 368 of the Code and Treasury Regulations Section 1.368-2(g) (clauses (i) through (iv) collectively, the “IntendedTax Treatment”). The Parties will prepare and file all Tax Returns consistent with the Intended Tax Treatment and will not take any inconsistent position on any Tax Return or during the course of any audit, litigation or other proceeding with respect to Taxes, except as otherwise required by a determination within the meaning of Section 1313(a) of the Code. Each of the Parties agrees to promptly notify all other Parties of any challenge to the Intended Tax Treatment by any Governmental Authority.
(c) Each of SPAC and the Company shall (and shall cause its respective Subsidiaries and Affiliates to) use its reasonable best efforts to (i) cause the Mergers to qualify for the Intended Tax Treatment and (ii) not take or cause to be taken any action, or fail to take or cause to be taken any action, which action or failure to act would reasonably be expected to prevent the Mergers from so qualifying for the Intended Tax Treatment. Without limiting the foregoing, if the SEC or any other Governmental Authority requests or requires that an opinion be provided on or prior to the Closing in respect of the U.S. Tax consequences of or related to the Transactions, the Parties shall agree to use their reasonable best efforts to cause its respective Tax counsel to provide any such opinion, as reasonably determined by such Parties, subject to customary assumptions and limitations.
Section 9.06. Confidentiality; Publicity.
(a) SPAC acknowledges that the information being provided to it in connection with this Agreement and the consummation of the Transactions is subject to the terms of the Confidentiality Agreement. The Confidentiality Agreement shall survive the execution and delivery of this Agreement and shall apply to all information furnished thereunder or hereunder and any other activities contemplated thereby.
(b) None of SPAC, the Company or any of their respective Affiliates shall make any public announcement or issue any public communication regarding this Agreement or the Transactions, or any matter related to the foregoing, without first obtaining the prior consent of the Company or SPAC, as applicable (which consent shall not be unreasonably withheld, conditioned or delayed), except if such announcement or other communication is required by applicable Law or legal process (including pursuant to the Securities Laws or the rules of any national securities exchange), in which case SPAC or the Company, as applicable, shall use their reasonable best efforts to obtain such consent with respect to such announcement or communication with the other Party, prior to announcement or issuance; provided, however, that, subject to this Section 9.06, each Party and its Affiliates may make announcements regarding the status and terms (including price terms) of this Agreement and the Transactions to their respective directors, officers, employees, direct and indirect current or prospective limited partners and investors or otherwise in the ordinary course of their respective businesses, in each case, so long as such recipients are subject to confidentiality obligations at least as restrictive as those set forth in the
70
Confidentiality Agreement without the consent of any other Party; and provided, further, that subject to Section 7.02 and this Section 9.06, the foregoing shall not prohibit any Party from communicating with third parties to the extent necessary for the purpose of seeking any third party consent; provided, further, that notwithstanding anything to the contrary in this Section 9.06(b), nothing herein shall modify or affect SPAC’s obligations pursuant to Section 9.02.
Section 9.07. Post-Closing Cooperation;Further Assurances. Following the Closing, each Party shall, on the request of any other Party, execute such further documents, and perform such further acts, as may be reasonably necessary or appropriate to give full effect to the allocation of rights, benefits, obligations and liabilities contemplated by this Agreement and the Transactions.
Section 9.08. StockholderLitigation. SPAC shall notify the Company, and the Company shall notify SPAC, promptly following receipt of any threat to file, or written notice of the filing of, an Action related to this Agreement or the Transaction by any of its stockholders against any of the SPAC Parties, the Company or any of their respective directors or officers (any such action, a “Stockholder Action”). SPAC shall keep the Company, and the Company shall keep SPAC, as applicable, reasonably apprised of the defense, settlement, prosecution or other developments with respect to any such Stockholder Action. SPAC shall give the Company, and the Company shall give SPAC, as applicable, the opportunity to participate in, subject to a customary joint defense agreement, the defense of any such litigation, to give due consideration to the Company’s or the SPAC’s advice, as applicable, with respect to such litigation and to not settle any such litigation without the prior written consent of the Company or SPAC, as applicable, such consent not to be unreasonably withheld, conditioned or delayed; provided that, for the avoidance of doubt, SPAC shall bear all costs of investigation and all defense and attorneys’ and other professionals’ fees and all settlement payments related to any such Stockholder Action initiated by or on behalf of any stockholders of SPAC, in their capacity as such, and the Company shall bear all costs of investigation and all defense and attorneys’ and other professionals’ fees and all settlement payments related to any such Stockholder Action initiated by or on behalf of any stockholders of the Company, in their capacity as such (“Stockholder Action Expenses”).
ARTICLE 10
CONDITIONS TO OBLIGATIONS
Section 10.01. Conditions to Obligations of All Parties. The obligations of the Parties to consummate, or cause to be consummated, the Transactions are subject to the satisfaction of the following conditions, any one or more of which may be waived (if legally permitted) in writing by all of such Parties:
(a) Regulatory Approvals. The applicable waiting period(s) under the HSR Act in respect of the Transactions (and any extension thereof, or any timing agreements, understandings or commitments obtained by request or other action of the U.S. Federal Trade Commission and/or the U.S. Department of Justice, as applicable) shall have expired or been terminated.
(b) UK NSI Approval. The UK Secretary of State, the Chancellor of the Duchy of Lancaster or the Investment Security Unit will have:
(i) notified the SPAC in accordance with section 14(8)(b)(ii) of the NSI Act that no further action will be taken in relation to the Transactions and the Transactions are therefore cleared and will not receive a call-in notice;
(ii) issued a final notification in accordance with section 26(1)(b) of the NSI Act containing confirmation that no further action will be taken in relation to the Transactions and the Transactions are therefore cleared;
(iii) made a final order permitting the Transactions to proceed and, to the extent relevant, all conditions, provisions or obligations contained in such final order necessary for completion of the Transactions shall have been satisfied or complied with; or
71
(iv) provided a written notice to the SPAC or Company that the Transactions are not subject to review under the NSI Act.
(c) FIRB Approval. The Treasurer of the Commonwealth of Australia or their delegate has either:
(i) provided written notice that there is no objection under the FATA to the Transactions (whether or not subject to conditions); or
(ii) become precluded from exercising any power to make an order under Division 2 of Part 3 of the FATA in relation to the Transactions.
(d) No Injunction or Restraints. No Governmental Authority having jurisdiction over any Party or the Transactions shall have issued any Governmental Order preventing, materially restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement and no Law shall have been enforced that prevents or materially restrains the consummation of the Transactions.
(e) Net Tangible Assets. SPAC shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the SPAC Stockholder Redemption, and giving effect to the receipt by SPAC of the net amount of proceeds actually contributed by investors in accordance with the terms and conditions of the PIPE Subscription Agreements upon consummation of the PIPE Investments.
(f) SPACStockholder Approval. The approval of the SPAC Stockholder Matters shall have been duly obtained in accordance with applicable Law, the SPAC Organizational Documents and the rules and regulations of the Stock Exchange.
(g) Company Stockholder Approval. The Company Stockholder Approval shall have been duly obtained in accordance with the DGCL and the Company Certificate of Incorporation.
(h) Governance Arrangements. Any organizational documents or agreements necessary to give effect to the governance arrangements contemplated by this Agreement and the Transaction Agreements shall have been adopted or executed and delivered by the parties thereto, as applicable.
(i) Board Appointments. All action shall have been taken such that the board of directors of SPAC as of immediately following the Closing shall be constituted of the directors contemplated by Section 8.09.
(j) Stock Exchange Listing Requirements. The shares of SPAC Common Stock contemplated to be listed pursuant to this Agreement shall have been listed on the Stock Exchange and shall be eligible for continued listing on the Stock Exchange immediately following the Closing (as if it were a new initial listing by an issuer that had never been listed prior to Closing).
(k) Effectiveness of Registration Statement. The Registration Statement shall have become effective in accordance with the Securities Act, no stop order shall have been issued by the SEC with respect to the Registration Statement and no Action seeking such stop order shall have been threatened or initiated.
Section 10.02. Additional Conditions to Obligations of SPAC Parties. The obligations of the SPAC Parties to consummate, or cause to be consummated, the Transactions are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by SPAC:
(a) Representations and Warranties.
(i) Each of the representations and warranties of the Company contained (A) in Section 5.06 (Current Capitalization), shall be true and correct in all respects as of the Closing Date as though then made (except to the
72
extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date) other than de minimis inaccuracies, and (B) in the first sentence of Section 5.01 (Corporate Organization of the Company), Section 5.03 (Due Authorization), Section 5.24(a) (Absence of Changes) and Section 5.25 (Brokers’ Fees) (the representations and warranties in (A) and (B) collectively, the “Company Specified Representations”) shall, if qualified by “materiality” or “Material Adverse Effect” or any similar limitation be true and correct in all respects, or if not so qualified, be true and correct in all material respects, in each case as of the Closing Date as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct in all material respects on and as of such earlier date).
(ii) Each of the representations and warranties of the Company contained in ARTICLE 5 (other than the Company Specified Representations), shall be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) as of the Closing Date as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), except, in either case, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect.
(b) Agreements and Covenants. The covenants and agreements of the Company in this Agreement to be performed as of or prior to the Closing shall have been performed in all material respects.
(c) No Material Adverse Effect. Since the date of this Agreement, there has not occurred a Material Adverse Effect with respect to the Company which is continuing.
(d) Officer ’ sCertificate. The Company shall have delivered to SPAC a certificate signed by an officer of the Company, dated as of the Closing Date, certifying that, to the knowledge and belief of such officer, the conditions specified in Section 10.02(a), Section 10.02(b) and Section 10.02(c) have been fulfilled.
(e) Dissenting Shares. The Appraisal Rights Deadline shall have occurred and no Holder or Holders, individually or in the aggregate, beneficially owning more than five percent (5%) of the issued and outstanding shares of Company Stock (with such number of shares being calculated, with respect to the Company Preferred Stock, on an as-converted to Company Common Stock basis) shall beneficially own any Dissenting Shares as of the Closing Date.
Section 10.03. Additional Conditions to the Obligations of the Company. The obligation of the Company to consummate or cause to be consummated the Transactions is subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by the Company:
(a) Representations and Warranties.
(i) Each of the representations and warranties of the SPAC Parties contained in (A) Section 6.13 (Capitalization) shall be true and correct in all respects as of the Closing Date as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date) other than de minimis inaccuracies, and (B) the first sentence of Section 6.01 (Corporate Organization), Section 6.02 (Due Authorization), Section 6.08 (Brokers’ Fees) and Section 6.24 (Fairness Opinion) (the representations and warranties in (A) and (B) collectively, the “SPAC Specified Representations”) shall be, if qualified by “materiality” or “SPAC Material Adverse Effect” or any similar limitation set forth therein, be true and correct in all respects, or if not so qualified, be true and correct in all material respects, in each case, as of the Closing Date as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date).
73
(ii) Each of the representations and warranties of the SPAC Parties contained in ARTICLE 6 (other than the SPAC Specified Representations), shall be true and correct (without giving any effect to any limitation as to “materiality” or “SPAC Material Adverse Effect” or any similar limitation set forth therein) as of the Closing Date as though then made (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, shall be true and correct on and as of such earlier date), except, in either case, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a SPAC Material Adverse Effect.
(b) Agreements and Covenants. The covenants and agreements of the SPAC Parties in this Agreement to be performed as of or prior to the Closing shall have been performed in all material respects.
(c) No SPAC Material Adverse Effect. Since the date of this Agreement, there has not existed a SPAC Material Adverse Effect with respect to SPAC which is continuing.
(d) Available Closing SPAC Cash. The Available Closing SPAC Cash shall not be less than $100,000,000.
(e) Domestication. The Domestication shall have been completed as provided in Section 8.13 and a time-stamped copy of the SPAC Charter Upon Domestication issued by the Secretary of State of Delaware in relation thereto shall have been delivered to the Company.
(f) Officer ’ s Certificate. SPAC shall have delivered to the Company a certificate signed by an officer of SPAC, dated as of the Closing Date, certifying that, to the knowledge and belief of such officer, the conditions specified in Section 10.03(a), Section 10.03(b), Section 10.03(c), Section 10.03(d) and Section 10.03(g) have been fulfilled.
(g) Sponsor Agreement. Each of the covenants of Sponsor and the Insiders (as defined in the Sponsor Agreement) required under the Sponsor Agreement to be performed as of or prior to the Closing shall have been performed in all material respects, and Sponsor or the Insiders shall not have threatened (orally or in writing) (i) that the Sponsor Agreement is not valid, binding and in full force and effect, (ii) that SPAC or the Company is in breach of or default under the Sponsor Agreement or (iii) to terminate the Sponsor Agreement.
Section 10.04. Frustration of Conditions. None of the SPAC Parties or the Company may rely on the failure of any condition set forth in this ARTICLE 10 to be satisfied if such failure was caused by such Party’s failure to act in good faith or to take such actions as may be necessary to cause the conditions of the other Party to be satisfied, as required by Section 9.01.
ARTICLE 11
TERMINATION/EFFECTIVENESS
Section 11.01. Termination. This Agreement may be terminated and the Transactions abandoned:
(a) by written consent of the Company and SPAC;
(b) prior to the Closing, by written notice to the Company from SPAC if (i) there is any breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, such that the conditions specified in Section 10.02(a) or Section 10.02(b) would not be satisfied at the Closing (a “Terminating Company Breach”), except that, if such Terminating Company Breach is curable by the Company, then, for a period of up to thirty (30) days (or any shorter period of the time that remains between the date SPAC provides written notice of such violation or breach and the Termination Date or the Extended Termination Date, as applicable) after receipt by the Company of notice from SPAC of such breach, but only as long as the Company continues to use commercially reasonable efforts to cure such Terminating Company Breach (the “Company Cure Period”), such termination shall not be effective, and such termination shall
74
become effective only if the Terminating Company Breach is not cured within the Company Cure Period, (ii) the Closing has not occurred on or before March 1, 2026 (the “Termination Date”); provided, that if any Action for specific performance or other equitable relief by the Company with respect to this Agreement, any other Transaction Agreement or otherwise with respect to the Transactions is commenced or pending on or before the Termination Date, then the Termination Date shall be automatically extended without any further action by any Party until the date that is thirty (30) days following the date on which a final, non-appealable Governmental Order has been entered with respect to such Action and the Termination Date shall be deemed to be such later date for all purposes of this Agreement (the “ExtendedTermination Date”); or (iii) the consummation of the Mergers is permanently enjoined or prohibited by the terms of a final, non-appealable Governmental Order or a statute, rule or regulation; provided, that the right to terminate this Agreement under subsection (i) or (ii) shall not be available if SPAC’s failure to fulfill any obligation under this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to occur on or before such date;
(c) prior to Closing, by written notice to SPAC from the Company if (i) there is any breach of any representation, warranty, covenant or agreement on the part of any SPAC Party set forth in this Agreement, such that the conditions specified in Section 10.03(a) or Section 10.03(b) would not be satisfied at the Closing (a “Terminating SPAC Breach”), except that, if any such Terminating SPAC Breach is curable by such SPAC Party, then, for a period of up to thirty (30) days (or any shorter period of the time that remains between the date the Company provides written notice of such violation or breach and the Termination Date or the Extended Termination Date, as applicable) after receipt by SPAC of notice from the Company of such breach, but only as long as SPAC continues to exercise commercially reasonable efforts to cure such Terminating SPAC Breach (the “SPAC Cure Period”), such termination shall not be effective, and such termination shall become effective only if the Terminating SPAC Breach is not cured within the SPAC Cure Period, (ii) the Closing has not occurred on or before the Termination Date, or (iii) the consummation of the Mergers is permanently enjoined or prohibited by the terms of a final, non-appealable Governmental Order or a statute, rule or regulation; provided, that the right to terminate this Agreement under subsection (i) or (ii) shall not be available if the Company’s failure to fulfill any obligation under this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to occur on or before such date; and provided, further, that, without limiting the foregoing, the Company shall use reasonable best efforts to provide written notice to SPAC, in good faith, prior to the Domestication, if the Company believes it has the right to, and intends to, terminate this Agreement prior to the Closing.
(d) by written notice from either the Company or SPAC to the other if the approval of the SPAC Stockholder Matters required to consummate the Transactions by the SPAC Stockholders is not obtained at the Special Meeting (subject to any adjournment, postponement or recess of the meeting); provided, that, the right to terminate this Agreement under this Section 11.01(d) shall not be available to SPAC if, at the time of such termination, SPAC is in breach of Section 9.02;
(e) by written notice from SPAC to the Company in the event of a Written Consent Failure; provided, that the right to terminate this Agreement on account of a Written Consent Failure shall not be available if the Company Stockholder Approval is obtained prior to SPAC providing notice of its intent to terminate this Agreement on account of a Written Consent Failure; or
(f) by written notice from the Company to SPAC if there has been a Modification of Recommendation.
Section 11.02. Effect of Termination. Except as otherwise set forth in this Section 11.02 or Section 12.13, in the event of the termination of this Agreement pursuant to Section 11.01, this Agreement shall forthwith become void and have no effect, without any liability under this Agreement on the part of any Party or its respective Affiliates, officers, directors, employees, Representatives or stockholders, other than liability of any Party for any intentional and willful breach of this Agreement by such Party occurring prior to such termination. The provisions of Section 7.04 (No Claim Against the Trust Account), Section 9.06 (Confidentiality; Publicity), this Section 11.02 (Effect of Termination) and ARTICLE 12 (collectively, the “Surviving Provisions”) and the
75
Confidentiality Agreement, and any other Section or Article of this Agreement referenced in the Surviving Provisions which are required to survive in order to give appropriate effect to the Surviving Provisions, shall in each case survive any termination of this Agreement.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Waiver. Any Party may, at any time prior to the Closing, by action taken by its board of directors or equivalent governing body, or officers thereunto duly authorized, waive in writing any of its rights or conditions in its favor under this Agreement or agree to an amendment or modification to this Agreement in the manner contemplated by Section 12.10 and by an agreement in writing executed in the same manner (but not necessarily by the same Persons) as this Agreement.
Section 12.02. Notices. All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:
(a) If to SPAC or Merger Subs to:
Churchill Capital Corp X
640 Fifth Avenue, 14^th^ Floor
New York, NY 10019
| Attn: | Jay Taragin |
|---|---|
| Email: | [***] |
| --- | --- |
with a copy (which shall not constitute notice) to:
Willkie Farr & Gallagher LLP
787 7th Avenue
New York, NY 10019
| Attn: | Greg Astrachan |
|---|---|
| Sean Ewen | |
| --- | |
| Esther Chang | |
| --- | |
| Email: | [***] |
| --- | --- |
(b) If to the Company or the Surviving Entity, to:
ColdQuanta, Inc.
1315 W Century Dr #150
Louisville, CO 80027
| Attn: | Jim Stirbis |
|---|---|
| Email: | [***] |
| --- | --- |
with a copy (which shall not constitute notice) to:
Cooley LLP
3 Embarcadero Center
20^th^ Floor
San Francisco, CA 94111
| Attn: | Garth Osterman |
|---|---|
| Mike Nelson | |
| --- | |
| Peter Byrne | |
| --- | |
| Kristin VanderPas | |
| --- | |
| Email: | [***] |
| --- | --- |
76
or to such other address or addresses as the Parties may from time to time designate in writing. Without limiting the foregoing, any Party may give any notice, request, instruction, demand, document or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, ordinary mail or electronic mail), but no such notice, request, instruction, demand, document or other communication shall be deemed to have been duly given unless and until it actually is received by the Party for whom it is intended.
Section 12.03. Assignment. No Party shall assign this Agreement or any part hereof without the prior written consent of the other Parties; provided, that the Company may delegate the performance of its obligations or assign its rights hereunder in part or in whole to any Affiliate of the Company so long as the Company remains fully responsible for the performance of the delegated obligations. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns. Any attempted assignment in violation of the terms of this Section 12.03 shall be null and void, ab initio.
Section 12.04. Rights of Third Parties. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person, other than the Parties, any right or remedies under or by reason of this Agreement; provided, however, that notwithstanding the foregoing (a) in the event the Closing occurs, the present and former officers and directors of the Company and SPAC (and their successors, heirs and representatives) and each of their respective Indemnitee Affiliates are intended third-party beneficiaries of, and may enforce, Section 8.02(a) and (b) the past, present and future directors, officers, employees, incorporators, members, partners, stockholders, Affiliates, agents, attorneys, advisors and representatives of the Parties, and any Affiliate of any of the foregoing (and their successors, heirs and representatives), are intended third-party beneficiaries of, and may enforce, Section 12.14 and Section 12.15.
Section 12.05. Expenses. Except as otherwise provided herein, each Party shall bear its own expenses incurred in connection with this Agreement and the Transactions whether or not the Transactions shall be consummated, including all fees of its legal counsel, financial advisers and accountants; provided that if the Closing occurs, SPAC shall bear and pay at or promptly after Closing, all SPAC Transaction Expenses and all Company Transaction Expenses; provided that all Stockholder Action Expenses, whether borne by SPAC or the Company, shall be fully payable by SPAC if the Closing occurs and not subject to any limitation or cap.
Section 12.06. Governing Law. This Agreement, and all claims or causes of Action based upon, arising out of, or related to this Agreement or the Transactions, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction (except that the Cayman Company Act shall apply to the Domestication and any claims related to internal affairs of SPAC prior to the Domestication).
Section 12.07. Captions; Counterparts. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Section 12.08. Schedules and Exhibits. All references herein to Schedules and Exhibits shall be deemed references to such parts of this Agreement, unless the context shall otherwise require. Any disclosure made by a Party in the Schedules with reference to any section or schedule of this Agreement shall be deemed to be a disclosure with respect to all other sections or schedules to which such disclosure may apply solely to the extent the relevance of such disclosure is reasonably apparent on the face of the disclosure in such Schedule. Certain information set forth in the Schedules is included solely for informational purposes.
Section 12.09. Entire Agreement. This Agreement (together with the Schedules and Exhibits to this Agreement) and that certain Non-Disclosure Agreement, dated as of May 23, 2025, between SPAC and the Company (as amended, modified or supplemented from time to time, the “ConfidentialityAgreement”),
77
constitute the entire agreement among the Parties relating to the Transactions and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the Parties or any of their respective Subsidiaries relating to the Transactions. No representations, warranties, covenants, understandings, agreements, oral or otherwise, relating to the transactions contemplated by this Agreement exist between the Parties except as expressly set forth or referenced in this Agreement and the Confidentiality Agreement.
Section 12.10. Amendments. This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed in the same manner as this Agreement and which makes reference to this Agreement. The approval of this Agreement by the stockholders of any of the Parties shall not restrict the ability of the board of directors (or other body performing similar functions) of any of the Parties to terminate this Agreement in accordance with Section 11.01 or to cause such Party to enter into an amendment to this Agreement pursuant to this Section 12.10.
Section 12.11. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the Parties.
Section 12.12. Jurisdiction; Waiver of Trial by Jury. Any Action based upon, arising out of or related to this Agreement or the Transactions may be brought in federal and state courts located in the State of Delaware, and each of the Parties irrevocably submits to the exclusive jurisdiction of each such court in any such Action, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Action shall be heard and determined only in any such court, and agrees not to bring any Action arising out of or relating to this Agreement or the Transactions in any other court. Nothing herein contained shall be deemed to affect the right of any Party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other Party in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this Section 12.12. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS.
Section 12.13. Enforcement. The Parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the Parties do not perform their obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate this Agreement) or any Transaction Agreement in accordance with its specified terms or otherwise breach such provisions. The Parties acknowledge and agree that (a) the Parties shall be entitled to an injunction, specific performance, or other equitable relief, to prevent breaches of this Agreement or any Transaction Agreement and to enforce specifically the terms and provisions hereof and thereof, without proof of damages, prior to the valid termination of this Agreement in accordance with Section 11.01, this being in addition to any other remedy to which they are entitled under this Agreement or any Transaction Agreement or under applicable Law, and (b) the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, none of the Parties would have entered into this Agreement. Each Party agrees that it will not oppose the granting of specific performance and other equitable relief on the basis that the other Parties have an adequate remedy at Law or that an award of specific performance is not an appropriate remedy for any reason at Law or equity. The Parties acknowledge and agree that any Party seeking an injunction to prevent breaches of this Agreement or any Transaction Agreement and to enforce specifically the terms and provisions of this Agreement or any Transaction Agreement in accordance with this Section 12.13 shall not be required to provide any bond or other security in connection with any such injunction. Without limiting the generality of the foregoing, or the other provisions of this Agreement, SPAC acknowledges
78
and agrees that the Company may, without breach of this Agreement, (i) with respect to any Transaction Agreement to which the Company is a party or a third party beneficiary thereof, institute or pursue an Action directly against the counterparty(ies) to such Transaction Agreement seeking, or seek or obtain a court order against the counterparty(ies) to such Transaction Agreement for, injunctive relief, specific performance, or other equitable relief with respect to such Transaction Agreement, (ii) with respect to any Transaction Agreement to which the Company is not a party or a third party beneficiary thereof, upon written notice to SPAC, (A) require SPAC to enforce its rights under any such Transaction Agreement through the initiation and pursuit of litigation (including seeking, or seek or obtain a court order against the counterparty(ies) to such Transaction Agreement for, injunctive relief, specific performance, or other equitable relief with respect to such Transaction Agreement) in the event the counterparty under such Transaction Agreement is in breach of its obligations thereunder, (B) have approval rights over SPAC’s selection of counsel for any such litigation (such approval not to be unreasonably withheld, conditioned or delayed), (C) select a separate counsel to participate alongside SPAC’s counsel in any such litigation (at the expense of the Company); provided that such separate counsel shall not be entitled to control or seek court orders on SPAC’s behalf, and/or (D) fund any such litigation, and (c) require SPAC to promptly execute, and SPAC hereby agrees to execute and comply with, any and all documents designed to implement or facilitate the execution of the rights contemplated in this sentence. Each Party agrees that it will use its reasonable best efforts to cooperate with the other in seeking and agreeing to an expedited schedule in any litigation seeking an injunction or order of specific performance.
Section 12.14. Non-Recourse. Subject in all respect to the last sentence of this Section 12.14, this Agreement may only be enforced against, and any claim or cause of Action based upon, arising out of, or related to this Agreement or the Transactions may only be brought against, the entities that are expressly named as Parties and then only with respect to the specific obligations set forth herein with respect to such Party. Except to the extent a Party has undertaken specific obligations pursuant to this Agreement, (a) no past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any Party and (b) no past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any of the foregoing shall have any liability (whether in contract, tort, equity or otherwise) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of any one or more of the Company, SPAC or Merger Subs under this Agreement of or for any claim based on, arising out of, or related to this Agreement or the Transactions. Notwithstanding the foregoing, nothing in this Section 12.14 shall limit, amend or waive any rights or obligations of any party to any Transaction Agreement.
Section 12.15. Non-survival of Representations, Warranties and Covenants. None of the representations, warranties, covenants, obligations or other agreements in this Agreement or in any certificate, statement or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and other provisions, shall survive the Closing and shall terminate and expire upon the occurrence of the First Effective Time (and there shall be no liability after the Closing in respect thereof), except for (a) those covenants and agreements contained herein that by their terms expressly apply in whole or in part at or after the Closing and then only with respect to any breaches occurring at or after the Closing and (b) this ARTICLE 12.
Section 12.16. Acknowledgements.
(a) Each of the Parties acknowledges and agrees (on its own behalf and on behalf of its respective Affiliates and its and their respective, stockholders, shareholders, partners, members and Representatives) that: (i) it has conducted its own independent investigation of the financial condition, results of operations, assets, liabilities, properties and projected operations of the other Parties (and their respective Subsidiaries) and has been afforded satisfactory access to the books and records, facilities and personnel of the other Parties (and their respective Subsidiaries) for purposes of conducting such investigation; (ii) the Company Representations constitute the sole and exclusive representations and warranties of the Company in connection with the Transactions; (iii) the SPAC Party Representations constitute the sole and exclusive representations and warranties of SPAC and Merger Subs; (iv) except for the Company Representations by the Company and the SPAC Party Representations by the
79
SPAC Parties, none of the Parties or any other Person makes, or has made, any other express or implied representation or warranty with respect to any Party (or any Party’s Subsidiaries), including any implied warranty or representation as to condition, merchantability, suitability or fitness for a particular purpose or trade as to any of the assets of such Party or its Subsidiaries or the transactions contemplated by this Agreement and all other representations and warranties of any kind or nature expressed or implied (including (x) regarding the completeness or accuracy of, or any omission to state or to disclose, any information, including in the estimates, projections or forecasts or any other information, document or material provided to or made available to any Party or their respective Affiliates or Representatives in certain “data rooms,” management presentations or in any other form in expectation of the Transactions, including meetings, calls or correspondence with management of any Party (or any Party’s Subsidiaries), and (y) any relating to the future or historical business, condition (financial or otherwise), results of operations, prospects, assets or liabilities of any Party (or its Subsidiaries), or the quality, quantity or condition of any Party’s or its Subsidiaries’ assets) are specifically disclaimed by all Parties and their respective Subsidiaries and all other Persons (including the Representatives and Affiliates of any Party or its Subsidiaries); (v) Representatives of SPAC or the Company have not made, and are not making, any representation or warranty whatsoever to any Party or its Affiliates and shall not be liable in respect of the accuracy or completeness of any information provided to any Party or its Affiliates; and (vi) each Party and its respective Affiliates are not relying on any representations and warranties in connection with the Transactions except the Company Representations by the Company and the SPAC Party Representations by the SPAC Parties. The foregoing does not limit any rights of any Party pursuant to any other Transaction Agreement against any other Party pursuant to such Transaction Agreement to which it is a party or an express third party beneficiary thereof. Except as otherwise expressly set forth in this Agreement, SPAC understands and agrees that any assets, properties and business of the Company and its Subsidiaries are furnished “as is”, “where is” and subject to and except for the Company Representations by the Company or as provided in any certificate delivered in accordance with Section 10.02(d), with all faults and without any other representation or warranty of any nature whatsoever. Nothing in this Section 12.16 shall relieve any Party of liability in the case of actual and intentional fraud committed by such Party.
(b) Effective upon Closing, except with respect to those covenants and agreements contained herein that by their terms expressly apply at or after the Closing, each of the Parties waives, on its own behalf and on behalf of its respective Affiliates and Representatives, to the fullest extent permitted under applicable Law, any and all rights, Actions and causes of action it may have against any other Party or their respective Subsidiaries and any of their respective current or former Affiliates or Representatives relating to the operation of any Party or its Subsidiaries or their respective businesses or relating to the subject matter of this Agreement, the Schedules, or the Exhibits to this Agreement, whether arising under or based upon any federal, state, local or foreign statute, Law, ordinance, rule or regulation or otherwise. Each Party acknowledges and agrees that it will not assert, institute or maintain any Action, suit, investigation, or proceeding of any kind whatsoever, including a counterclaim, cross-claim, or defense, regardless of the legal or equitable theory under which such liability or obligation may be sought to be imposed, that makes any claim contrary to the agreements and covenants set forth in this Section 12.16. Notwithstanding anything herein to the contrary, nothing in this Section 12.16(b) shall preclude any Party from seeking any remedy for actual and intentional fraud by a Party solely and exclusively with respect to the making of any representation or warranty by it in ARTICLE 5 or ARTICLE 6 (as applicable). Each Party shall have the right to enforce this Section 12.16 on behalf of any Person that would be benefitted or protected by this Section 12.16 if they were a party hereto. The foregoing agreements, acknowledgements, disclaimers and waivers are irrevocable. For the avoidance of doubt, nothing in this Section 12.16 shall limit, modify, restrict or operate as a waiver with respect to, any rights any Party may have under any written agreement entered into in connection with the transactions that are contemplated by this Agreement, including any other Transaction Agreement.
Section 12.17. Conflicts and Privilege.
(a) SPAC and the Company, on behalf of their respective successors and assigns (including, after the Closing, the Surviving Entity), hereby agree that, in the event a dispute with respect to this Agreement or the
80
transactions contemplated hereby arises after the Closing between or among (x) the Sponsor, the stockholders or holders of other equity interests of SPAC or the Sponsor and/or any of their respective directors, members, partners, officers, employees or Affiliates (other than the Surviving Entity) prior to the Closing (collectively, the “Sponsor Group”), on the one hand, and (y) the Surviving Entity and/or any member of the INFQ Group, on the other hand, any legal counsel, including Willkie Farr & Gallagher LLP (“Willkie”) that represented SPAC and/or the Sponsor prior to the Closing may represent the Sponsor and/or any other member of the Sponsor Group, in such dispute even though the interests of such Persons may be directly adverse to the Surviving Entity, and even though such counsel may have represented SPAC in a matter substantially related to such dispute, or may be handling ongoing matters for the Surviving Entity and/or the Sponsor. SPAC and the Company, on behalf of their respective successors and assigns (including, after the Closing, the Surviving Entity), further agree that, as to all legally privileged communications prior to the Closing (made in connection with the negotiation, preparation, execution, delivery and performance under, or any dispute or Action arising out of or relating to, this Agreement, any Transaction Agreements or the transactions contemplated hereby or thereby) between or among SPAC, the Sponsor and/or any other member of the Sponsor Group, on the one hand, and Willkie, on the other hand, the attorney/client privilege and the expectation of client confidence shall survive the Merger and belong to the Sponsor Group after the Closing, and shall not pass to or be claimed or controlled by the Surviving Entity. Notwithstanding the foregoing, any privileged communications or information shared by the Company prior to the Closing with SPAC or the Sponsor under a common interest agreement shall remain the privileged communications or information of the Surviving Entity.
(b) Acquiror and the Company, on behalf of their respective successors and assigns (including, after the Closing, the Surviving Entity), hereby agree that, in the event a dispute with respect to this Agreement or the transactions contemplated hereby arises after the Closing between or among (x) the stockholders or holders of other equity interests of the Company and/or any of their respective directors, members, partners, officers, employees or Affiliates (other than the Surviving Entity) prior to the Closing (collectively, the “INFQ Group”), on the one hand, and (y) the Surviving Entity and/or any member of the Sponsor Group, on the other hand, any legal counsel, including Cooley LLP (“Cooley”) that represented the Company prior to the Closing may represent any member of the INFQ Group in such dispute even though the interests of such Persons may be directly adverse to the Surviving Entity, and even though such counsel may have represented SPAC and/or the Company in a matter substantially related to such dispute, or may be handling ongoing matters for the Surviving Entity, further agree that, as to all legally privileged communications prior to the Closing (made in connection with the negotiation, preparation, execution, delivery and performance under, or any dispute or Action arising out of or relating to, this Agreement, any Transaction Agreements or the transactions contemplated hereby or thereby) between or among the Company and/or any member of the INFQ Group, on the one hand, and Cooley, on the other hand, the attorney/client privilege and the expectation of client confidence shall survive the Merger and belong to the INFQ Group after the Closing, and shall not pass to or be claimed or controlled by the Surviving Entity. Notwithstanding the foregoing, any privileged communications or information shared by SPAC prior to the Closing with the Company under a common interest agreement shall remain the privileged communications or information of the Surviving Entity.
[Signature pages follow]
81
IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement and Plan of Merger and Reorganization to be duly executed as of the date hereof.
| CHURCHILL CAPITAL CORP X | |
|---|---|
| By: | /s/ Jay Taragin |
| Name: Jay Taragin | |
| Title: Chief Financial Officer | |
| AH MERGER SUB I, INC. | |
| By: | /s/ Jay Taragin |
| Name: Jay Taragin | |
| Title: Secretary and Treasurer | |
| AH MERGER SUB II, LLC | |
| By: | /s/ Jay Taragin |
| Name: Jay Taragin | |
| Title: Secretary and Treasurer |
IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement and Plan of Merger and Reorganization to be duly executed as of the date hereof.
| COLDQUANTA, INC. | |
|---|---|
| By: | /s/ Matthew Kinsella |
| Name:Matthew Kinsella | |
| Title:Chief Executive Officer |
Schedule 7.05(a)
Financial Statements
| 1. | Audited Financial Statements for FY 2023 |
|---|---|
| 2. | Audited Financial Statements for FY 2024 |
| --- | --- |
| 3. | Unaudited Financial Statements for Q1 2025 |
| --- | --- |
| 4. | Unaudited Financial Statements for Q2 2025 |
| --- | --- |
| 5. | Unaudited Financial Statements for Q3 2025 (no earlier than “staleness” date for Q2 2025<br>financials) |
| --- | --- |
EX-3.1
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
INFLEQTION, INC.
*****
SECTION 1.
The name of this corporation is Infleqtion, Inc. (the “Corporation”).
SECTION 2.
The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle, Zip Code 19801, and the name of the registered agent of the Corporation in the State of Delaware at such address is The Corporation Trust Company.
SECTION 3.
The purpose of the 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 (the “DGCL”).
SECTION 4.
Section 4.1 The Corporation is authorized to issue two classes of stock to be designated, respectively, “CommonStock” and “Preferred Stock.” The total number of shares that the Corporation is authorized to issue is 1,500,000,000 shares, consisting of 1,400,000,000 shares of Common Stock, par value $0.0001 per share, and 100,000,000 shares of Preferred Stock, par value $0.0001 per share.
Section 4.2 The Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation (the “Board”) is hereby expressly authorized to provide for the issue of all or any of the unissued and undesignated shares of the Preferred Stock, in one or more series, and to fix the number of shares of such series and to determine for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be set forth in a certificate of designation adopted by the Board and filed in accordance with the DGCL.
Section 4.3 Irrespective of the provisions of Section 242(b)(2) of the DGCL, but subject to the terms of any certificate of designation filed with respect to any series of Preferred Stock, the holders of Preferred Stock and Common Stock shall vote together, and not as separate classes, on any amendment to this Certificate of Incorporation to increase or decrease the number of authorized shares of Preferred Stock or Common Stock.
Section 4.4 Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the Corporation for their vote; provided, however, that, except as otherwise required by applicable law, holders of Common Stock shall not be entitled to vote on any amendment to this certificate of incorporation (as amended from time to time, the “Certificate of Incorporation”) (including any certificate of designation filed with respect to any series of Preferred Stock)
that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series of Preferred Stock are entitled, either separately or together as a class with the holders of one or more other affected series of Preferred Stock, to vote thereon pursuant to applicable law or the Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock).
SECTION 5.
For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation, of its directors and stockholders, or any class thereof, as the case may be, it is further provided that:
Section 5.1 MANAGEMENT OF THE BUSINESS.
Except as otherwise provided by the DGCL or the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board. Subject to any rights of the holders of shares of any one or more series of Preferred Stock then outstanding to elect additional directors under specified circumstances, the number of directors that shall constitute the Board shall be fixed exclusively by the Board.
Section 5.2 BOARD OF DIRECTORS
Subject to the rights of the holders of any one or more series of Preferred Stock to elect additional directors under specified circumstances, the directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. Each class shall consist, as nearly as practicable, of a number of directors equal to one third of the number of members of the Board authorized as provided in Section 5.1. The Board is authorized to assign members of the Board already in office to such classes at the time the classification becomes effective (the “FilingDate”). At the first annual meeting of stockholders following the Filing Date, the initial term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following the Filing Date, the initial term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following the Filing Date, the initial term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.
Notwithstanding the foregoing provisions of this section, each director shall serve until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation or removal. No decrease in the number of directors constituting the Board shall remove or shorten the term of any incumbent director.
Section 5.3 REMOVAL OFDIRECTORS
Subject to the rights of the holders of any one or more series of Preferred Stock to remove directors elected by such series of Preferred Stock, any individual director or the entire Board may be removed from office at any time, but only for cause, and only by the affirmative vote of the holders of at least 66-2/3% of the voting power of all the then-outstanding shares of the capital stock of the Corporation entitled to vote generally at an election of directors, voting together as a single class.
2
Section 5.4 VACANCIES.
Subject to any limitations imposed by applicable law and subject to the rights of the holders of any one or more series of Preferred Stock to elect additional directors or fill vacancies in respect of such directors, any vacancies on the Board resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board, or by a sole remaining director, and not by the stockholders. Any director elected to fill a newly created directorship or vacancy in accordance with the preceding sentence shall hold office until the next annual meeting of stockholders held to elect the class of directors to which such director is elected and until such director’s successor shall have been elected and qualified or such director’s earlier death, resignation or removal.
Section 5.5PREFERRED STOCKHOLDERS ELECTION RIGHTS.
Whenever the holders of any one or more series of Preferred Stock shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal and other features of such directorships shall be governed by the terms of the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) applicable thereto. The number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed pursuant to Section 5.1 hereof, and the total number of directors constituting the whole Board shall be automatically adjusted accordingly. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate (in which case each such director thereupon shall cease to be qualified as, and shall cease to be, a director) and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.
Section 5.6 BYLAW AMENDMENTS.
The Board is expressly authorized and empowered to adopt, amend or repeal any provisions of the bylaws of the Corporation (as amended from time to time, the “Bylaws”) without the assent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation. The stockholders shall also have power to adopt, amend or repeal the Bylaws; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by the Certificate of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least 66-2/3% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon, voting together as a single class.
Section 5.7 STOCKHOLDER ACTIONS.
a. The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.
b. Subject to any rights of the holders of shares of any one or more series of Preferred Stock then outstanding, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of the stockholders and may not be effected by consent in lieu of a meeting.
3
c. Subject to any rights of the holders of shares of any series of Preferred Stock then outstanding, special meetings of stockholders of the Corporation may be called only by the Chairperson of the Board, the Chief Executive Officer, the President or directors representing a majority of directors then in office, but a special meeting may not be called by any other person or persons and any power of stockholders to call a special meeting of stockholders is specifically denied. Only such business shall be considered at a special meeting of stockholders as shall have been stated in the notice for such meeting.
SECTION 6.
No director or officer of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL, as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence 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, modification or repeal. Solely for purposes of this Section 6, “officer” shall have the meaning provided in Section 102(b)(7) of the DGCL.
SECTION 7.
Section 7.1 Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware and any appellate court therefrom shall be the sole and exclusive forum for: (A) any derivative claim or cause of action brought on behalf of the Corporation; (B) any claim or cause of action that is based upon a violation of a duty owed by any current or former director, officer, other employee or stockholder of the Corporation, to the Corporation or the Corporation’s stockholders; (C) any claim or cause of action against the Corporation or any current or former director, officer or other employee of the Corporation, arising out of or pursuant to any provision of the DGCL, the Certificate of Incorporation or the Bylaws; (D) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws (including any right, obligation, or remedy thereunder); (E) any claim or cause of action as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; and (F) any claim or cause of action against the Corporation or any current or former director, officer or other employee of the Corporation, governed by the internal-affairs doctrine or otherwise related to the Corporation’s internal affairs, in all cases to the fullest extent permitted by applicable law; provided, however, that if the designation of such court as the sole and exclusive forum for a claim or action referred to in foregoing clauses (A) through (F) of this Section would violate applicable law, then the United States District Court for the District of Delaware or if the designation of such court would violate applicable law, then the Superior Court of Delaware shall be the sole and exclusive forum for such claim or cause of action.
Section 7.2 Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by applicable law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant named in such complaint. For the avoidance of doubt, this provision is intended to benefit and may be enforced by the Corporation, its officers and directors, the underwriters for any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
4
SECTION 8.
Section 8.1 Any person or entity holding, owning, or otherwise acquiring any interest in any security of the Corporation shall be deemed to have notice of and consented to the provisions of the Certificate of Incorporation.
Section 8.2 The Corporation reserves the right to amend, alter, change or repeal, at any time and from time to time, any provision contained in the Certificate of Incorporation, in the manner now or hereafter prescribed by statute, except as provided in Section 8.3, and all rights, preferences and privileges of whatsoever nature conferred upon the stockholders, directors or any other persons whomsoever by and pursuant to the Certificate of Incorporation are granted subject to this reservation. For the avoidance of doubt, but subject to the rights of the holders of any outstanding series of Preferred Stock, Section 242(d) of the DGCL shall apply to amendments to the Certificate of Incorporation.
Section 8.3 Notwithstanding any other provisions of the Certificate of Incorporation or any provision of applicable law that might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of capital stock of the Corporation required by applicable law or by the Certificate of Incorporation or any certificate of designation filed with respect to a series of Preferred Stock, the affirmative vote of the holders of at least 66^2^/3% of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to alter, amend or repeal (whether by merger, consolidation, conversion or otherwise), or adopt any provision inconsistent with, Sections 5, 6, 7 and this Section 8.
SECTION 9.
If any provision or provisions of the Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of the Certificate of Incorporation (including, without limitation, each portion of any paragraph of the Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not, to the fullest extent permitted by applicable law, in any way be affected or impaired thereby.
SECTION 10.
The name and mailing address of the incorporator of the Corporation is as follows:
Michael Klein
640 5th Avenue, 14th Floor
New York, NY 10019
* * *
5
The Corporation **** has caused this certificate of incorporation to be signed by an incorporator of the Corporation on February 12, 2026.
| Infleqtion, Inc. | |
|---|---|
| By: | /s/ Michael Klein |
| Michael Klein | |
| Incorporator |
EX-3.2
Exhibit 3.2
BYLAWS
OF
INFLEQTION, INC.
(ADELAWARE CORPORATION)
SECTION 1.
OFFICES
Section 1.1 REGISTERED OFFICE**.** The registered office of Infleqtion, Inc. (the “Corporation”) in the State of Delaware and the name of the Corporation’s registered agent at such address shall be as set forth in the certificate of incorporation of the Corporation (as the same may be amended and/or restated from time to time, the “Certificate of Incorporation”). ****
Section 1.2 OTHER OFFICES**.** The Corporation may at any time establish other offices both within and without the State of Delaware.
SECTION 2.
CORPORATE SEAL
Section 2.1 CORPORATE SEAL**.** The Board of Directors of the Corporation (the “Board”) may adopt a corporate seal. Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 3.
STOCKHOLDERS’ MEETINGS
Section 3.1 PLACE OF MEETINGS**.** Meetings of the stockholders of the Corporation may be held at such place, if any, either within or without the State of Delaware, as may be determined from time to time by the Board (or its designee). The Board may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the General Corporation Law of the State of Delaware (“DGCL”) and Section 3.9 below.
Section 3.2 ANNUAL MEETINGS.
(a) The annual meeting of the stockholders of the Corporation, for the purpose of election of directors and for such other business as may properly come before it, shall be held on such date and time as may be determined from time to time by the Board (or its designee). Any annual meeting of stockholders previously scheduled by the Board may be postponed, rescheduled or cancelled by the Board, or any director or officer of the Corporation to whom the Board delegates such authority, at any time before or after notice of such meeting has been given to stockholders. Nominations of persons for election to the Board and proposals of other business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the Corporation’s notice of meeting of stockholders (or any supplement thereto);
(ii) by or at the direction of the Board or a duly authorized committee thereof; or (iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving the stockholder’s notice provided for in Section 3.2(b) of these bylaws (as may be amended and/or restated from time to time, the “Bylaws”) and who is a stockholder of record at the time of the annual meeting of stockholders, who is entitled to vote at the meeting and who complied with the notice procedures and requirements set forth in this Section 3.2.
For the avoidance of doubt, clause (a) above shall be the exclusive means for a stockholder to make nominations and submit other business before an annual meeting of stockholders.
(b) At an annual meeting of the stockholders, only such business shall be conducted as is a proper matter for stockholder action under the DGCL, the Certificate of Incorporation and the Bylaws, and only such nominations shall be made and such business shall be conducted as shall have been properly brought before the meeting in accordance with the procedures below.
(i) For nominations for the election to the Board to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 3.2(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the Corporation on a timely basis as set forth in Section 3.2(b)(iii) and must update and supplement the information contained in such written notice on a timely basis as set forth in Section 3.2(c). Such stockholder’s notice shall include: (A) as to each nominee such stockholder proposes to nominate at the meeting: (1) the name, age, business address and residence address of such nominee, (2) the principal occupation or employment of such nominee, (3) the class or series and number of shares of each class or series of capital stock of the Corporation that are owned of record and beneficially by such nominee and list of any pledge of or encumbrances on such shares, (4) the date or dates on which such shares were acquired and the investment intent of such acquisition, (5) the questionnaire, representation and agreement required by Section 3.2(e), completed and signed by such nominee, and (6) all other information concerning such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved and whether or not proxies are being or will be solicited), or that is otherwise required to be disclosed or provided to the Corporation pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (including such person’s written consent to being named in a proxy statement, associated proxy card and other filings as a nominee and to serving as a director if elected); and (B) all of the information required by Section 3.2(b)(iv).
The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or to serve on any committee or sub-committee of the Board, in either case under any applicable stock exchange listing requirements, applicable law or the Policies (as defined below). The number of nominees a stockholder may nominate for election at an annual meeting on its own behalf (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at an annual meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such annual meeting. A stockholder may not designate any substitute or alternate nominees unless the stockholder provides timely notice of such substitute or alternate nominee(s) in accordance with this Section 3.2, in the case of an annual meeting, or Section 3.3, in the case of a special meeting (and such notice contains all of the information, representations, questionnaires and certifications with respect to such substitute or alternate nominee(s) that are required by the Bylaws with respect to nominees for director).
2
(ii) For business other than nominations for the election to the Board to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 3.2(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the Corporation on a timely basis as set forth in Section 3.2(b)(iii), and must update and supplement the information contained in such written notice on a timely basis as set forth in Section 3.2(c). Such stockholder’s notice shall include: (A) as to each matter such stockholder proposes to bring before the meeting, (1) a brief description of the business desired to be brought before the meeting, (2) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment), (3) the reasons for conducting such business at the meeting, and (4) any material interest (including any anticipated benefit of such business to any Proponent (as defined below) other than solely as a result of its ownership of the Corporation’s capital stock, that is material to any Proponent individually, or to the Proponents in the aggregate) in such business of any Proponent; and (B) all of the information required by Section 3.2(b)(iv).
(iii) To be timely, the written notice required by Section 3.2(b)(i) or 3.2(b)(ii) must be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day, nor earlier than the 120th day, prior to the first anniversary of the immediately preceding year’s annual meeting (for purposes of notice required for action to be taken at the Corporation’s first annual meeting of stockholders after the filing date of the Certificate of Incorporation, the date of the immediately preceding year’s annual meeting shall be deemed to have occurred on June 1 in such immediately preceding calendar year); provided, however, that, subject to the last sentence of this Section 3.2(b)(iii), in the event that the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 70 days after the anniversary of the preceding year’s annual meeting, or if no annual meeting was held (or deemed to have been held), notice by the stockholder to be timely must be so received not earlier than the 120^th^ day prior to such annual meeting and not later than the later of the close of business on (i) the 90^th^ **** day prior to such annual meeting or (ii) the tenth day following the day on which public announcement of the date of such meeting is first made by the Corporation.
In no event shall an adjournment or postponement (or the public announcement thereof) of an annual meeting for which notice has been given, or for which a public announcement of the date of the meeting has been made by the Corporation, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(iv) The written notice required by Sections 3.2(b)(i) or 3.2(b)(ii) shall also include, as of the date of the notice and as to the stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination or proposal is made and any affiliate who controls (as such term is defined in Rule 405 under the Securities Act of 1933, as amended (the “1933 Act”)) either of the foregoing stockholder or beneficial owner, directly or indirectly (each, a “Proponent” and collectively, the “Proponents”):
3
(A) the name and address of each Proponent, including, if applicable, such name and address as they appear on the Corporation’s books and records;
(B) the class, series and number of shares of each class or series of the capital stock of the Corporation that are, directly or indirectly, owned of record or beneficially (within the meaning of Rule 13d-3 under the 1934 Act) by each Proponent (provided, that for purposes of this Section 3.2(b)(iv), such Proponent shall in all events be deemed to beneficially own all shares of any class or series of capital stock of the Corporation as to which such Proponent or any of its affiliates or associates has a right to acquire beneficial ownership whether immediately or at any time in the future);
(C) a description of any agreement, arrangement or understanding (whether oral or in writing) with respect to such nomination or proposal (and/or the voting of shares of any class or series of capital stock of the Corporation, other than a revocable proxy given in response to a proxy solicitation made to 10 or more persons) between or among any Proponent and any of its affiliates or associates, and/or any other persons (including their names) including without limitation, any agreements, arrangements or understandings required to be disclosed pursuant to Item 5 or Item 6 of 1934 Act Schedule 13D, regardless of whether the requirement to file a Schedule 13D is applicable;
(D) a representation that the stockholder is a holder of record of shares of the Corporation at the time of giving notice, will be entitled to vote at the meeting, and that such stockholder (or a qualified representative thereof) intends to appear at the meeting to nominate the person or persons specified in the notice (with respect to a notice under Section 3.2(b)(i)) or to propose the business that is specified in the notice (with respect to a notice under Section 3.2(b)(ii));
(E) a representation whether any Proponent or any other participant (as defined in Item 4 of Schedule 14A under the 1934 Act) will engage in a solicitation with respect to such nomination or proposal and, if so, the name of each participant in such solicitation and the amount of the cost of solicitation that has been and will be borne, directly or indirectly, by each participant in such solicitation, and a representation as to whether the Proponents intend or are part of a group which intends to: (x) deliver, or make available, a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s voting shares required to approve or adopt the proposal or elect the nominee, (y) otherwise solicit proxies or votes from stockholders in support of such proposal or nomination and/or (z) solicit proxies in support of any proposed nominee in accordance with Rule 14a-19 promulgated under the 1934 Act;
(F) a description of all Derivative Transactions (as defined below) by each Proponent during the previous 12-month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic or voting terms of, such Derivative Transactions;
(G) a certification regarding whether each Proponent has complied with all applicable federal, state and other legal requirements in connection with such Proponent’s acquisition of shares of capital stock or other securities of the Corporation and/or such Proponent’s acts or omissions as a stockholder or beneficial owner of the Corporation; and
4
(H) any other information relating to each Proponent required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14 of the 1934 Act and the rules and regulations promulgated thereunder.
(c) A stockholder providing the written notice required by Section 3.2(b)(i) or 3.2(b)(ii) shall update and supplement such notice in writing, if necessary, so that the information (other than the representations required by Section 3.2(b)(iv)(E)) provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date for the determination of stockholders entitled to notice of the meeting and (ii) the date that is five Business Days (as defined below) prior to the meeting and, in the event of any adjournment or postponement thereof, five Business Days prior to such adjourned or postponed meeting; provided, that no such update or supplement shall cure or affect the accuracy (or inaccuracy) of any representations made by any Proponent, any of its affiliates or associates, or a nominee or the validity (or invalidity) of any nomination or proposal that failed to comply with this Section 3.2 or is rendered invalid as a result of any inaccuracy therein.
In the case of an update and supplement pursuant to clause (i) of this Section 3.2(c), such update and supplement must be received by the Secretary at the principal executive offices of the Corporation not later than five Business Days after the later of the record date for the determination of stockholders entitled to notice of the meeting or the public announcement of such record date. In the case of an update and supplement pursuant to clause (ii) of this Section 3.2(c), such update and supplement shall be received by the Secretary at the principal executive offices of the Corporation not later than two Business Days prior to the date for the meeting, and, in the event of any adjournment or postponement thereof, two Business Days prior to such adjourned or postponed meeting (or if there are fewer than two Business Days between the date for the meeting, or the date of the immediately preceding adjournment or postponement thereof, and the date for the adjourned or postponed meeting, not later than the day prior to such adjourned or postponed meeting).
(d) Notwithstanding anything in Section 3.2(b)(iii) **** to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board at least 10 days before the last day a stockholder may deliver a notice of nomination in accordance with Section 3.2(b)(iii), a stockholder’s notice required by this Section 3.2 and that complies with the requirements in Section 3.2(b)(i), other than the timing requirements in Section 3.2(b)(iii), shall also be considered timely, but only with respect to nominees for the new positions created by such increase, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation.
(e) To be eligible to be a nominee for election or re-election as a director of the Corporation pursuant to a nomination under clause (iii) of Section 3.2(a) or clause (ii) of Section 3.3(c), each Proponent must deliver (in accordance with the time periods prescribed for delivery of notice under Sections 3.2(b)(iii), 3.2(d) or Section 3.3(c), as applicable) to the Secretary at the principal executive offices of the Corporation a completed written questionnaire with respect to the background, qualifications, stock ownership and independence of such proposed nominee (in the form provided by the Secretary within 10 days following a written request therefor by a stockholder of record) and a written representation and agreement (in the form provided by the Secretary within 10 days following written request therefor by a stockholder of record) that such person:
5
(i) is not and will not become a party to any agreement, arrangement or understanding (whether oral or in writing) with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question that (A) has not been disclosed in the questionnaire or (B) could limit or interfere with such person’s ability to comply with such person’s fiduciary duties under applicable law;
(ii) is not and will not become a party to any agreement, arrangement or understanding (whether oral or in writing) 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 of the Corporation or a nominee that has not been disclosed in such questionnaire;
(iii) would be in compliance, if elected as a director of the Corporation (and a statement as to whether such person, if elected, intends to comply with), all applicable corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation that are publicly disclosed or which were provided by the Secretary with the written representation and agreement required by this Section 3.2(e) (together, the “Policies”); and
(iv) if elected as a director of the Corporation, intends to serve the entire term until the next meeting at which such candidate would face re-election.
(f) A person shall not be eligible for election or re-election as a director unless the person is nominated, in the case of an annual meeting, in accordance with Section 3.2(a) and in accordance with the procedures set forth in Section 3.2(b), Section 3.2(c), Section 3.2(d), Section 3.2(e) and Section 3.2(f), as applicable, or in the case of a special meeting, in accordance with Section 3.3(c) and the requirements thereof. Only such business shall be conducted at any annual meeting of the stockholders of the Corporation as shall have been brought before the meeting in accordance with Section 3.2(a) and in accordance with the procedures set forth in Section 3.2(b), Section 3.2(c) and Section 3.2(f), as applicable. Notwithstanding anything to the contrary in the Bylaws, unless otherwise required by applicable law, in the event that any Proponent (i) provides notice pursuant to Rule 14a-19(b) promulgated under the 1934 Act with respect to one or more proposed nominees and (ii) subsequently fails to (A) comply with the requirements of Rule 14a-19 promulgated under the 1934 Act (or fails to timely provide reasonable evidence sufficient to satisfy the Corporation that such Proponent has met the requirements of Rule 14a-19(a)(3) promulgated under the 1934 Act in accordance with the next sentence) or (B) inform the Corporation that they no longer plan to solicit proxies in accordance with the requirements of Rule 14a-19 under the 1934 Act by delivering a written notice to the Secretary at the principal executive offices of the Corporation within two (2) Business Days after the occurrence of such change, then the nomination of each such proposed nominee shall be disregarded (and such nominee disqualified from standing for election or re-election), notwithstanding that the nominee is included (as applicable) as a nominee in the Corporation’s proxy statement, notice of meeting or other proxy materials for any stockholder 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).
6
If any Proponent provides notice pursuant to Rule 14a-19(b) promulgated under the 1934 Act, such Proponent shall deliver to the Corporation, no later than five (5) Business Days prior to the applicable meeting, reasonable evidence sufficient to demonstrate that it has met the requirements of Rule 14a-19(a)(3) promulgated under the 1934 Act.
Notwithstanding anything to the contrary set forth herein, and for the avoidance of doubt, the nomination of any person whose name is included (as applicable) as a nominee in the Corporation’s proxy statement, notice of meeting or other proxy materials for any stockholder meeting (or any supplement thereto) as a result of any notice provided by any Proponent pursuant to Rule 14a-19(b) promulgated under the 1934 Act with respect to such proposed nominee and whose nomination is not made by or at the direction of the Board or any authorized committee thereof shall not be deemed (for purposes of clause (a) of Section 3.2(a) or otherwise) to have been made pursuant to the Corporation’s notice of meeting (or any supplement thereto) and any such nominee may only be nominated by a Proponent pursuant to clause (a) of Section 3.2(a) and, in the case of a special meeting of stockholders, pursuant to and to the extent permitted under Section 3.3(c).
Except as otherwise required by applicable law, and subject to the supervision, direction and control of the Board of Directors, the chairperson of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures and requirements set forth in the Bylaws (including, without limitation, compliance with Rule 14a-19 promulgated under the 1934 Act) and, if any proposed nomination or business is not in compliance with the Bylaws, or the Proponent does not act in accordance with the representations required in this Section 3.2, to declare that such proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded (and such nominee disqualified from standing for election or re-election), or that such business shall not be transacted, notwithstanding that such proposal or nomination is set forth in (as applicable) the Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such nomination or such business may have been solicited or received.
Notwithstanding the foregoing provisions of this Section 3.2, unless otherwise required by applicable law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded (and such nominee disqualified from standing for election or re-election) and such proposed business shall not be transacted, notwithstanding that such nomination or proposed business is set forth in (as applicable) the Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such vote may have been solicited or received by the Corporation. For purposes of this Section 3.2, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager, trustee or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders, and such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, shall be provided to the Secretary of the Corporation at least five (5) Business Days prior to the meeting of stockholders.
7
(g) Notwithstanding anything to the contrary in this Section 3.2, the notice requirements set forth in these bylaws with respect to the proposal of any business pursuant to this Section 3.2 will be deemed to be satisfied by a stockholder if (1) such stockholder has submitted a proposal to the Company in compliance with Rule 14a 8 under the 1934 Act (“Rule 14a-8”); and (2) such stockholder’s proposal has been included in a proxy statement that has been prepared by the Company to solicit proxies for the meeting of stockholders. Subject to Rule 14a 8 and other applicable rules and regulations under the 1934 Act, nothing in these bylaws will be construed to permit any stockholder, or give any stockholder the right, to include or have disseminated or described in the Company’s proxy statement any nomination of a director or any other business proposal.
(h) For purposes of Sections 3.2 and 3.3,
(i) “affiliates” and “associates” shall have the meanings set forth in Rule 405 under the 1933 Act;
(ii) “Business Day” means any day other than Saturday, Sunday or a day on which banks are closed in New York City, New York;
(iii) “close of business” means 6:00 p.m. local time at the principal executive offices of the Corporation on any calendar day, whether or not the day is a Business Day;
(iv) “Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proponent or any of its affiliates or associates, whether record or beneficial:
(A) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the Corporation;
(B) that otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the Corporation;
(C) the effect or intent of which is to mitigate loss, manage risk or benefit from changes in value or price with respect to any securities of the Corporation; or
(D) that provides the right to vote (other than a revocable proxy given in response to a proxy solicitation made to 10 or more persons) or increase or decrease the voting power of, such Proponent, or any of its affiliates or associates, directly or indirectly, with respect to any securities of the Corporation,
which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation or similar right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proponent in the securities of the Corporation held by any general or limited partnership, or any limited liability company, of which such Proponent is, directly or indirectly, a general partner or managing member; and
(v) “public announcement” means disclosure in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, GlobeNewswire or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act or by such other means reasonably designed to inform the public or security holders in general of such information, including, without limitation, posting on the Corporation’s investor relations website.
8
Section 3.3 SPECIAL MEETINGS.
(a) Special meetings of the stockholders of the Corporation may only be called in the manner provided in the Certificate of Incorporation. Any special meeting of stockholders previously scheduled by the Board may be postponed, rescheduled or cancelled by the Board, or any director or officer to whom the Board has delegated such authority, at any time before or after notice of such meeting has been given to stockholders.
(b) The Board (or its designee) shall determine the date and time of such special meeting. Upon determination of the date, time and place, if any, of the meeting, the Secretary shall cause a notice of meeting to be given to the stockholders entitled to vote, in accordance with the provisions of Section 3.4.
(c) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected (i) by or at the direction of the Board or a duly authorized committee thereof or (ii) by any stockholder of the Corporation who is a stockholder of record at the time of giving notice provided for in this paragraph and who is a stockholder of record at the time of the special meeting, who is entitled to vote at the meeting and who complies with Sections 3.2(b)(i), 3.2(b)(iv), 3.2(c), 3.2(e) and 3.2(f).
The number of nominees a stockholder may nominate for election at a special meeting on its own behalf (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at a special meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such special meeting. In the event the Corporation calls a special meeting of stockholders for the purpose of submitting a proposal to stockholders for the election of one or more directors, any such stockholder of record entitled to vote in such election of directors may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if written notice setting forth the information required by Sections 3.2(b)(i) and 3.2(b)(iv) shall be received by the Secretary at the principal executive offices of the Corporation not earlier than the close of business on 120th day prior to such special meeting and not later than the close of business on the later of (i) the 90th day prior to such meeting or (ii) the tenth day following the day on which the Corporation first makes a public announcement of the date of the special meeting at which directors are to be elected. The stockholder shall also update and supplement such information as required under Section 3.2(c).
In no event shall an adjournment or a postponement (or the public announcement thereof) of a special meeting for which notice has been given, or for which a public announcement of the date of the meeting has been made by the Corporation, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(d) A person shall not be eligible for election or re-election as a director at the special meeting unless the person is nominated either in accordance with clause (i) or clause (ii) of Section 3.3(c). Except as otherwise required by applicable law, and subject to the supervision, direction and control of the Board of Directors, the chairperson of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures
9
and requirements set forth in the Bylaws and, if any proposed nomination is not in compliance with the Bylaws (including, without limitation, compliance with Rule 14a-19 under the 1934 Act), or if the Proponent does not act in accordance with the representations required in Section 3.2, to declare that such nomination shall not be presented for stockholder action at the meeting and shall be disregarded (and such nominee disqualified from standing for election or re-election), notwithstanding that such nomination is set forth in (as applicable) the Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such nomination may have been solicited or received.
Notwithstanding the foregoing provisions of this Section 3.3, unless otherwise required by applicable law, if the stockholder (or a qualified representative of the stockholder (meeting the requirements specified in Section 3.2(f)) does not appear at the special meeting of stockholders of the Corporation to present a nomination, such nomination shall be disregarded (and such nominee disqualified from standing for election or re-election), notwithstanding that the nomination is set forth (as applicable) in the Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such nomination may have been solicited or received by the Corporation.
(e) Notwithstanding the foregoing provisions of Sections 3.2 and 3.3, a stockholder must also comply with all applicable requirements of the 1934 Act and the rules and regulations promulgated thereunder with respect to the matters set forth in Sections 3.2 and 3.3, and any failure to comply with such requirements shall be deemed a failure to comply with Sections 3.2 or 3.3, as applicable; provided, however, that, to the fullest extent not prohibited by applicable law, any references in the Bylaws to the 1934 Act or the rules and regulations promulgated thereunder are not intended to and shall not limit the requirements applicable to proposals and/or nominations to be considered pursuant to Sections 3.2(a) and 3.3(c). Nothing in the Bylaws shall be deemed to affect any rights of holders of any class or series of preferred stock to nominate and elect directors pursuant to and to the extent provided in any applicable provision of the Certificate of Incorporation.
Section 3.4 NOTICE OF MEETINGS**.** Except as otherwise provided by applicable law, the Certificate of Incorporation or the Bylaws, notice of each meeting of stockholders shall be given not less than ten nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of such meeting. Such notice shall specify the date, time and place, if any, of the meeting, the record date for determining stockholders entitled to vote at the meeting, if such record date is different from the record date for determining stockholders entitled to notice of the meeting, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at any such meeting, and, in the case of special meetings, the purpose or purposes of the meeting. Notice shall be deemed given as provided in Section 232 of the DGCL.
Section 3.5 QUORUM ANDVOTE REQUIRED**.** At all meetings of stockholders, except where otherwise required by law or by the Certificate of Incorporation, or by the Bylaws, the presence, in person, by remote communication, if applicable, or by proxy, of the holders of a majority of the voting power of the outstanding shares of stock entitled to vote at the meeting shall constitute a quorum for the transaction of business. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
10
Unless a different or minimum vote is provided by law or by applicable stock exchange rules, or by the Certificate of Incorporation or the Bylaws, in which case such different or minimum vote shall be the applicable vote on the matter, in all matters other than the election of directors, the affirmative vote of a majority of the votes cast on such matter, voting affirmatively or negatively (excluding abstentions and broker non-votes) shall be the act of the stockholders. Except as otherwise required by law, the Certificate of Incorporation or the Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote in the election of directors. Where a separate vote by a class or classes or series is required, except as required by law or by the Certificate of Incorporation or the Bylaws, the holders of a majority of the voting power of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter.
Unless a different or minimum vote is provided by law or by the Certificate of Incorporation or the Bylaws or any applicable stock exchange rules, in which case such different or minimum vote shall be the applicable vote on the matter, the affirmative vote of the holders of a majority (or plurality, in the case of the election of directors) of the votes cast on such matter, voting affirmatively or negatively (excluding abstentions and broker non-votes) shall be the act of such class or classes or series.
Section 3.6 ADJOURNMENT AND NOTICE OF ADJOURNEDMEETINGS**.** Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairperson of the meeting or by the stockholders by the affirmative vote of a majority of the votes cast, voting affirmatively or negatively (excluding abstentions and broker non-votes). When a meeting is adjourned to another time or place, if any, (including an adjournment taken to address a technical failure to convene or continue a meeting using remote communication) notice need not be given of the adjourned meeting if the time and place, if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed present in person and may vote at such meeting are announced at the meeting at which the adjournment is taken or are (a) 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 (b) set forth in the notice of meeting given in accordance with Section 3.4.
At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date so fixed for notice of such adjourned meeting.
Section 3.7 VOTING RIGHTS**.** For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders or adjournment thereof, except as otherwise provided by applicable law, only persons in whose names shares stand on the stock records of the Corporation on the record date shall be entitled to vote **** at any meeting of stockholders. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy. No proxy shall be voted after three years from its date of creation unless the proxy provides for a longer period. Voting at meetings of stockholders need not be by written ballot. Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board.
11
Section 3.8 LIST OFSTOCKHOLDERS**.** The corporation shall prepare, no later than the tenth day before each meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder; provided, however, if the record date for determining the stockholders entitled to vote is less than ten days before the meeting date, the list shall reflect all of the stockholders entitled to vote as of the tenth day before the meeting date. Nothing in this Section 3.8 shall require the corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of ten days ending on the day before the meeting date: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation.
In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation.
Section 3.9 REMOTECOMMUNICATION; DELIVERY TO THE CORPORATION.
(a) If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxyholders not physically present at a stockholder meeting may, by means of remote communication:
(i) participate in a meeting of stockholders; and
(ii) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (B) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.
(b) Whenever Section 3.2 or 3.3 requires one or more persons (including a record or beneficial owner of capital stock) to deliver a document or information to the Corporation or any officer, employee or agent thereof (including any notice, request, questionnaire, revocation, representation or other document or agreement), such document or information shall be in writing exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation, overnight courier service) or by certified or registered mail, return receipt requested and the Corporation shall not be required to accept delivery of any document not in such written form or so delivered.
12
Section 3.10 ORGANIZATION.
(a) At every meeting of stockholders, a person designated by the Board shall act as chairperson of the meeting of stockholders. If no chairperson of the meeting of stockholders is so designated, then the Chairperson of the Board, or if no Chairperson has been appointed, is absent or refuses to act, the Chief Executive Officer, or if no Chief Executive Officer is then serving or the Chief Executive Officer is absent or refuses to act, the President, or, if the President is absent or refuses to act, a chairperson of the meeting chosen by the stockholders by the affirmative vote of a majority of the votes cast, voting affirmatively or negatively (excluding abstentions and broker non-votes), shall act as chairperson of the meeting of stockholders. A person designated by the Board shall act as secretary of the meeting. If no secretary of the meeting is designated, then the Secretary, or, in the Secretary’s absence, an Assistant Secretary or other officer or other person directed to do so by the chairperson of the meeting, shall act as secretary of the meeting.
(b) The Board shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board, if any, the chairperson of the meeting shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the Corporation and their duly authorized and constituted proxies and such other persons as the chairperson shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters that are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
(c) The Corporation may and shall, if required by applicable law, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation 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 chairperson of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspectors shall:
(1) ascertain the number of shares outstanding and the voting power of each;
(2) determine the shares represented at a meeting and the validity of proxies and ballots;
(3) count all votes and ballots;
(4) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and
13
(5) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots.
The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with Sections 211(e) or 212(c)(2) of the DGCL, or any information provided pursuant to Sections 211(a)(2)b.(i) or (iii) of the DGCL, ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to Section 231(b)(5) of the DGCL shall specify the precise information considered by them including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors’ belief that such information is accurate and reliable.
SECTION 4.
DIRECTORS
Section 4.1 NUMBER. The authorized number of directors of the Corporation shall be fixed in accordance with the Certificate of Incorporation.
Section 4.2 POWERS**.** The business and affairs of the Corporation shall be managed by or under the direction of the Board, except as may be otherwise provided by the Certificate of Incorporation or the DGCL.
Section 4.3 TERMS**.** The terms of directors shall be as set forth in the Certificate of Incorporation.
Section 4.4 VACANCIES; NEWLY CREATEDDIRECTORSHIPS**.** Vacancies and newly created directorships on the Board shall be filled as set forth in the Certificate of Incorporation, except as otherwise required by applicable law.
Section 4.5 RESIGNATION**.** Any director may resign at any time by delivering such director’s notice in writing or by electronic transmission to the Board or the Secretary. Such resignation shall take effect at the time of delivery of the notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective. When one or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term of the director whose place shall be vacated and until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal.
Section 4.6 REMOVAL**.** Directors shall be removed as set forth in the Certificate of Incorporation.
14
Section 4.7 MEETINGS.
(a) Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board may be held at any time or date and at any place, if any, within or outside of the State of Delaware that has been designated by the Board and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile or by electronic mail or other electronic means. No further notice shall be required for regular meetings of the Board.
(b) Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board may be held at any time and place, if any, within or without the State of Delaware as designated and called by the Chairperson of the Board, the Chief Executive Officer or by a majority of the directors then in office.
(c) Meetings by Electronic Communications Equipment. Any member of the Board, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(d) Notice of Special Meetings. Notice of the time and place, if any, of all special meetings of the Board shall be given orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, or by electronic mail or other means of electronic transmission at least 24 hours before the date and time of the meeting. If notice is sent by U.S. mail, it shall be sent by first class mail, postage prepaid, at least three days before the date of the meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board need be specified in any such notice.
Section 4.8 QUORUM AND VOTING.
(a) Except as otherwise required by the DGCL, the Certificate of Incorporation or the Bylaws, a quorum of the Board shall consist of a majority of the authorized number of directors fixed from time to time by the Board in accordance with the Certificate of Incorporation; provided, however, at any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn the meeting to another time, without notice other than by announcement at the meeting.
(b) At each meeting of the Board at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by applicable law, the Certificate of Incorporation or the Bylaws.
Section 4.9 ACTION WITHOUT MEETING**.** Unless otherwise restricted by the Certificate of Incorporation or the Bylaws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission. After an action is taken, such consent or consents shall be filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
15
Section 4.10 FEES ANDCOMPENSATION. Unless otherwise restricted by the Certificate of Incorporation or the Bylaws, the Board, or any duly authorized committee thereof, shall have the authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity.
Section 4.11 COMMITTEES.
(a) Committees. The Board may, from time to time, appoint such committees as may be permitted by applicable law. Such committees appointed by the Board shall consist of one or more members of the Board and to the extent permitted by applicable law and 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 that may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any Bylaw of the Corporation. Except as otherwise required by the DGCL, the Certificate of Incorporation or the Bylaws, a quorum of any committee of the Board shall consist of such number of directors as set forth in the charter of such committee approved by the Board.
(b) Term. The Board, subject to any requirements of any outstanding series of preferred stock and the provisions of subsection (a) of this Section 4.11, may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of such committee member’s death, such person’s resignation from the committee or on such date that the committee member, for any reason, is no longer a member of the Board. The Board may at any time for any reason remove any individual committee member and the Board may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof 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.
(c) Meetings. Unless the Board shall otherwise provide, regular meetings of any committee appointed pursuant to this Section 4.11 shall be held at such times and places, if any, as are determined by the Board, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at such place, if any, that has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place, if any, of such special meeting given in the manner provided for the giving of notice to members of the Board of the time and place, if any, of special meetings of the Board. Unless otherwise provided by the Board in the resolutions authorizing the creation of the committee, the presence of at least a majority of the members of the committee then serving shall be necessary to constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by the affirmative vote of a majority of the members present at a meeting of the committee at which a quorum is present.
Section 4.12 DUTIES OF CHAIRPERSON OF THEBOARD**.** The Board shall elect from its ranks a Chairperson of the Board. The Chairperson of the Board shall perform such other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board shall designate from time to time. The Chairperson of the Board, when present, shall preside at all meetings of the Board in accordance with Section 4.13.
16
Section 4.13 ORGANIZATION**.** At every meeting of the directors, the Chairperson of the Board shall act as chairperson of the meeting. If a Chairperson has not been appointed or is absent, the Chief Executive Officer (if a director), or, if no Chief Executive Officer is then serving or the Chief Executive Officer is absent, the President (if a director), or, in the absence of any such person, a chairperson of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in the Secretary’s absence, any Assistant Secretary or other officer, director or other person directed to do so by the person presiding over the meeting, shall act as secretary of the meeting.
SECTION 5.
OFFICERS
Section 5.1 OFFICERS DESIGNATED**.** The officers of the Corporation shall include, if and when designated by the Board, the Chief Executive Officer, the President, the Secretary and the Treasurer. The Board may also appoint one or more Assistant Secretaries and Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem appropriate or necessary. The Board may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the Corporation at any one time unless specifically prohibited therefrom by applicable law, the Certificate of Incorporation or the Bylaws.
Section 5.2TENURE AND DUTIES OF OFFICERS.
(a) General. All officers shall hold office at the pleasure of the Board and until their successors shall have been duly elected and qualified, subject to such officer’s earlier death, resignation or removal. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board or by a committee thereof to which the Board has delegated such responsibility or, if so authorized by the Board, by the Chief Executive Officer or another officer of the Corporation.
(b) Duties Of Chief Executive Officer. The Chief Executive Officer shall preside, if a director, at all meetings of the Board, unless a Chairperson of the Board has been appointed and is present thereat. The Chief Executive Officer shall be the chief executive officer of the Corporation and, subject to the supervision, direction and control of the Board, shall have the general powers and duties of supervision, direction, management and control of the business and officers of the Corporation as are customarily associated with the position of Chief Executive Officer. To the extent that a Chief Executive Officer has been appointed and no President has been appointed, all references in the Bylaws to the President shall be deemed references to the Chief Executive Officer. The Chief Executive Officer shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board shall designate from time to time.
(c) Duties of President. The President shall preside, if a director, at all meetings of the Board, unless a Chairperson of the Board or Chief Executive Officer has been appointed and is present and willing to act. Unless another officer has been appointed Chief Executive Officer of the Corporation, the President shall be the chief executive officer of the Corporation and, subject to the supervision, direction and control of the Board, shall have the general powers and duties
17
of supervision, direction, management and control of the business and officers of the Corporation as are customarily associated with the position of chief executive officer. **** The President shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board (or the Chief Executive Officer, if the Chief Executive Officer and President are not the same person and the Board has delegated the designation of the President’s duties to the Chief Executive Officer) shall designate from time to time.
(d) Duties of Secretary and Assistant Secretary. The Secretary shall attend all meetings of the stockholders and of the Board and shall record, or cause to be recorded, all acts, votes and proceedings thereof in the minute books of the Corporation. The Secretary shall give, or cause to be given, notice in conformity with the Bylaws of all meetings of the stockholders and of all meetings of the Board and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in the Bylaws and other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President may direct any Assistant Secretary or other officer to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.
(e) Duties of Treasurer and Assistant Treasurer. The Treasurer shall keep or cause to be kept the books of account of the Corporation in a thorough and proper manner and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board, the Chief Executive Officer or the President. The Treasurer, subject to the order of the Board, shall have the custody of all funds and securities of the Corporation. The Treasurer shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President may direct any Assistant Treasurer or other officer to assume and perform the duties of the Treasurer in the absence or disability of the Treasurer, and each Assistant Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.
Section 5.3 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 any provision hereof.
Section 5.4 RESIGNATIONS**.** Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board, the Chairperson of the Board, the Chief Executive Officer, the President or the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the Corporation under any contract with the resigning officer.
18
Section 5.5 REMOVAL**.** Any officer may be removed from office at any time, either with or without cause, by the Board, or by any duly authorized committee thereof or any officer upon whom such power of removal may have been conferred by the Board.
SECTION 6.
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY
THE CORPORATION
Section 6.1 EXECUTION OF CORPORATEINSTRUMENTS**.** The Board may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute, sign or endorse on behalf of the Corporation any corporate instrument or document, or to sign on behalf of the Corporation the corporate name without limitation, or to enter into contracts on behalf of the Corporation, except where otherwise provided by applicable law or the Bylaws, and such execution or signature shall be binding upon the Corporation.
(a) All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall be signed by such person or persons as the Board shall from time to time authorize so to do.
(b) Unless otherwise specifically determined by the Board or otherwise required by applicable law, the execution, signing or endorsement of any corporate instrument or document by or on behalf of the Corporation may be effected manually, by facsimile or (to the extent not prohibited by applicable law and subject to such policies and procedures as the Corporation may have in effect from time to time) by electronic signature.
(c) Unless authorized or ratified by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
Section 6.2 VOTING OF SECURITIES OWNED BYTHE CORPORATION**.** All stock and other securities of or interests in other corporations or entities owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted, and all proxies and consents with respect thereto shall be executed, by the person authorized so to do by resolution of the Board, or, in the absence of such authorization, by the Chairperson of the Board, the Chief Executive Officer, or the President.
SECTION 7.
SHARES OF STOCK
Section 7.1 FORM AND EXECUTION OFCERTIFICATES**.** The shares of the Corporation shall be represented by certificates, or shall be uncertificated if so provided by resolution or resolutions of the Board. Certificates for the shares of stock of the Corporation, if any, shall be in such form **** as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the Corporation represented by certificates **** shall be entitled to have a certificate signed by or in the name of the Corporation by any two authorized officers of the Corporation (including, without limitation, the Chairperson of the Board, the Chief Executive Officer, the President, the Treasurer, any Assistant Treasurer, the Secretary and any Assistant Secretary), certifying the number, and the class or series, of shares owned by such holder in the Corporation in certificated form. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile 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 with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.
19
Section 7.2 LOSTCERTIFICATES**.** The Corporation may issue a new certificate or certificates or uncertificated shares 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 by the person claiming the certificate of stock to be lost, stolen, or destroyed. The Corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to give the Corporation a bond (or other adequate security) sufficient to indemnify the Corporation against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen, or destroyed or the issuance of such new certificate(s) or uncertificated shares.
Section 7.3 TRANSFERS.
(a) Transfers of record of shares of stock of the Corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or certificates for a like number of shares.
(b) The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes or series of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes or series owned by such stockholders in any manner not prohibited by the DGCL.
Section 7.4 FIXING RECORD DATES.
(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, subject to applicable law, not be more than 60 nor less than ten days before the date of such meeting. If the Board so fixes a record date for determining the stockholders entitled to notice of any meeting of stockholders, 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 the record date for determining the stockholders entitled to notice of such meeting, that a later date on or before the date of the meeting shall be the record date for determining the stockholders entitled to vote at such meeting. 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 shall 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 stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determining the stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determining the stockholders entitled to vote in accordance with the provisions of this Section 7.4(a).
20
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or 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, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating to such action.
Section 7.5 LOCK-UP.
(a) Subject to Section 7.5(b), the holders (the “Lock-Up **** Holders”) of shares of Common Stock (i) issued as consideration pursuant to that certain Agreement and Plan of Merger and Reorganization, dated on or about September 8, 2025, by and among the Corporation, AH Merger Sub I, Inc., a Delaware corporation, AH Merger Sub II, LLC, a Delaware limited liability company, and ColdQuanta, Inc., a Delaware corporation (the “Merger Agreement”), (ii) issued upon the settlement or exercise of stock options, restricted stock awards or other equity awards assumed by the Corporation pursuant to the Merger Agreement, or (iii) otherwise held by Churchill Sponsor X LLC (“Sponsor”), the officers or directors of Sponsor or the Corporation, or its and their respective affiliates as of the date hereof (such shares referred to in this Section 7.5(a)(i)-(iv), the “Lock-Up Shares”) may not Transfer any Lock-Up Shares during the Lock-Up Period (the “Lock-Up”).
(b) Notwithstanding the provisions set forth in Section 7.5(a), the Lock-Up Holders or their respective Permitted Transferees may Transfer the Lock-Up Shares during the Lock-Up Period (i) as a bona fide gift or charitable contribution; (ii) to a trust, or other entity formed for estate planning purposes for the primary benefit of the spouse, domestic partner, parent, sibling, child or grandchild of such Lock-Up Holder or any other natural person with whom such Lock-Up Holder has a relationship by blood, marriage or adoption not more remote than first cousin; (iii) by will or intestate succession upon the death of the Lock-Up Holder; (iv) pursuant to a qualified domestic order, court order or in connection with a divorce settlement, or any legal, regulatory or other order; (v) if such Lock-Up Holder is a corporation, partnership (whether general, limited or otherwise), limited liability company, trust or other business entity, (A) to another corporation, partnership, limited liability company, trust or other business entity that controls, is controlled by or is under common control or management with the Lock-Up Holder, or (B) to partners, limited liability company members or stockholders of the Lock-Up Holder, including, for the avoidance of doubt, where the Lock-Up Holder is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership; (vi) if such Lock-Up Holder is a trust, to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust; (vii) to a nominee or custodian of a person or entity to whom a disposition or Transfer would be permissible under clauses (i) through (vi) of this Section 7.5(b); (viii) as a pledge or other grant of a security interest in Lock-Up Shares to one or more financial or lending institutions as collateral or security in connection with any bona fide loans, advances or extensions of credit or debt transaction (or enforcement thereunder) entered into by the Lock-Up Holder or any of its affiliates, or any refinancings thereof, and any Transfers of such Lock-Up Shares upon foreclosure thereof, so long as the applicable Transferee agrees in writing to be bound by the restrictions set forth herein; (ix) pursuant to a bona fide third-party tender offer, merger, stock sale, recapitalization, consolidation or other transaction involving a change in control of the Corporation; provided, however, that if such tender offer, merger, stock sale, recapitalization, consolidation or other such transaction is not completed, the Lock-Up Shares shall remain subject to the Lock-Up; (x) the establishment of a trading plan pursuant to Rule 10b5-1 promulgated under the 1934 Act;
21
provided, however, that such plan does not provide for the Transfer of Lock-Up Shares during the Lock-Up Period; (xi) to the Corporation in connection with the repurchase of such Lock-Up Holder’s shares in connection with the termination of the Lock-Up Holder’s employment with the Corporation or any subsidiary of the Corporation pursuant to contractual agreements with the Corporation; (xii) to satisfy tax withholding obligations in connection with the exercise of options to purchase shares of Common Stock of the Corporation or the vesting or settlement of stock-based awards of the Corporation; (xiii) in payment on a “net exercise” or “cashless” basis of the exercise or purchase price with respect to the exercise of options to purchase shares of Common Stock; or (xiv) from and after the occurrence of a Triggering Event. In addition, if determined by the Board within two business days following the closing date of the merger transactions contemplated by the Merger Agreement in order to satisfy exchange listing requirements, the Lock-Up shall not apply to 100 shares of Common Stock held by each Lock-Up Holder.
(c) In order to enforce this Section 7.5, the Corporation may impose stop transfer instructions with respect to the Lock-Up Shares until the end of the Lock-Up Period.
(d) Notwithstanding the other provisions set forth in this Section 7.5, the Board (including, for the avoidance of doubt and to the fullest extent permitted by law, a duly authorized committee thereof) may, in its sole discretion, determine to waive, amend, or repeal the Lock-Up obligations set forth herein; provided that, for so long as at least one director designated by Sponsor is then serving on the Board, any decision by the Board (or such committee) to waive, amend, or repeal the Lock-Up obligations set forth herein shall include the affirmative vote or consent of at least one director designated by Sponsor.
(e) For purposes of this Section 7.5,
(i) “Common Stock” means the common stock, par value $0.0001 per share, of the Corporation;
(ii) “Lock-Up Period” means the period beginning on the closing date of the merger transactions contemplated by the Merger Agreement and ending on the date that is one hundred eighty (180) days thereafter;
(iii) “Permitted Transferees” means any person or entity to whom such Lock-Up Holder is permitted to Transfer shares of Common Stock prior to the expiration of the Lock-Up Period pursuant to Section 7.5(b)(i)-(xii);
(iv) “Transfer” means to (A) exchange, transfer, assign, lend, sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the 1934 Act with respect to, any security, or any right or interest therein, (B) enter 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 (C) publicly announce any intention to effect any transaction specified in clause (A) or (B);
(v) “Triggering Event” means the VWAP of the Corporation’s Common Stock is at any time greater than or equal to $12.00 for any fifteen (15) trading days within any one hundred eighty (180) trading day period (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to the Corporation’s Common Stock); and
22
(vi) “VWAP” means for any security as of any trading day means the dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded during such trading day beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average). If the foregoing does not apply, “VWAP” shall mean the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during such trading day beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg. If no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, “VWAP” shall mean the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by OTC Markets Group Inc for such trading day. If the VWAP cannot be calculated for such security on such date(s) on any of the foregoing bases, the VWAP of such security on such shall be the fair market value per share on such day as reasonably determined by the Board (including for the avoidance of doubt a duly authorized committee thereof).
Section 7.6 REGISTERED STOCKHOLDERS**.** The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
Section 7.7 ADDITIONAL POWERS OF THEBOARD**.** In addition to, and without limiting, the powers set forth in the Bylaws, the Board shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock, subject to the provisions of the DGCL, other applicable law, the Certificate of Incorporation and the Bylaws. The Board may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.
SECTION 8.
OTHERSECURITIES OF THE CORPORATION
Section 8.1 EXECUTION OF OTHERSECURITIES**.** All bonds, debentures and other corporate securities of the Corporation, other than stock certificates (covered in Section 7.1), may be signed by the Chairperson of the Board, the Chief Executive Officer, or the President, or such other person as may be authorized by the Board; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the Corporation or such other person as may be authorized by the Board, or bear imprinted thereon the facsimile signature of such person. In
23
case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the Corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the Corporation.
SECTION 9.
DIVIDENDS
Section 9.1 DECLARATION OF DIVIDENDS**.** Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board. Dividends may be paid in cash, in property, or in shares of capital stock or other securities of the Corporation, subject to the provisions of the Certificate of Incorporation and applicable law.
Section 9.2 DIVIDEND RESERVE**.** Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board from time to time, in its absolute discretion, determines proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose or purposes as the Board shall determine to be conducive to the interests of the Corporation, and the Board may modify or abolish any such reserve in the manner in which it was created.
SECTION 10.
FISCAL YEAR
Section 10.1 FISCAL YEAR**.** The fiscal year of the Corporation shall be fixed by resolution of the Board and may be changed by the Board.
SECTION 11.
INDEMNIFICATION
Section 11.1INDEMNIFICATION OF DIRECTORS, EXECUTIVE OFFICERS, OTHER OFFICERS, EMPLOYEES AND OTHERAGENTS.
(a) Directors **** and Executive Officers . The Corporation shall indemnify to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended (but, in the case of any such amendment, 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), any person who was or is made or is threatened to be made a party or is otherwise involved in a Proceeding, by reason of the fact that such person is or was a director or executive officer (for the purposes of this Section 11.1, “executive officer” has the meaning defined in Rule 3b-7 promulgated under the 1934 Act) of the Corporation, or while serving as a director or executive officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, whether the basis of such Proceeding is alleged action
24
in an official capacity as a director or executive officer or in any other capacity while serving as a director or executive officer, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, that the Corporation will not be required to indemnify or advance expenses to any director or executive officer in connection with any Proceeding (or part thereof) initiated by such person unless (i) the Proceeding (or part thereof) was authorized by the Board or (ii) the Proceeding (or part thereof) is initiated to enforce rights to indemnification or advancement of expenses as provided under subsection (d) of this Section 11.1 or is a compulsory counterclaim brought by such person.
Any reference to an officer of the Corporation in this Section 11.1 shall be deemed to refer exclusively to the Chief Executive Officer, President, Secretary, Treasurer and any other officer of the Corporation appointed by the Board pursuant to Section 5 of these Bylaws, and any reference to an officer of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be deemed to refer exclusively to an officer appointed by the board of directors or equivalent governing body of such other entity pursuant to the certificate of incorporation and bylaws or equivalent organizational documents of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. The fact that any person who is or was an employee of the Corporation or an employee of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, but not an officer thereof as described in the preceding sentence, has been given or has used the title of “Vice President” or any other title that could be construed to suggest or imply that such person is or may be such an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall not result in such person being constituted as, or being deemed to be, such an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for purposes of this Section 11.1.
(b) Other Officers, Employees and Other Agents. The Corporation shall have power to indemnify and advance expenses to its other officers, employees and other agents to the fullest extent permitted by the DGCL.
(c) Expenses. The Corporation shall advance to any current or former director or executive officer of the Corporation, or to any person, who while serving as a director or executive officer of the Corporation, is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, prior to the final disposition of the Proceeding, promptly following request therefor, all expenses incurred by such person in defending (or participating as a witness in) any Proceeding referred to in Section 11.1(a), or in connection with a Proceeding (or part thereof) brought to establish or enforce a right to indemnification or advancement of expenses under subsection (d) of this Section 11.1, provided, however, that any advancement of expenses incurred by a current or former director or executive officer in such director’s or executive officer’s capacity as a director or executive officer will be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it is ultimately determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified or entitled to advancement for such expenses under this Section 11.1 or otherwise.
25
(d) Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to current and former directors and executive officers under this Section 11.1 will be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the Corporation and such director or executive officer. Any right to indemnification or advancement of expenses granted by this Section 11.1 to a current or former director or executive officer will be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advancement of expenses is denied, in whole or in part, (ii) no disposition of a claim for indemnification is made within 60 days of request therefor, or (iii) no disposition of a claim for an advance is made within 30 days of request therefor.
The indemnitee in such enforcement action, if successful in whole or in part, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, **** will be entitled to be paid also the expense of prosecuting or defending the claim to the fullest extent permitted by the DGCL.
In (i) any suit brought to enforce a right to indemnification hereunder (but not in a suit brought to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the DGCL.
Neither the failure of the Corporation (including its Board, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the indemnitee is proper in the circumstances because such person has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board, independent legal counsel or its stockholders) that the indemnitee has not met such applicable standard of conduct, will be a defense to the action or create a presumption that the indemnitee has not met the applicable standard of conduct. In any suit brought by a current or former director or executive officer 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 director or executive officer is not entitled to be indemnified, or to such advancement of expenses, under this Section 11.1 or otherwise is on the Corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any person by this Section 11.1 are not exclusive of any other right that such person may have or hereafter acquire under any applicable law, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL.
(f) Survival of Rights. The rights conferred on any person by this Section 11.1 will continue as to a person who has ceased to be a director or executive officer and will inure to the benefit of the heirs, executors and administrators of such a person.
(g) Insurance. To the fullest extent permitted by the DGCL, the Corporation may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Section 11.1.
(h) Amendments. Any repeal or modification of this Section 11.1 is only prospective and does not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any Proceeding against any current or former director or executive officer of the Corporation.
26
(i) Saving Clause. If this Section 11 or any portion hereof is invalidated on any ground by any court of competent jurisdiction, then the Corporation will nevertheless indemnify and advance expenses to each director and executive officer to the full extent not prohibited by any applicable portion of this Section 11 that has not been invalidated, or by any. If this Section 11 is invalid due to the application of the indemnification and advancement provisions of another jurisdiction, then the Corporation will indemnify and advance expenses to each director and executive officer **** to the full extent under applicable law.
(j) Certain Definitions. For the purposes of this Section 11, the following definitions apply:
(i) The term “Proceeding” is to be broadly construed and includes, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
(ii) The term “expenses” is to be broadly construed and includes, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
(iii) The term the “Corporation” includes, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, stands in the same position under the provisions of this Section 11 with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(iv) References to “fines” include any excise taxes assessed on a person with respect to an employee benefit plan.
SECTION 12.
NOTICES
Section 12.1NOTICES.
(a) Notice to Stockholders. Notice to stockholders of stockholder meetings shall be given as provided in Section 3.4. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by applicable law, notice to stockholders for purposes other than stockholder meetings may be sent by U.S. mail or courier service, facsimile or by electronic mail or other means of electronic transmission in accordance with Section 232 of the DGCL.
27
(b) Notice to Directors. Any notice required to be given to any director may be given by the method stated in subsection (a) or as otherwise provided in the Bylaws, with notice other than one that is delivered personally to be sent to such address or electronic mail address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known address or electronic mail address of such director.
(c) Affidavit of Mailing. An affidavit of notice, executed by a duly authorized and competent employee of the Corporation or its transfer agent appointed with respect to the class of stock affected, or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(d) Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.
(e) Notice to Person with Whom Communication is Unlawful. Whenever notice is required to be given, under applicable law or any provision of the Certificate of Incorporation or Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
(f) Notice to Stockholders Sharingan Address. Except as otherwise prohibited under the DGCL, any notice given under the provisions of the DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the Corporation within 60 days of having been given notice by the Corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the Corporation.
(g) Waiver. Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation or the Bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or the Bylaws.
28
SECTION 13.
AMENDMENTS
Section 13.1 AMENDMENTS**.** Subject to the limitations set forth in Section 11.1(h) or the Certificate of Incorporation, the Board is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. The stockholders also shall have power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock (as defined in the Certificate of Incorporation)), such action by stockholders shall require the affirmative vote of the holders of at least 66^2^/3% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon, voting together as a single class.
29
EX-4.5
Exhibit 4.5
| NUMBER | SHARES |
|---|---|
| C- |
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP [●]
INFLEQTION, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK
This Certifies that is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $0.0001
EACH OF THE COMMON STOCK OF
INFLEQTION, INC.
(THE“CORPORATION”)
transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this
certificate properly endorsed.
This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.
Witness the facsimile signatures of its duly authorized officers.
Dated:
| Chief Executive Officer | Chief Financial Officer |
|---|
-1-
INFLEQTION, INC.
Upon written request of the recordholder of this certificate to the Corporation at its principal place of business or registered office, the Corporation will furnish without charge to each recordholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof of the Corporation and the qualifications, limitations, or restrictions of such preferences and/or rights. This certificate and the shares represented thereby are issued and shall be held subject to all the provisions of the certificate of incorporation and bylaws of the Corporation and all amendments thereto and resolutions of the Board of Directors providing for the issue of securities (copies of which may be obtained from the secretary of the Corporation), to all of which the holder of this certificate by acceptance hereof assents.
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
| TEN COM | — as tenants in common | ||||
|---|---|---|---|---|---|
| TEN ENT | — as tenants by the entireties | UNIF GIFT MIN ACT— | Custodian | ||
| JT TEN | — as joint tenants with right of survivorship and not as tenants in common | (Cust) | (Minor) | ||
| under Uniform Gifts to Minors | |||||
| Act | |||||
| (State) |
Additional abbreviations may also be used though not in the above list.
For value received, hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER(S) OF ASSIGNEE(S))
(PLEASE PRINT OR TYPEWRITE NAME(S) AND ADDRESS(ES), INCLUDING ZIP CODE, OF ASSIGNEE(S))
-2-
Shares of the common stock represented by the within Certificate, and does hereby irrevocably constitute and appoint
Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.
Dated:
Shareholder
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
| Signature(s) Guaranteed: |
|---|
| By |
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 (OR ANY SUCCESSOR RULE)).
-3-
EX-10.6
Exhibit 10.6
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into this 8th day of September, 2025, by and between Churchill Capital Corp X, a Cayman Islands exempted company (the “Issuer”) and the undersigned (the “Subscriber” and, together with Issuer, the “Parties” and each, a “Party”). Defined terms used but not otherwise defined herein shall have the respective meanings ascribed thereto in the Merger Agreement (as defined below).
WHEREAS, the Issuer, AH Merger Sub I, Inc., a Delaware corporation (“Merger Sub I”), AH Merger Sub II, LLC, a Delaware limited liability company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”) and ColdQuanta, Inc., a Delaware corporation (“ColdQuanta”), will, following the execution of this Subscription Agreement, enter into that certain Agreement and Plan of Merger and Reorganization, dated as of September 8, 2025 (as amended, modified, supplemented or waived from time to time in accordance with its terms, the “Merger Agreement”, pursuant to which, inter alia, (i) Merger Sub I will be merged with and into ColdQuanta, with ColdQuanta surviving as a wholly owned subsidiary of the Issuer (the “SurvivingCorporation”) (the “First Merger”) and (ii) immediately following the First Merger, the Surviving Corporation will be merged with and into Merger Sub II, with Merger Sub II continuing as the surviving entity and wholly owned subsidiary of the Issuer (the “Second Merger” and, together with the First Merger, the “Mergers”), on the terms and subject to the conditions set forth therein (the Mergers together with the other transactions contemplated by the Merger Agreement , the “Transactions”);
WHEREAS, prior to the closing of the Transactions (the “Closing” and such date, the “Closing Date”), the Issuer will domesticate as a Delaware corporation in accordance with Section 388 of the General Corporation Law of the State of Delaware (“DGCL”) and Part XII of the Cayman Islands Companies Law (2020 Revision) (the “Domestication”);
WHEREAS, in connection with the Transactions, Subscriber is obliged to subscribe for and purchase from the Issuer a number of shares (“Shares”) of the Issuer’s common stock, par value $0.0001 per share (the “common stock”) equal to (A) the number of “Nominal Shares”^^set forth on the signature page hereto less (B) the number of Offset Shares (as defined in Section 13.1), for a purchase price of $10.00 per share (the “Per Share Price” and the aggregate purchase price for all of the Shares being purchased, the “Purchase Price”), and the Issuer has agreed to issue to Subscriber the Shares in consideration for the payment of the Purchase Price therefore by or on behalf of Subscriber to the Issuer, all on the terms and conditions set forth herein; and
WHEREAS, certain other “qualified institutional buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) or institutional “accredited investors” (as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) (each, an “Other Subscriber”) have, severally and not jointly, entered into or are substantially concurrently entering into separate subscription agreements with the Issuer (the “Other SubscriptionAgreements”), pursuant to which such Other Subscribers have agreed to purchase common stock on the Closing Date at the same per share purchase price as Subscriber, and the aggregate amount of securities to be sold by the Issuer pursuant to this Subscription Agreement and the Other Subscription Agreements equals, as of the date hereof, [●] shares of common stock.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the Parties hereto hereby agree as follows:
If there is more than one Subscriber identified on the signature page, for ease of administration, this single Subscription Agreement is being executed so as to enable each such Subscriber to enter into a Subscription Agreement, severally, but not jointly. The Parties agree that (i) the Subscription Agreement shall be treated as if it were a separate agreement with respect to each Subscriber listed on the signature page, as if each Subscriber
entity had executed a separate Subscription Agreement naming only itself as Subscriber, and (ii) no Subscriber listed on the signature page shall have any liability under the Subscription Agreement for the obligations of any Other Subscriber so listed.
Subscription. Subject to the terms and conditions hereof, at the Closing, Subscriber hereby agrees, following the Domestication and upon the substantially concurrent consummation of the Transactions, to subscribe for and purchase, and the Issuer hereby agrees to issue and sell to Subscriber, upon the payment of the Purchase Price, the Shares (such subscription and issuance, the “Subscription”). Subscriber acknowledges and agrees that, as a result of the Domestication, the Shares that will be purchased by Subscriber and issued by the Issuer pursuant to this Subscription Agreement shall be shares of common stock in a Delaware corporation (and not, for the avoidance of doubt, ordinary shares in a Cayman Islands exempted company).
Representations, Warranties and Agreements.
2.1 Subscriber’s Representations, Warranties and Agreements. To induce the Issuer to issue the Shares to Subscriber, Subscriber hereby represents and warrants to the Issuer and acknowledges and agrees with the Issuer as follows:
2.1.1 If Subscriber is not an individual, Subscriber has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement. If Subscriber is an individual, Subscriber has the authority to enter into, deliver and perform its obligations under this Subscription Agreement.
2.1.2 If Subscriber is not an individual, this Subscription Agreement has been duly authorized, validly executed and delivered by Subscriber. If Subscriber is an individual, the signature on this Subscription Agreement is genuine, and Subscriber has legal competence and capacity to execute the same. Assuming that this Subscription Agreement constitutes the valid and binding agreement of the Issuer, this Subscription Agreement is enforceable against Subscriber in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
2.1.3 The execution, delivery and performance by Subscriber of this Subscription Agreement and the consummation of the transactions contemplated hereby do not and will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Subscriber or any of its subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber or any of its subsidiaries is a party or by which Subscriber or any of its subsidiaries is bound or to which any of the property or assets of Subscriber or any of its subsidiaries is subject, which would reasonably be expected to have a material adverse effect on the legal authority of Subscriber to enter into and timely perform its obligations under this Subscription Agreement (a “Subscriber Material Adverse Effect”), (ii) if Subscriber is not an individual, result in any violation of the provisions of the organizational documents of Subscriber or any of its subsidiaries or (iii) result in any violation of any statute or any Governmental Order, rule or regulation of any Governmental Authority having jurisdiction over Subscriber or any of its subsidiaries or any of their respective properties that would reasonably be expected to have a Subscriber Material Adverse Effect.
2.1.4 Subscriber (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) satisfying the applicable requirements set forth on Schedule I, (ii) is aware that the Subscription is being made in reliance on a private placement exemption from registration under the Securities Act and is acquiring the Shares only for its own account and not for the account of others, or if Subscriber is subscribing for the Shares as a fiduciary or agent for one or more investor accounts over which
2
Subscriber exercises sole discretion, each owner of such account is a qualified institutional buyer or accredited investor, and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations, warranties and agreements herein on behalf of each owner of each such account and (iii) is not acquiring the Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and shall provide the requested information on Schedule I following the signature page hereto). Subscriber is not an entity formed for the specific purpose of acquiring the Shares. Subscriber understands that the offering of the Shares hereunder (the “offering”) meets the exemptions from filing under FINRA Rule 5123(b)(1)(C) or (J).
2.1.5 Subscriber (i) is an institutional account as defined in FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities and (iii) has exercised independent judgment in evaluating its participation in the Subscription. Accordingly, Subscriber understands that the Subscription meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b).
2.1.6 Subscriber understands that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the offer and sale of the Shares has not been registered under the Securities Act or any other securities laws of the United States or any other jurisdiction. Subscriber understands that the Shares may not be resold, transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur solely outside the United States within the meaning of Regulation S promulgated under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of cases (i) and (iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates representing the Shares shall contain a legend to such effect (the “Securities Act Legend”). Subscriber acknowledges and agrees that the Shares will not immediately be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act, and that the provisions of Rule 144(i) will apply to the Shares. Subscriber understands and agrees that the Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, Subscriber may not be able to readily resell the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. Subscriber understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Shares.
2.1.7 Subscriber understands and agrees that Subscriber is purchasing the Shares directly from the Issuer. Subscriber further acknowledges that there have been no representations, warranties, covenants or agreements made to Subscriber by the Issuer, ColdQuanta or any of their respective officers or directors, expressly or by implication, other than those representations, warranties, covenants and agreements expressly set forth in this Subscription Agreement. No disclosure or offering document has been prepared by J.P. Morgan Securities LLC or Citigroup Global Markets Inc. (“Citigroup”) or their respective affiliates (collectively, the “Placement Agents”) in connection with the offer and sale of the Shares. Subscriber acknowledges that neither of the Placement Agents nor any of their respective affiliates has provided Subscriber with any information or advice with respect to the Shares nor is such information or advice necessary or desired. Neither of the Placement Agents nor any of their respective directors, officers, employees, representatives or controlling persons has made any independent investigation with respect to the Issuer or ColdQuanta, the Shares or the completeness or accuracy of any information provided to Subscriber. Neither of the Placement Agents nor any of their respective affiliates has made or makes any representation as to Issuer or ColdQuanta or the quality or value of Issuer, ColdQuanta or the Shares. Subscriber agrees that neither of the Placement Agents nor any of their respective affiliates or any of their respective affiliates’ control persons, officers, directors or employees, shall be liable to Subscriber pursuant to this Subscription Agreement (including in contract, tort, under federal or state securities laws or otherwise) for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the Subscription. This undertaking is given freely and after obtaining independent legal advice.
3
2.1.8 Subscriber represents and warrants that its acquisition and holding of Shares will not constitute or result in a non-exempt prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or any applicable similar law.
2.1.9 In making its decision to subscribe for the Shares, Subscriber represents that it has relied solely upon the representations, warranties and covenants set forth in this Subscription Agreement, the SEC Documents and the independent investigation made by Subscriber. Without limiting the generality of the foregoing, Subscriber has not relied on any statements or other information provided by the Placement Agents or ColdQuanta concerning the Issuer, ColdQuanta or the offer and sale of the Shares. Subscriber acknowledges and agrees that Subscriber had access to, and an adequate opportunity to review, financial and other information as Subscriber deems necessary in order to make an investment decision with respect to the Shares, including with respect to the Issuer, ColdQuanta and the Transactions. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and such Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares. Subscriber has made its own assessment and has satisfied itself concerning the relevant tax and other economic considerations relevant to its investment in the Shares.
2.1.10 Subscriber became aware of this offering of the Shares solely by means of direct contact between Subscriber and the Issuer, the Placement Agents or their respective representatives. Subscriber did not become aware of this offering of the Shares, nor were the Shares offered to Subscriber, by any other means. Subscriber acknowledges that the Issuer represents and warrants that the Shares (i) were not offered by any form of general solicitation or general advertising, including methods described in Rule 502(c) of Regulation D promulgated under the Securities Act and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
2.1.11 Subscriber acknowledges that it is aware that there are substantial risks incident to the subscription for, and ownership of, the Shares, including those set forth in the SEC Documents (as defined below) and the investor presentation provided by the Issuer. Subscriber is able to fend for itself in the transactions contemplated herein, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares, and has sought such accounting, legal and tax advice as Subscriber has considered necessary to make an informed investment decision.
2.1.12 Without limiting the representations, warranties and covenants set forth in this Subscription Agreement, alone, or together with any professional advisor(s), Subscriber represents and acknowledges that Subscriber has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for Subscriber and that Subscriber is able, at this time and in the foreseeable future, to bear the economic risk of a total loss of Subscriber’s investment in the Issuer. Subscriber acknowledges specifically that a possibility of total loss exists.
2.1.13 Subscriber understands and agrees that no federal (U.S. or foreign) or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of an investment in the Shares.
2.1.14 Subscriber represents and warrants that Subscriber is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC (“OFAC List”), or a person or entity prohibited by any OFAC sanctions program, (ii) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 or (iii) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable Law, provided, that Subscriber is permitted to do so under applicable Law.
4
Subscriber represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent required, it maintains policies and procedures reasonably designed for the screening of its investors against the OFAC sanctions programs, including the OFAC List. Subscriber further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Shares are legally derived.
2.1.15 If Subscriber is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Code or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, Subscriber represents and warrants that neither the Issuer, nor any of its affiliates (the “Subscriber Parties”), has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Shares, and none of Subscriber Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Shares.
2.1.16 Except as expressly disclosed in a Schedule 13D or Schedule 13G (or amendments thereto) filed by such Subscriber, or a “group” comprised solely of Subscriber and its affiliates, with the Securities and Exchange Commission (the “Commission”) with respect to the “beneficial ownership” (as such term is defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of the Issuer’s Class A ordinary shares, Subscriber is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of equity securities of the Issuer (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).
2.1.17 Unless otherwise disclosed in advance to the Issuer, Subscriber (i) is not a “foreign person” within the meaning of the Defense Production Act of 1950, as amended, including all implementing regulations thereof (the “DPA”), (ii) is not “controlled” by a foreign person within the meaning of the DPA, and (iii) does not and will not permit any foreign person affiliate – whether affiliated as a limited partner or otherwise – to obtain through Subscriber any of the following within the meaning of the DPA: (a) access to any “material nonpublic technical information” in the possession of ColdQuanta; (b) membership or observer rights on the ColdQuanta Board of Directors (the “Board”) or equivalent governing body of ColdQuanta or the right to nominate an individual to a position on the ColdQuanta Board or equivalent governing body of ColdQuanta; (c) any “involvement,” other than through the voting of shares, in the “substantive decisionmaking” of ColdQuanta regarding (i) the use, development, acquisition, or release of “critical technology”; (ii) the use, development, acquisition, safekeeping, or release of “sensitive personal data” of U.S. citizens maintained or collected by ColdQuanta; or (iii) the management, operation, manufacture or supply of “covered investment critical infrastructure”; or (d) “control” of ColdQuanta.
2.1.18 No foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest (as defined in 31 C.F.R. Part 800.244) in the Issuer purchase and sale of the Shares hereunder such that a declaration to the Committee on Foreign Investment in the United States would be mandatory under 31 C.F.R. Part 800.401, and Subscriber will not have control (as defined in 31 C.F.R. Part 800.208) over the Issuer from and after the Closing as a result of the purchase and sale of the Shares hereunder.
2.1.19 [Reserved].
5
2.1.20 Subscriber has, and on the date that the Purchase Price would be required to be funded to the Issuer hereunder will have, sufficient immediately available funds to pay the Purchase Price. Subscriber is an individual or entity having total liquid assets and net assets in excess of the Purchase Price as of the date hereof and as of the date the Purchase Price would be required to be funded to the Issuer hereunder and was not formed for the purpose of acquiring the Shares.
2.1.21 [Reserved].
2.1.22 No broker, finder or other financial consultant has acted on behalf of Subscriber in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability on the Issuer.
2.1.23 Subscriber acknowledges that (i) the Issuer and the Placement Agents currently may have, and later may come into possession of, information regarding the Transaction and any of the Parties that is not known to Subscriber and that may be material to a decision to enter into this transaction to subscribe for the Shares (“Excluded Information”), (ii) Subscriber has determined to enter into this transaction to subscribe for the Shares notwithstanding its lack of knowledge of the Excluded Information, which Subscriber agrees need not be provided to it, and (iii) none of the Transaction Parties nor the Placement Agents shall have liability to Subscriber, and Subscriber hereby, to the extent permitted by law, waives and releases any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements it may have against any of the Transaction Parties and the Placement Agents with respect to the non-disclosure of the Excluded Information.
2.1.24 Subscriber acknowledges that certain information provided to it was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. Subscriber further acknowledges that such information and projections were prepared without the participation of the Placement Agents and that the Placement Agents do not assume responsibility for independent verification of, or the accuracy or completeness of, such information or projections.
2.1.25 Subscriber acknowledges that the Placement Agents and their respective directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Issuer, ColdQuanta or the Shares or the accuracy, completeness or adequacy of any information supplied to Subscriber by the Issuer. In connection with the issue and purchase of the Shares, the Placement Agents have not acted as Subscriber’s financial advisors or fiduciaries.
2.1.26 At the date of this Subscription Agreement, Subscriber beneficially owns the Currently Owned Offset Shares (as defined in Section 13.1).
2.1.27 Subscriber acknowledges and is aware that Citigroup is acting as placement agent in connection with the Subscription and capital markets advisor to Issuer in connection with the Transaction. Subscriber understands and acknowledges that Citigroups’s role as capital markets advisor to Issuer may give rise to potential conflicts of interest or the appearance thereof.
2.1.28 Subscriber acknowledges and agrees that (a) each Placement Agent is acting solely as Issuer’s placement agent in connection with the private placement of the Shares and is not acting as an underwriter or in any other capacity and is not and shall not be construed as a financial advisor or fiduciary of Subscriber, Issuer or any other person or entity in connection with the Transaction, (b) the Placement Agents have not made and will not make any representation or warranty, whether express or implied, of any kind or character and has not provided any advice or recommendation in connection with the Transaction or Subscription, and (c) the Placement Agents will have no responsibility with respect to (i) any representations, warranties or agreements made by any person or entity under or in connection with the Transaction, Subscription or any of the documents furnished pursuant thereto or in connection therewith, or the execution, legality, validity or enforceability (with respect to any person) or any thereof, or (ii) the business, affairs, financial condition, operations, properties or prospects of, or any other matter concerning Issuer, ColdQuanta, or the Transaction or Subscription.
6
2.1.29 As of the date hereof, Subscriber does not have, and during the 30-day period immediately prior to the date hereof Subscriber has not entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or short sale positions with respect to the securities of Issuer. Notwithstanding the foregoing, nothing in this Section 2.1.29 in the case of a Subscriber that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Subscriber’s assets, the representations set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Subscription Agreement.
2.2 Issuer’s Representations, Warranties and Agreements. To induce Subscriber to subscribe for the Shares, the Issuer hereby represents and warrants to Subscriber and agrees with Subscriber as follows:
2.2.1 The Issuer has been duly incorporated and is validly existing as an exempted company incorporated and in good standing under the laws of the Cayman Islands, with the requisite power and authority to own, lease and operate its assets and properties and conduct its business as it is now being conducted and to enter into, deliver and perform its obligations under this Subscription Agreement. As of the Closing Date, following the Domestication, the Issuer will be duly incorporated, validly existing as a corporation and in good standing under the laws of the State of Delaware with requisite power and authority to own, lease and operate its assets and properties and conduct its business as it is now being conducted.
2.2.2 The Shares have been duly authorized and, when issued and delivered to Subscriber against full payment for the Shares in accordance with the terms of this Subscription Agreement and registered with the Issuer’s transfer agent, the Shares will be validly issued, fully paid and non-assessable free and clear of all liens or other restrictions (other than those arising under applicable securities laws), and will not have been issued in breach or violation of or subject to any purchase option, right of first refusal, preemptive right, subscription right (or any similar right) or Contract created under the Issuer’s amended and restated certificate of incorporation, bylaws, under the DGCL or otherwise.
2.2.3 This Subscription Agreement has been duly authorized, validly executed and delivered by the Issuer and, assuming that this Subscription Agreement constitutes the valid and binding obligation of Subscriber, is the valid and binding obligation of the Issuer, is enforceable against the Issuer in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally and (ii) principles of equity, whether considered at law or equity.
2.2.4 The Issuer is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.
2.2.5 The execution, delivery and performance of this Subscription Agreement (including compliance by the Issuer with all of the provisions hereof), issuance and sale of the Shares and the consummation of the certain other transactions contemplated herein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer or any of its subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer or any of its subsidiaries is a party or by which the Issuer or any of its subsidiaries is bound or to which any of the property or assets of the Issuer or any of its subsidiaries is subject, which would reasonably be expected to have a material adverse effect on the business, properties, financial condition, stockholders’ equity or results of operations of the Issuer or ColdQuanta or their respective subsidiaries individually or taken as a whole and including the combined company after giving effect to the Transactions, or the legal authority or other ability of the Issuer to enter into and timely perform its obligations under this Subscription Agreement (an “Issuer Material Adverse Effect”), (ii) result in any violation of the provisions of the organizational documents of the Issuer or any of its subsidiaries, (iii) require any consent or approval that has not been given or other action that has not been taken by any person, in each case to the extent such consent, approval or other action would prevent, enjoin
7
or materially delay the performance of the Issuer under this Subscription Agreement, or (iv) result in any violation of any statute or any Governmental Order, rule or regulation of any Governmental Authority having jurisdiction over the Issuer or any of its subsidiaries or any of their respective properties that would reasonably be expected to have an Issuer Material Adverse Effect.
2.2.6 Neither the Issuer, nor any person acting on its behalf has, directly or indirectly, made any offers or sales of any Issuer securities or solicited any offers to buy any Issuer securities under circumstances that would adversely affect reliance by the Issuer on Section 4(a)(2) of the Securities Act for the exemption from registration for the transactions contemplated hereby or would require registration of the offer and sale of the issuance of the Shares under the Securities Act, or otherwise cause the offering of the Shares to be integrated with any other offering by the Issuer.
2.2.7 Neither the Issuer nor any person acting on its behalf has conducted any general solicitation or general advertising, including methods described in Rule 502(c) of Regulation D promulgated under the Securities Act, in connection with the offer or sale of any of the Shares and neither the Issuer nor any person acting on its behalf offered any of the Shares in a manner involving a public offering under, or in a distribution in violation of, the Securities Act or any state securities laws.
2.2.8 Concurrently with the execution and delivery of this Subscription Agreement, the Issuer is entering into the Other Subscription Agreements providing for the sale of an aggregate of [•] shares of common stock for an aggregate purchase price of $[•] (including the Shares purchased and sold under this Subscription Agreement). There are no Other Subscription Agreements, side letter agreements or other agreements or understandings (including written summaries of any oral understandings) with any Other Subscriber (other than Subscribers in connection with the Other Subscription Agreements) (collectively, the “PIPE Agreements”) which include terms and conditions that are materially more advantageous to any such Other Subscriber (as compared to Subscriber), other than such PIPE Agreements containing any of the following: (i) any rights or benefits granted to an Other Subscriber in connection with such Other Subscriber’s compliance with any law, regulation or policy specifically applicable to such Other Subscriber or in connection with the taxable status of an Other Subscriber, (ii) any rights or benefits which are personal to an Other Subscriber based solely on its place of organization or headquarters, organizational form of, or other particular restrictions applicable to, such Other Subscriber, (iii) any rights with respect to the confidentiality or disclosure of an Other Subscriber’s identity, or (iv) any rights or benefits granted to the Issuer, ColdQuanta or any of their respective affiliates or any of their respective partners, members, shareholders, employees or agents; provided that, no such Other Subscription Agreements, side letter agreements or other agreements or understandings (including written summaries of any oral understandings) with any Other Subscriber provide for a purchase price per share of common stock more favorable to any such Other Subscriber (as compared to Subscriber).
2.2.9 As of the date of this Subscription Agreement, the authorized capital stock of the Issuer consists of (a) 500,000,000 Class A ordinary shares, (b) 50,000,000 Class B ordinary shares; and (c) 5,000,000 preference shares, par value $0.0001 per share. As of the date hereof: (i) no preference shares are issued and outstanding; (ii) 29,475,000 Class A ordinary shares are issued and outstanding; (iii) 7,187,500 Class B ordinary shares are issued and outstanding; (iv) 181,250 warrants to purchase Class A ordinary shares (the “Private Placement Warrants”) are outstanding; and (v) 7,187,500 warrants to purchase Class A ordinary shares (the “Public Warrants”) are outstanding. All (i) issued and outstanding Class A ordinary shares and Class B ordinary shares have been duly authorized and validly issued, are fully paid and are non-assessable, were issued in compliance in all material respects with applicable Law, were not issued in breach or violation of any purchase option, right of first refusal, preemptive right, subscription right (or any similar right) or Contract and (ii) outstanding Private Placement Warrants and Public Warrants have been duly authorized and validly issued, are fully paid, were issued in compliance in all material respects with applicable Law, were not issued in breach or violation of any purchase option, right of first refusal, preemptive right, subscription right (or any similar right) or Contract. Except as set forth above and pursuant to the Other Subscription Agreements and the Merger Agreement, there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Issuer any Class A ordinary shares, or Class B
8
ordinary shares, or any other equity interests in the Issuer, or securities convertible into or exchangeable or exercisable for such equity interests. As of the date hereof, other than Merger Subs, the Issuer has no subsidiaries and does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated or unincorporated. There are no stockholder agreements, voting trusts or other agreements or understandings to which the Issuer is a party or by which it is bound relating to the voting of any securities of the Issuer, other than (A) as set forth in the SEC Documents and (B) as contemplated by the Merger Agreement and the other Transaction Agreements.
2.2.10 Assuming the accuracy of Subscriber’s representations and warranties set forth in Section 2.1, (x) no registration under the Securities Act is required for the offer and sale of the Shares by the Issuer to Subscriber and (y) no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local Governmental Authority is required on the part of the Issuer in connection with the consummation of the transactions contemplated by this Subscription Agreement.
2.2.11 The Issuer has made available to Subscriber (including via the Commission’s EDGAR system) a true, correct and complete copy of each form, report, statement, schedule, prospectus, proxy, registration statement and other documents filed by the Issuer with the Commission prior to the date of this Subscription Agreement (the “SECDocuments”), which SEC Documents, as of their respective filing dates, complied in all material respects with the requirements of the Exchange Act applicable to the SEC Documents and the rules and regulations of the Commission promulgated thereunder and applicable to the SEC Documents. As of their respective dates, subject to being supplemented or amended from time to time, all SEC Documents required to be filed by the Issuer with the Commission prior to the date hereof complied in all material respects with the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder. None of the SEC Documents filed under the Exchange Act contained when filed or, if amended prior to the date of this Subscription Agreement, as of the date of such amendment with respect to those disclosures that are amended, any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Issuer has timely filed each report, statement, schedule, prospectus, and registration statement that the Issuer was required to file with the Commission since its inception and through the date hereof. As of the date hereof, there are no material outstanding or unresolved comments in comment letters from the Commission staff with respect to any of the SEC Documents.
2.2.12 There are no pending or, to the knowledge of the Issuer, threatened, Actions and, to the knowledge of Issuer, there are no pending or threatened investigations, in each case, against the Issuer, or otherwise affecting the Issuer or its respective assets, including any condemnation or similar proceedings, which, if determined adversely, would, individually or in the aggregate, (i) reasonably be expected to have an Issuer Material Adverse Effect or (ii) seek to restrain, enjoin, prevent, materially delay or otherwise materially impair the consummation of the Transactions. There is no unsatisfied judgment or any open injunction binding upon the Issuer which would, individually or in the aggregate, reasonably be expected to have an Issuer Material Adverse Effect.
2.2.13 The Issuer is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other Governmental Authority, self-regulatory organization or other person in connection with the issuance of the Shares pursuant to this Subscription Agreement, other than (i) filings with the Commission, including the filing of the Registration Statement (as defined below) pursuant to Section 4, and the filing of a Notice of Exempt Offering of Securities on Form D with the Commission under Regulation D under the Securities Act, if applicable, (ii) filings required by applicable state securities laws, (iii) those required by the Nasdaq, including with respect to obtaining approval of the Issuer’s stockholders, (iv) those required to consummate the Transactions as provided under the Merger Agreement, including those required in connection with the Domestication, and (v) the failure of which to obtain would not be reasonably be expected to have, individually or in the aggregate, an Issuer Material Adverse Effect.
9
2.2.14 As of the date hereof, the Issuer is in compliance with all applicable Law and has not received any written communication from a Governmental Authority that alleges that the Issuer is not in compliance with or is in default or violation of any applicable Law, in each case except where such non-compliance, default or violation would not reasonably be expected to have, individually or in the aggregate, an Issuer Material Adverse Effect.
2.2.15 The Class A ordinary shares of the Issuer are registered pursuant to Section 12(b) of the Exchange Act, and listed for trading on the Nasdaq under the symbol “CCCX”. Issuer is in compliance with the rules of the Nasdaq and there is no Action pending or, to the knowledge of Issuer, threatened against Issuer by the Nasdaq or the SEC with respect to any intention by such entity to deregister the Class A ordinary shares or terminate the listing of the Class A ordinary shares. The Issuer has taken no action that is designed to terminate the registration of the Class A ordinary shares under the Exchange Act except as contemplated by the Merger Agreement. Issuer has not received any notice from the Nasdaq or the SEC regarding the revocation of such listing or otherwise regarding the delisting or suspension of the Class A ordinary shares from the Nasdaq or the SEC and, as of the date hereof, the Class A ordinary shares are duly authorized for listing and eligible for continued trading on Nasdaq. There are no securities or instruments issued by or to which the Issuer is a party containing anti-dilution or similar provisions that will be triggered by the issuance of (i) the Shares or (ii) the common stock to be issued pursuant to any Other Subscription Agreement, in each case, that have not been or will not be validly waived on or prior to the Closing Date.
2.2.16 The Domestication will be duly effected prior to the Closing in accordance with applicable Law and the terms disclosed by the Issuer, and, upon the effectiveness of the Domestication, the Shares will automatically convert into duly authorized, validly issued, fully paid and non-assessable shares of common stock of the Issuer as a Delaware corporation.
2.2.17 As of the date hereof, there are no pending or, to the knowledge of the Issuer, threatened impediments, delays or adverse developments that would reasonably be expected to prevent, materially delay, or materially impair the completion of the Domestication.
2.2.18 The Issuer is not, and immediately after receipt of payment for the Shares and consummation of the Transactions will not be, required to be registered as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
2.2.19 Neither (i) the Issuer, any of its subsidiaries, affiliates, directors, officers, employees, or, to Issuer’s knowledge, any of its agents or representatives acting on its behalf in connection with this Subscription Agreement, nor (ii) to the Issuer’s knowledge, ColdQuanta or any of its subsidiaries, affiliates, directors, officers, employees, or agents or representatives acting on its behalf in connection with this Subscription Agreement is: (A) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC (“OFAC List”), or a person or entity prohibited by any OFAC sanctions program, (B) any person operating, organized or located in a country or territory which is itself the subject or target of comprehensive Sanctions (at the time of this Subscription Agreement, Cuba, Iran, North Korea, and the Crimea, Donetsk People’s Republic, and Luhansk People’s Republic regions of Ukraine) or (C) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. The Issuer has not heretofore engaged in any transaction to lend, contribute or otherwise make available funds or the funds of any joint venture partner or other person or entity towards any sales or operations in Cuba, Iran, North Korea, or the Crimea, Donetsk People’s Republic, or Luhansk People’s Republic regions of Ukraine or any other jurisdiction subject to comprehensive sanctions by OFAC or for the purpose of financing the activities of any person or entity currently subject to any U.S. sanctions administered by OFAC.
2.2.20 The Issuer has not been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
10
- Settlement Date and Delivery.
3.1 Subscription Closing.
3.1.1 The closing of the Subscription contemplated hereby (the “Subscription Closing”) shall occur on the date of, and immediately prior to, the consummation of the Transactions.
3.1.2 Subject to Section 3.1.3, upon written notice from (or on behalf of) the Issuer to Subscriber (the “Closing Notice”) at least five Business Days prior to the date that the Issuer reasonably expects all conditions to the Closing of the Transactions to be satisfied (the “Expected Subscription Closing Date”), Subscriber shall deliver to the Issuer, no later than three Business Days prior to the Expected Subscription Closing Date, the Purchase Price for the Shares, by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice , with such funds to be held by the Issuer in escrow until the Closing. If the Transactions are not consummated on or prior to the 10^th^ Business Day after the Expected Subscription Closing Date, unless Subscriber otherwise agrees in writing, the Issuer shall (to the extent such funds have been received as of such date) promptly return the Purchase Price to Subscriber by wire transfer of United States dollars in immediately available funds to an account specified by Subscriber. Notwithstanding such return, (i) a failure to close on the Expected Subscription Closing Date shall not, by itself, be deemed to be a failure of any of the conditions to Closing set forth in this Section 3 to be satisfied or waived on or prior to the Closing Date, and (ii) Subscriber shall remain obligated (A) to redeliver funds to the Issuer following the Issuer’s delivery to Subscriber of a new Closing Notice and (B) to consummate the Closing upon satisfaction of the conditions set forth in this Section 3. Unless otherwise agreed by ColdQuanta in writing, the Issuer shall deliver the Closing Notice at least two Business Days prior to the date of the Special Meeting. At the Closing, upon satisfaction (or, if applicable, waiver) of the conditions set forth in this Section 3, the Issuer shall deliver to Subscriber the Shares in certificated or book entry form (at the Issuer’s election), in the name of Subscriber (or its nominee in accordance with its delivery instructions) or to a custodian designated by Subscriber, as applicable.
3.1.3 For purposes of this Subscription Agreement, “Business Day” means any day that, in New York, New York, is neither a legal holiday nor a day on which banking institutions are generally authorized or required by law or regulation to close.
3.1.4 Between the date the Registration Statement is declared effective under the Securities Act (the “Effective Date”) and until sixty (60) days thereafter, the Issuer shall not issue or sell any Shares of common stock of the Issuer for capital raising purposes, in each case other than pursuant to this Agreement, the Other Subscription Agreements (or, in the event of a failure to fund under or termination of an Other Subscription Agreement, a replacement agreement on substantially the same terms with a substitute subscriber) or any other agreement entered into by the Issuer or any of its Subsidiaries after the date hereof and prior to the Effective Date. For the avoidance of doubt, the Issuer may issue shares of capital stock pursuant to the Merger Agreement or for other acquisitions or joint ventures and upon the conversion of securities, the exercise of warrants or options or the settlement of restricted stock or restricted stock units outstanding as of the Effective Date. In the event the Subscriber fails to fund on the Closing Date as required under this Agreement, this Section 3.1.4 shall automatically terminate.
3.2 Conditions to the Subscription Closing of the Issuer.
The Issuer’s obligations to issue the Shares at the Subscription Closing are subject to the fulfillment or written waiver by Issuer (to the extent permitted by applicable Law), on or prior to the date of the Subscription Closing (the “Subscription Closing Date”), of each of the following conditions:
3.2.1 Representations and Warranties Correct. The representations and warranties made by Subscriber in Section 2.1 hereof shall be true and correct in all material respects when made (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect,
11
which representations and warranties shall be true and correct in all respects), and shall be true and correct in all material respects on and as of the Subscription Closing Date (unless they specifically speak as of another date in which case they shall be true and correct in all material respects as of such date) (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect, which representations and warranties shall be true in all respects) with the same force and effect as if they had been made on and as of said date, but in each case without giving effect to consummation of the Subscription.
3.2.2 Compliance with Covenants. Subscriber shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by Subscriber pursuant to this Subscription Agreement at or prior to the Subscription Closing.
3.2.3 Closing of the Transactions. All conditions precedent to the Transaction Parties’ obligations to consummate, or cause to be consummated, the Transactions set forth in the Merger Agreement shall have been satisfied or waived by the party entitled to the benefit thereof under the Merger Agreement (other than those conditions that may only be satisfied at the consummation of the Transactions, but subject to satisfaction or waiver by such party of such conditions as of the consummation of the Transactions), and the Transactions will be consummated substantially concurrently with the Subscription Closing.
3.2.4 Legality. There shall not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any Governmental Authority, statute, rule or regulation enjoining or prohibiting the transactions contemplated by this Subscription Agreement.
3.2.5 Delivery of Form W-9 or Form W-8. Prior to or at the Subscription Closing Date, Subscriber shall deliver to the Issuer a duly completed and executed Internal Revenue Service Form W-9 or appropriate Form W-8.
3.3 Conditions to Subscription Closing of Subscriber.
Subscriber’s obligation to subscribe for the Shares at the Subscription Closing is subject to the fulfillment or written waiver by Subscriber (to the extent permitted by applicable Law), on or prior to the Subscription Closing Date, of each of the following conditions:
3.3.1 Representations and Warranties Correct. The representations and warranties made by the Issuer in Section 2.2 hereof shall be true and correct in all material respects when made (other than representations and warranties that are qualified as to materiality or Issuer Material Adverse Effect, which representations and warranties shall be true and correct in all respects), and shall be true and correct in all material respects on and as of the Subscription Closing Date (unless they specifically speak as of another date in which case they shall be true and correct in all material respects as of such date) (other than representations and warranties that are qualified as to materiality or Issuer Material Adverse Effect, which representations and warranties shall be true and correct in all respects) with the same force and effect as if they had been made on and as of said date, but in each case without giving effect to consummation of the Subscription.
3.3.2 Compliance with Covenants. The Issuer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by the Issuer at or prior to the Subscription Closing, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Issuer to consummate the Subscription Closing.
3.3.3 Closing of the Transactions. (i) All conditions precedent to the consummation of the Transactions set forth in the Merger Agreement shall have been satisfied or waived, by the party entitled to
12
the benefit thereof under the Merger Agreement (other than those conditions that may only be satisfied at the consummation of the Transactions, but subject to satisfaction or waiver by such party of such conditions as of the consummation of the Transactions) and (ii) the Transactions will be consummated substantially concurrently with the Subscription Closing.
3.3.4 Legality. There shall not be in force any statute, rule or regulation enjoining or prohibiting the transactions contemplated by this Subscription Agreement.
3.3.5 No Amendment to Merger Agreement. No amendment or modification of the Merger Agreement (as the same exists on the date hereof as provided to Subscriber) shall have occurred that would reasonably be expected to materially and adversely affect the economic benefits that Subscriber would reasonably expect to receive under this Subscription Agreement without having received Subscriber’s prior written consent .
- Registration Rights.
4.1 The Issuer agrees that, within 30 calendar days after the Closing (the “Filing Date”), the Issuer will file (or confidentially submit) with the Commission (at the Issuer’s sole cost and expense) a registration statement for a shelf registration on Form S-1 (the “Registration Statement”) registering the resale of the Shares that are eligible for registration (determined as of two Business Days prior to such filing) (the “Registrable Securities”), and the Issuer shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 90^th^ calendar day (or 150^th^ calendar day if the Commission notifies the Issuer that it will “review” the Registration Statement) following the Closing and (ii) the fifth (5^th^) Business Day after the date the Issuer is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Date”); provided, however, that the Issuer’s obligations to include the Registrable Securities in the Registration Statement are contingent upon Subscriber furnishing a completed and executed selling stockholders questionnaire in customary form to the Issuer that contains (a) the information required by Commission rules for a Registration Statement regarding Subscriber, (b) the securities of the Issuer held by Subscriber and (c) the intended method of disposition of the Registrable Securities (which shall be limited to non-underwritten public offerings) to effect the registration of the Registrable Securities. The Issuer will use commercially reasonable efforts to provide a draft of the Registration Statement to the Subscriber for review at least two (2) Business Days in advance of filing the Registration Statement and the Subscriber shall provide any comments on the Registration Statement to Issuer no later than the day which is one (1) Business Day preceding the filing date; provided that for the avoidance of doubt, in no event shall the Issuer be required to delay or postpone the filing of such Registration Statement as a result of or in connection with Subscriber’s review. Subscriber shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling stockholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement (i) during any customary blackout or similar period or as permitted hereunder and (ii) as may be necessary in connection with the preparation and filing of any post-effective amendment to the Registration Statement that is required to be filed with the Commission following the filing of the Issuer’s Annual Report for its first completed fiscal year following the effective date of the Registration Statement. For purposes of clarification, any failure by the Issuer to file the Registration Statement by the Filing Date or to effect such Registration Statement by the Effectiveness Date shall not otherwise relieve the Issuer of its obligations to file or effect the Registration Statement as set forth above in this Section 4.1. Notwithstanding the foregoing, if the Commission prevents the Issuer from including any or all of the Shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Shares by the applicable stockholders or otherwise, such Registration Statement shall register for resale such number of Shares which is equal to the maximum number of Shares as is permitted by the Commission. In such event, the number of Shares to be registered for each selling stockholder named in the Registration Statement shall be reduced pro rata among all such selling stockholders; provided that, if such limitation on the number of Shares to be included relates to a specific selling stockholder named in the Registration Statement, the number of Shares
13
included in the Registration Statement for such specific selling stockholder shall be reduced first before any other selling stockholder. As promptly as practicable after being permitted to register additional Shares under Rule 415 of the Securities Act, the Issuer shall amend the Registration Statement or file a new Registration Statement to register such additional Shares and cause such amendment or Registration Statement to become effective as promptly as practicable. Unless required under applicable Law and Commission rules, in no event shall Subscriber be identified as a statutory underwriter in the Registration Statement; provided, that if Subscriber is required to be so identified as a statutory underwriter in the Registration Statement, Subscriber will have an opportunity to withdraw its Registrable Securities from the Registration Statement.
4.2 In the case of the registration effected by the Issuer pursuant to this Subscription Agreement, the Issuer shall, upon reasonable written request of Subscriber, inform Subscriber as to the status of such registration. At its expense the Issuer shall:
4.2.1 except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to keep such registration, and any qualification, exemption or compliance under state securities laws which the Issuer determines to obtain, continuously effective with respect to Subscriber, and to keep the applicable Registration Statement or any subsequent shelf registration statement free of any material misstatements or omissions, until the earlier of the following: (i) Subscriber ceases to hold any Registrable Securities, (ii) the date all Registrable Securities held by Subscriber may be sold without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions which may be applicable to affiliates under Rule 144 and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) and (iii) three years from the date of effectiveness of the Registration Statement;
4.2.2 advise Subscriber as promptly as possible, and in any event within three (3) Business Days:
(a) when the Registration Statement or any post-effective amendment thereto has become effective;
(b) after it shall have received notice or obtained knowledge thereof, of the issuance by the Commission of any stop order suspending the effectiveness the Registration Statement or the initiation of any proceedings for such purpose;
(c) of the receipt by the Issuer of any notification with respect to the suspension of the qualification of the Registrable Securities included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
(d) subject to the provisions in this Subscription Agreement, of the occurrence of any event that requires the making of any changes in the Registration Statement or any prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, provided, however, that the Issuer shall not be required to disclose the details of such event.
Notwithstanding anything to the contrary set forth herein, the Issuer shall not, when so advising Subscriber of such events, provide Subscriber with any material, non-public information regarding the Issuer other than to the extent that providing notice to Subscriber of the occurrence of the events listed in (a) through (d) above constitutes material, non-public information regarding the Issuer;
4.2.3 use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement as soon as reasonably practicable;
4.2.4 upon the occurrence of any event contemplated in Section 4.2.2(d), except for such times as the Issuer is permitted hereunder to suspend, and has suspended, the use of a prospectus forming
14
4.4 Indemnity.
4.4.1 The Issuer shall indemnify and hold harmless Subscriber (to the extent a seller under the Registration Statement), its officers, directors, employees, members, managers, partners and agents, and each person who controls Subscriber (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), from and against any and all losses, claims, damages, liabilities, costs (including reasonable and documented attorneys’ fees) and expenses (collectively, “Losses”), that arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any prospectus included in the Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent that such untrue statements or alleged untrue statements, omissions or alleged omissions are based upon information regarding Subscriber furnished in writing to the Issuer by or on behalf of Subscriber expressly for use therein or Subscriber has omitted a material fact from such information.
4.4.2 Subscriber shall, severally and not jointly with any Other Subscriber, indemnify and hold harmless the Issuer, its directors, officers, agents and employees, and each person who controls the Issuer (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any prospectus included in the Registration Statement, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statements or omissions are based upon information regarding Subscriber furnished in writing to the Issuer by or on behalf of Subscriber expressly for use therein. In no event shall the liability of Subscriber be greater in amount than the dollar amount of the net proceeds received by Subscriber upon the sale of the Subscribed Shares giving rise to such indemnification obligation.
4.4.3 If the indemnification provided under this Section 4.4 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any Losses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses referred to above shall be deemed to include, subject to the limitations set forth in this Section 4.4, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 4.4 from any person who was not guilty of such fraudulent misrepresentation. Each indemnifying party’s obligation to make a contribution pursuant to this Section 4.4.3 shall be individual, not joint and several, and in no event shall the liability of any Subscriber hereunder be greater in amount than the dollar amount of the net proceeds received by such Subscriber upon the sale of the Subscribed Shares giving rise to such indemnification obligation.
16
4.4.4 Any party entitled to indemnification under this Section 4.4 shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any failure so to notify shall not relieve the indemnifying party of its obligations hereunder except to the extent that it is actually prejudiced thereby. The indemnifying party shall not enter into any settlement without the indemnified party’s prior written consent (not to be unreasonably withheld, conditioned or delayed), unless such settlement includes an unconditional release of the indemnified party from all liability arising out of such claim. The indemnified party shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the reasonable and documented fees and expenses of such counsel shall be at the expense of such indemnified party unless (x) the indemnifying party has agreed to pay such fees and expenses, (y) the indemnifying party has failed promptly to assume the defense of such action and employ counsel reasonably satisfactory to the indemnified party, or (z) the named parties to any such action include both the indemnifying party and the indemnified party, and the indemnified party has been advised by counsel that there may be one or more conflicting defenses available to it that would make it inappropriate for the same counsel to represent both parties.
5. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the Parties hereunder shall terminate without any further liability on the part of any Party in respect thereof, upon the earlier to occur of (i) such date and time as the Merger Agreement is validly terminated in accordance with its terms, (ii) upon the mutual written agreement of each of the Parties to terminate this Subscription Agreement and (iii) March 21, 2026; provided, that nothing herein will relieve any Party from liability for any willful breach hereof prior to the time of termination, and each Party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Issuer shall notify Subscriber of the termination of the Merger Agreement promptly after the termination of the Merger Agreement, and any monies paid by the Subscriber to the Issuer in connection herewith shall be promptly returned to the Subscriber within three (3) Business Days of such termination.
6. [Reserved].
- Miscellaneous.
7.1 Further Assurances. At the Subscription Closing, the Parties shall execute and deliver such additional documents and take such additional actions as the Parties reasonably may deem to be practical and necessary in order to consummate the Subscription as contemplated by this Subscription Agreement.
7.1.1 Subscriber acknowledges that the Issuer and the Placement Agents will rely on the acknowledgments, understandings, agreements, representations and warranties made by Subscriber contained in this Subscription Agreement. Prior to the Subscription Closing, Subscriber agrees to promptly notify the Issuer and the Placement Agents if any of the acknowledgments, understandings, agreements, representations and warranties set forth herein are no longer accurate in all material respects. The Issuer acknowledges that Subscriber will rely on the acknowledgments, understandings, agreements, representations and warranties made by the Issuer contained in this Subscription Agreement. Prior to the Subscription Closing, the Issuer agrees to promptly notify the Subscriber if any of the acknowledgments, understandings, agreements, representations and warranties set forth herein are no longer accurate in all material respects.
7.1.2 Each of the Issuer, Subscriber and the Placement Agents is entitled to rely upon this Subscription Agreement and is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
7.1.3 The Issuer may request from Subscriber such additional information as the Issuer may deem necessary to evaluate the eligibility of Subscriber to acquire the Shares, and Subscriber shall provide such information as may be reasonably requested, to the extent within Subscriber’s possession and control
17
or otherwise readily available to Subscriber; provided, that the Issuer agrees to keep any such information confidential except to the extent required to be disclosed by applicable Law or as required or requested by any Governmental Authority, including a tax authority.
7.1.4 Each of Subscriber and the Issuer shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated herein; provided that the Issuer shall bear and pay all expenses incurred in connection with the registration of the Shares pursuant to this Subscription Agreement, including, without limitation, (i) all registration and filing fees with the Commission, Nasdaq and any other Governmental Authority, (ii) the fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection therewith), (iii) printing, messenger and delivery expenses, (iv) the Issuer’s internal expenses, (v) the fees and disbursements of counsel for the Issuer, its independent certified public accountants, and any other persons retained by the Issuer in connection with such registration, and (vi) the reasonable fees and expenses of any transfer agent or registrar for the Common Stock, but excluding, for the avoidance of doubt, any underwriting discounts, selling commissions or stock transfer taxes applicable to the sale of the Shares by the Subscriber, or fees and expenses of counsel to the Subscriber.
7.1.5 Each of Subscriber and the Issuer shall take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated by this Subscription Agreement on the terms and conditions described therein no later than immediately prior to the consummation of the Transactions.
7.2 Notices. Any notice or communication required or permitted hereunder shall be in writing and either delivered personally, emailed or sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, and shall be deemed to be given and received (i) when so delivered personally, (ii) when sent, with no mail undeliverable or other rejection notice, if sent by email, or (iii) three Business Days after the date of mailing to the address below or to such other address or addresses as such person may hereafter designate by notice given hereunder:
(i) if to Subscriber, to such address or addresses set forth on the signature page hereto;
(ii) if to the Issuer, to:
Churchill Capital Corp. X
640 Fifth Avenue, 14th Floor
New York, NY 10019
Attention: Jay Taragin
Email: [***]
with a required copy (which copy shall not constitute notice) to:
Willkie Farr & Gallagher LLP
787 7th Avenue
New York, NY 10019
Attention: Greg Astrachan, Sean Ewen and Esther Chang
Email: [***]
ColdQuanta, Inc.
1315 W Century Dr #150
Louisville, CO 80027
Attention: Jim Stirbis
Email: [***]
Cooley LLP
55 Hudson Yards
New York, NY 10001-2157
Attention: Peter Byrne; Kristin VanderPas
Email: [***]
18
7.3 Entire Agreement. This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the Parties, with respect to the subject matter hereof, including any commitment letter entered into relating to the subject matter hereof.
7.4 Modifications and Amendments. This Subscription Agreement may not be amended, modified, supplemented or waived except by an instrument in writing, signed by the Party against whom enforcement of such amendment, modification, supplement or waiver is sought; provided, that any rights (but not obligations) of a Party under this Subscription Agreement may be waived, in whole or in part, by such Party on its own behalf without the prior consent of any other Party.
7.5 Assignment. Neither this Subscription Agreement nor any rights, interests or obligations that may accrue to the Parties hereunder (including Subscriber’s rights to purchase the Shares) may be transferred or assigned without the prior written consent of the other Parties hereto (other than the Shares acquired hereunder, if any, and then only in accordance with this Subscription Agreement); provided, that Subscriber’s rights and obligations hereunder may be assigned to any fund or account managed by the same investment manager as Subscriber, without the prior consent of the Issuer, provided, that such assignee(s) agrees in writing to be bound by the terms hereof, and upon such assignment by a Subscriber, the assignee(s) shall become Subscriber hereunder and have the rights and obligations and be deemed to make the representations and warranties of Subscriber provided for herein to the extent of such assignment; provided, further, that, no assignment shall relieve the assigning Party of any of its obligations hereunder, including any assignment to any fund or account managed by the same investment manager as Subscriber.
7.6 Benefit. Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the Parties and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns. This Subscription Agreement shall not confer rights or remedies upon any person other than the Parties and their respective successors and assigns, provided, however, each of the Parties hereby agrees that each Placement Agent is an intended third-party beneficiary of this Subscription Agreement, including the representations and warranties of the Parties.
7.7 Governing Law. This Subscription Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Subscription Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Subscription Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof.
7.8 Consent to Jurisdiction; Waiver of Jury Trial. Each of the Parties irrevocably consents to the exclusive jurisdiction and venue of the Court of Chancery of the State of Delaware, provided, that if subject matter jurisdiction over the matter that is the subject of the legal proceeding is vested exclusively in the U.S. federal courts, such legal proceeding shall be heard in the U.S. District Court for the District of Delaware (together with the Court of Chancery of the State of Delaware, “ChosenCourts”), in connection with any matter based upon or arising out of this Subscription Agreement. Each Party hereby waives, and shall not assert as a defense in any legal dispute, that (i) such person is not personally subject to the jurisdiction of the Chosen Courts for any reason, (ii) such legal proceeding may not be brought or is not maintainable in the Chosen Courts, (iii) such person’s property is exempt or immune from execution, (iv) such legal proceeding is brought in an inconvenient forum or (v) the venue of such legal proceeding is improper. Each Party hereby consents to service of process in any such proceeding in any manner permitted by Delaware law, further consents to service of process by nationally recognized overnight courier service guaranteeing overnight delivery, or by registered or certified mail, return receipt requested, at its address specified pursuant to Section 7.2, and each Party agrees that process may be served upon them in any manner authorized by the laws of the State of Delaware for such
19
persons and waives and covenants not to assert or plead any objection which they might otherwise have to such manner of service of process. Notwithstanding the foregoing in this Section 7.8, a Party may commence any action, claim, cause of action or suit in a court other than the Chosen Courts solely for the purpose of enforcing an order or judgment issued by the Chosen Courts. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS OR COUNTERCLAIMS ASSERTED IN ANY LEGAL DISPUTE RELATING TO THIS SUBSCRIPTION AGREEMENT WHETHER NOW EXISTING OR HEREAFTER ARISING. IF THE SUBJECT MATTER OF ANY SUCH LEGAL DISPUTE IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS PROHIBITED, NO PARTY SHALL ASSERT IN SUCH LEGAL DISPUTE A NONCOMPULSORY COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT. FURTHERMORE, NO PARTY SHALL SEEK TO CONSOLIDATE ANY SUCH LEGAL DISPUTE WITH A SEPARATE ACTION OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT BE WAIVED.
7.9 Severability. If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
7.10 No Waiver of Rights, Powers and Remedies. No failure or delay by a Party in exercising any right, power or remedy under this Subscription Agreement, and no course of dealing between the Parties, shall operate as a waiver of any such right, power or remedy of such Party. No single or partial exercise of any right, power or remedy under this Subscription Agreement by a Party, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such Party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a Party shall not constitute a waiver of the right of such Party to pursue other available remedies. No notice to or demand on a Party not expressly required under this Subscription Agreement shall entitle the Party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Party giving such notice or demand to any other or further action in any circumstances without such notice or demand.
7.11 Remedies.
7.11.1 The Parties agree that irreparable damage would occur if this Subscription Agreement was not performed or the Closing is not consummated in accordance with its specific terms or was otherwise breached and that money damages or other legal remedies would not be an adequate remedy for any such damage. It is accordingly agreed that the parties hereto shall be entitled to equitable relief, including in the form of an injunction or injunctions, to prevent breaches or threatened breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement in an appropriate Chosen Court, this being in addition to any other remedy to which any party is entitled at law or in equity, including money damages. The right to specific enforcement shall include the right of the Parties hereto to cause the other Parties hereto to cause the transactions contemplated hereby to be consummated on the terms and subject to the conditions and limitations set forth in this Subscription Agreement. The Parties hereto further agree (i) to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, (ii) not to assert that a remedy of specific enforcement pursuant to this Section 7.11 is unenforceable, invalid, contrary to applicable Law or inequitable for any reason and (iii) to waive any defenses in any action for specific performance, including the defense that a remedy at law would be adequate.
7.11.2 The Parties acknowledge and agree that this Section 7.11 is an integral part of the transactions contemplated hereby and without that right, the parties hereto would not have entered into this Subscription Agreement.
20
In any dispute arising out of or related to this Subscription Agreement, or any other agreement, document, instrument or certificate contemplated hereby, or any transactions contemplated hereby or thereby, the applicable adjudicating body shall award to the prevailing Party, if any, the costs and attorneys’ fees reasonably incurred by the prevailing Party in connection with the dispute and the enforcement of its rights under this Subscription Agreement or any other agreement, document, instrument or certificate contemplated hereby and, if the adjudicating body determines that the prevailing Party under circumstances where the prevailing Party won on some but not all of the claims and counterclaims, the adjudicating body may award the prevailing Party an appropriate percentage of the costs and attorneys’ fees reasonably incurred by the prevailing Party in connection with the adjudication and the enforcement of its rights under this Subscription Agreement or any other agreement, document, instrument or certificate contemplated hereby or thereby.
7.12 Survival of Representations and Warranties. All representations and warranties made by the Parties in this Subscription Agreement shall survive the Subscription Closing. For the avoidance of doubt, if for any reason the Subscription Closing does not occur prior to the Closing, all representations, warranties, covenants and agreements of the Parties hereunder shall survive the Closing and remain in full force and effect.
7.13 No Broker or Finder. Each of the Issuer and Subscriber represents and warrants to the other Parties hereto that, except for the Placement Agents, no broker, finder or other financial consultant has acted on its behalf in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability on any other party hereto. Each of the Issuer and Subscriber agrees to indemnify and hold the other Parties hereto harmless from any claim or demand for commission or other compensation by any broker, finder, financial consultant or similar agent other than the Placement Agents claiming to have been employed by or on behalf of such Party and to bear the cost of legal expenses incurred in defending against any such claim.
7.14 No Liability. Subscriber agrees that neither ColdQuanta nor the Placement Agents shall be liable to it (including in contract, tort, under federal or state securities laws or otherwise) for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the offering. On behalf of Subscriber and its affiliates, Subscriber releases ColdQuanta and the Placement Agents in respect of any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements related to the offering. Subscriber agrees not to commence any litigation or bring any claim against ColdQuanta or the Placement Agents in any court or any other forum which relates to, may arise out of, or is in connection with, the offering. This undertaking is given freely and after obtaining independent legal advice.
7.15 Headings and Captions. The headings and captions of the various subdivisions of this Subscription Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.
7.16 Counterparts. This Subscription Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered to the other Parties, it being understood that the Parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com or other transmission method), such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
7.17 Construction. The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Subscription Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Subscription Agreement as a whole and not to any particular subdivision
21
unless expressly so limited. The term “or” shall not be exclusive and shall mean “and/or”. Each of the Parties has participated in the drafting and negotiation of this Subscription Agreement. If any ambiguity or question of intent or interpretation arises, this Subscription Agreement must be construed as if it is drafted by all the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of authorship of any of the provisions of this Subscription Agreement. The Parties intend that each representation, warranty, and covenant contained herein will have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such Party has not breached will not detract from or mitigate the fact that such Party is in breach of the first representation, warranty, or covenant. All references in this Subscription Agreement to numbers of shares, per share amounts and purchase prices shall be appropriately adjusted to reflect any stock split, stock dividend, stock combination, recapitalization or the like occurring after the date hereof.
7.18 Mutual Drafting. This Subscription Agreement is the joint product of the Parties hereto and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the Parties and shall not be construed for or against any Party hereto.
8. Cleansing Statement; Disclosure.
8.1 The Issuer shall, by 9:00 a.m., New York City time, on the first Business Day immediately following the date of this Subscription Agreement, issue one or more press releases or file with the Commission a Current Report on Form 8-K (collectively, the “Disclosure Document”) disclosing all material terms of the transactions contemplated hereby and by the Other Subscription Agreements and the Transactions. Upon the issuance of the Disclosure Document, to the Issuer’s knowledge, Subscriber shall not be in possession of any material, non-public information received from the Issuer or any of its officers, directors or employees or the Placement Agents, and Subscriber shall no longer be subject to any confidentiality or similar obligations under any current agreement, whether written or oral, with the Issuer, the Placement Agents or any of their respective affiliates, relating to the transactions contemplated by this Subscription Agreement.
8.2 Without Subscriber’s prior written consent, Issuer shall not disclose the name of Subscriber or, or include the name of Subscriber or any of its affiliates or advisors in (i) any press release, marketing materials or any other public communication or (ii) in any filing with the Commission or any regulatory agency or trading market, except (x) as required by the federal securities laws or pursuant to other routine proceedings of regulatory authorities, (y) to the extent such disclosure is required by law, at the request of the Staff of the Commission or regulatory agency or under the regulations of any national securities exchange on which Issuer’s securities are listed for trading, in which case the Issuer shall provide Subscriber with prior written notice (including by e-mail) of such permitted disclosure, and shall reasonably consult with Subscriber regarding such disclosure, or (z) in the case of clause (ii), to the extent such announcements or other communications contain only information previously disclosed in a public statement, press release or other communication previously consented to in accordance with this Section 8. Subscriber will promptly provide any information reasonably requested by the Issuer or ColdQuanta for any regulatory application or filing made or approval sought in connection with the Transactions (including filings with the Commission).
- Trust Account Waiver. Notwithstanding anything to the contrary set forth herein, Subscriber acknowledges that the Issuer has established a trust account containing the proceeds of both its initial public offering and certain private placements (collectively, with interest accrued from time to time thereon, the “Trust Account”). Subscriber agrees that (i) it has no right, title, interest or claim of any kind in or to any monies held in the Trust Account, and (ii) it shall have no right of set-off or any right, title, interest or claim of any kind (“Claim”) to, or to any monies in, the Trust Account, in each case in connection with this Subscription Agreement, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it may have in connection with this Subscription Agreement; provided, however, that nothing in this Section 9 shall be deemed to limit Subscriber’s right, title, interest or claim to the Trust Account by virtue of such Subscriber’s
22
record or beneficial ownership of securities of the Issuer acquired by any means other than pursuant to this Subscription Agreement, including, but not limited to, any redemption right with respect to any such securities of the Issuer. In the event Subscriber has any Claim against the Issuer under this Subscription Agreement, Subscriber shall pursue such Claim solely against the Issuer and its assets outside the Trust Account and not against the property or any monies in the Trust Account. Subscriber agrees and acknowledges that such waiver is material to this Subscription Agreement and has been specifically relied upon by the Issuer to induce the Issuer to enter into this Subscription Agreement and Subscriber further intends and understands such waiver to be valid, binding and enforceable under applicable law. In the event Subscriber, in connection with this Subscription Agreement, commences any action or proceeding which seeks, in whole or in part, relief against the funds held in the Trust Account or distributions therefrom or any of the Issuer’s stockholders, whether in the form of monetary damages or injunctive relief, Subscriber, as applicable, shall be obligated to pay to the Issuer all of its legal fees and costs in connection with any such action in the event that the Issuer prevails in such action or proceeding.
[Reserved].
Non-Reliance. Subscriber acknowledges and represents that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, ColdQuanta, any of its affiliates or any of their respective control persons, officers, directors or employees), other than the representations and warranties of the Issuer expressly set forth in this Subscription Agreement, in making its investment or decision to invest in the Issuer. Subscriber agrees that neither (i) any Other Subscriber pursuant to this Subscription Agreement or any other agreement related to the offering of shares of the Shares (including the controlling persons, officers, directors, partners, agents or employees of any such Subscriber) nor (ii) ColdQuanta, its affiliates or any of their respective control persons, officers, directors, partners, agents or employees shall be liable to any Other Subscriber pursuant to this Subscription Agreement or any other agreement related to the offering of the Shares hereunder.
Rule 144. From and after such time as the benefits of Rule 144 promulgated under the Securities Act (“Rule 144”) or any other similar rule or regulation of the Commission that may allow Subscriber to resell Shares without registration are available to holders of the Issuer’s common stock and until the third anniversary of the Subscription Closing Date, the Issuer agrees to:
12.1 make and keep public information available, as those terms are understood and defined in Rule 144;
12.2 file with the Commission in a timely manner all reports and other documents required of the Issuer under the Securities Act and the Exchange Act so long as the Issuer remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and
12.3 furnish to Subscriber, promptly upon request, (x) a written statement by the Issuer, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (y) a copy of the most recent annual or quarterly report of the Issuer and such other reports and documents so filed by the Issuer, provided that the Issuer will be deemed to have furnished such statements to the extent such reports or documents are made available on the Commission’s Electronic Data Gathering, Analysis and Retrieval System, and (z) such other information as may be reasonably requested to permit Subscriber to sell such securities pursuant to Rule 144 without registration.
If the Shares are eligible to be sold without restriction under, and without the Issuer being in compliance with the current public information requirements of, Rule 144 under the Securities Act, or pursuant to any other exemption under the Securities Act such that the Shares held by Subscriber become freely tradable, then at Subscriber’s request, the Issuer will cause its transfer agent to remove the legend set forth in Section 2.1.6. In connection therewith, if required by the Issuer’s transfer agent, the Issuer will promptly cause an opinion of counsel to be delivered to and maintained with its transfer agent, together with any other authorizations,
23
certificates and directions required by the transfer agent that authorize and direct the transfer agent to issue such Shares without any such legend; provided, that, notwithstanding the foregoing, the Issuer will not be required to deliver any such opinion, authorization, certificate or direction if it reasonably believes that removal of the legend could result in or facilitate transfers of securities in violation of applicable federal or state securities laws. The Issuer shall be responsible for the fees of its transfer agent and its legal counsel associated with such delivery.
The Issuer hereby acknowledges and agrees that Subscriber shall have the right to transfer, assign or sell its Shares, in whole or in part, provided that such transfer, assignment or sale complies with applicable federal and state securities laws and regulations, and that the Issuer, upon Subscriber’s written request, and subject to receipt from the Subscriber of customary and reasonably acceptable representations and other documentation with respect to compliance with such federal and state securities laws and regulations, shall take all reasonable steps to effect any such transfer, assignment or sale, including causing the Issuer’s transfer agent to update the stock register to reflect such transaction.
- Offset Shares.
13.1 For purposes of this Subscription Agreement, “Offset Shares” means the aggregate of (i) the number of Class A ordinary shares that Subscriber beneficially owns as of the date of this Subscription Agreement and that Subscriber designates as “Offset Shares” (the “Currently Owned Offset Shares,” which number of Currently Owned Offset Shares is set forth on the signature page hereto) and (ii) the number of additional Class A ordinary shares (if any) which Subscriber purchases for its own account pursuant to transactions with third parties after the date hereof and prior to the record date (the “Record Date”) established for the special meeting of Issuer stockholders that will be held to approve the Transactions (the “Issuer Stockholder Meeting”) at a price less than the price per share for which each Class A ordinary share has the opportunity to be redeemed for cash in connection with the Issuer Stockholder Meeting (such shares purchased in such transactions, the “Additional OffsetShares”). For the avoidance of doubt, Subscriber may beneficially own Class A ordinary shares as of the date hereof that are not designated as “Currently Owned Offset Shares”.
13.2 Subscriber agrees (i) with respect to the Additional Offset Shares, (a) not to sell or otherwise transfer such Additional Offset Shares prior to the consummation of the Transactions, (b) that in order for Additional Offset Shares to be Offset Shares, Subscriber must not vote any Additional Offset Shares in favor of approving the Transactions and instead submit a proxy with respect to such Additional Offset Shares abstaining from voting thereon and (c) to the extent Subscriber has the right to have any of its Additional Offset Shares redeemed for cash pursuant to the organizational documents of Issuer (the “Issuer Organizational Documents”) in connection with the consummation of the Transactions, not to exercise any such redemption rights (collectively, the “Additional Offset Shares Reduction Conditions”), and (ii) with respect to the Currently Owned Offset Shares, (a) not to sell or otherwise transfer such Currently Owned Offset Shares prior to the consummation of the Transactions and (b) to the extent Subscriber has the right to have any of its Currently Owned Offset Shares redeemed for cash pursuant to the Issuer Organizational Documents in connection with the consummation of the Transactions, not to exercise any such redemption rights (the “Currently Owned OffsetShares Reduction Conditions”).
13.3 Subject to the prior written consent of each of the Parties, Subscriber may elect to increase the number of Nominal Shares or Currently Owned Offset Shares designated on Subscriber’s signature page hereto, with such increase deemed to be effective as of the date of this Subscription Agreement. Subscriber agrees that Subscriber’s representations and warranties in Section 2.1 with respect to such additional Nominal Shares or Currently Owned Shares will be as of the date of this Subscription Agreement, not as of the date of Subscriber’s election. For the avoidance of doubt, Subscriber may not elect to decrease the number of Nominal Shares or Currently Owned Offset Shares designated on the signature page hereto as of the date of this Subscription Agreement.
24
13.4 Subscriber shall, no later than one Business Day after the Record Date, deliver a certificate in the form attached hereto as Exhibit A (the “Certificate”) to Issuer, signed by Subscriber, certifying: (i) the number of Additional Offset Shares beneficially owned by Subscriber prior to the Record Date and Currently Owned Offset Shares beneficially owned by Subscriber as of the date of this Subscription Agreement, and (ii)(x) with respect to any such Additional Offset Shares, (1) the date(s) on which such Additional Offset Shares were acquired, (2) the price per share at which such Additional Offset Shares were purchased by Subscriber, and (3) an affirmation that Subscriber has and will comply with the Additional Offset Shares Reduction Conditions, and (y) with respect to any such Currently Owned Offset Shares, an affirmation that Subscriber has and will comply with the Currently Owned Offset Shares Reduction Conditions. Notwithstanding anything to the contrary in the foregoing, no later than three (3) Business Days prior to the Expected Subscription Closing Date as set forth in the Closing Notice, Subscriber shall reaffirm to the Issuer in writing that the certifications included in the Certificate are true and correct and that Subscriber will remain in compliance with the Additional Offset Shares Reduction Conditions and the Currently Owned Offset Shares Reduction Conditions.
[Signature Page Follows]
25
IN WITNESS WHEREOF, each of the Issuer and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date set forth below.
| CHURCHILL CAPITAL CORP X |
|---|
| By: |
| Name: |
| Title: |
26
| Accepted and agreed this ______ day of ________, 2025. | |
|---|---|
| SUBSCRIBER: | |
| Signature of Subscriber: | Signature of Joint Subscriber, if applicable: |
| By: | By: |
| Name: | Name: |
| Title: | Title: |
| Name of Subscriber: | Name of Joint Subscriber, if applicable: |
| (Please print. Please indicate name and | (Please Print. Please indicate name and |
| capacity of person signing above) | capacity of person signing above) |
| Name in which securities are to be registered | |
| (if different from the name of Subscriber listed directly above): | |
| Email Address: | |
| If there are joint investors, please check one: | |
| ☐ | |
| ☐ | |
| ☐ | |
| Subscriber’s EIN: | Joint Subscriber’s EIN: |
| Business Address-Street: | Mailing Address-Street (if different): |
| City, State, Zip: | City, State, Zip: |
| Attn: | Attn: |
| Telephone No.: | Telephone No.: |
| Facsimile No.: | Facsimile No.: |
| Aggregate Number of Shares subscribed for: | |
| Aggregate Purchase Price: ___________. |
All values are in US Dollars.
You must pay the Purchase Price by wire transfer of U.S. dollars in immediately available funds, to be held in escrow until the Closing, to the account specified by the Issuer in the Closing Notice.
SCHEDULE I
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER
| A. | QUALIFIED INSTITUTIONAL BUYER STATUS |
|---|---|
| (Please check the applicable subparagraphs): | |
| --- |
☐ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) (a “QIB”)).
☐ We are subscribing for the Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB.
*** OR ***
| B. | INSTITUTIONAL ACCREDITED INVESTOR STATUS |
|---|
(Please check the applicable subparagraphs):
☐ We are an institutional “accredited investor” (as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.”
*** AND ***
| C. | AFFILIATE STATUS |
|---|
(Please check the applicable box) SUBSCRIBER:
| ☐ | is: |
|---|---|
| ☐ | is not: |
| --- | --- |
an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
This page should be completed by Subscriber
and constitutes a part of the Subscription Agreement.
Rule 501(a) under the Securities Act, in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the Issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Subscriber has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”
☐ Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;
☐ Any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934, as amended;
☐ Any insurance company as defined in section 2(a)(13) of the Securities Act;
☐ Any investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”) or a business development company as defined in section 2(a)(48) of the Investment Company Act;
☐ Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958, as amended;
☐ Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
☐ Any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”;
☐ Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended;
☐ Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended, not formed for the specific purpose of acquiring the securities offered, and with total assets in excess of $5,000,000; or
☐ Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose subscription is directed by a sophisticated person as described in Section 230.506(b)(2)(ii) of Regulation D.
EXHIBIT A
CERTIFICATE
This certificate is provided pursuant to Section 13.4 of the Subscription Agreement, dated as of [•], 2025, by and between Churchill Capital Corp X, a Cayman Islands exempted company (“Issuer”) and the undersigned (“Subscriber”), (as the same may be amended, restated, amended and restated, supplemented or otherwise modified through the date hereof, the “Subscription Agreement”). Capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Subscription Agreement.
Subscriber hereby certifies as of the date hereof, each of the following:
| 1. | Subscriber beneficially owned [•] Additional Offset Shares as of the Record Date. | |
|---|---|---|
| 2. | Subscriber purchased the Additional Offset Shares prior to the Record Date and on the following dates and for<br>the following prices per share: | |
| --- | --- | |
| Date of Purchase | Number of Additional Offset Shares | Price Per Additional Offset Share |
| --- | --- | --- |
| 3. | With respect to the Additional Offset Shares, Subscriber acknowledges and agrees: | |
| --- | --- | |
| a. | not to sell or otherwise transfer any such Additional Offset Shares prior to the consummation of the<br>Transactions; | |
| --- | --- | |
| b. | that in order for Additional Offset Shares to be Offset Shares, Subscriber must not vote any such Additional<br>Offset Shares in favor of approving the Transactions and instead must submit a proxy with respect to such Additional Offset Shares abstaining from voting thereon; and | |
| --- | --- | |
| c. | to the extent it has the right to have any of its Additional Offset Shares redeemed for cash pursuant to the<br>Issuer Organizational Documents in connection with the consummation of the Transactions, not to exercise any such redemption rights. | |
| --- | --- | |
| 4. | With respect to the Currently Owned Offset Shares, Subscriber acknowledges and agrees: | |
| --- | --- | |
| a. | Subscriber beneficially owned [•] Currently Owned Offset Shares as of the date of the Subscription<br>Agreement; | |
| --- | --- | |
| b. | not to sell or otherwise transfer any such Currently Owned Offset Shares prior to the consummation of the<br>Transactions; and | |
| --- | --- | |
| c. | to the extent it has the right to have any of its Currently Owned Offset Shares redeemed for cash pursuant to<br>the Issuer Organizational Documents in connection with the consummation of the Transactions, not to exercise any such redemption rights. | |
| --- | --- | |
| SUBSCRIBER: | ||
| --- | ||
| Signature of Subscriber: | ||
| By: | ||
| Name: | ||
| Title: |
EX-10.8
Exhibit 10.8
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (as it may be amended, supplemented or restated from time to time in accordance with its terms, this “A&R Registration Rights Agreement”), dated as of September 8, 2025 is made and entered into by and among (i)CHURCHILL CAPITAL CORP X, a Delaware corporation (the “PubCo”), to be renamed Infleqtion, Inc. upon the Effective Date; (ii) each of the Persons identified on the signature pages hereto or on the signature pages to a joinder in the form attached to this A&R Registration Rights Agreement as Exhibit A under the heading “Company Shareholders” or “Insiders”; and (iii)CHURCHILL SPONSOR X LLC, a Delaware limited liability company (the “Sponsor”). Each of PubCo, the Company Shareholders, the Insiders and the Sponsor may be referred to herein as a “Party” and collectively as the “Parties.”
RECITALS
**WHEREAS,**simultaneously with the execution and delivery of this A&R Registration Rights Agreement, PubCo has entered into that certain Agreement and Plan of Merger and Reorganization, dated as of September 8, 2025 (as it may be amended, supplemented or restated from time to time in accordance with the terms of such agreement, the “Merger Agreement”), by and among PubCo,, AH Merger Sub I, Inc., a Delaware corporation (“Merger Sub I”), AH Merger Sub II, LLC, a Delaware limited liability company (“Merger Sub II”), and ColdQuanta, Inc., a Delaware corporation (the “Company”), in connection with the business combination set forth in the Merger Agreement;
WHEREAS, on or prior to the Effective Date and subject to the conditions of the Merger Agreement, PubCo will transfer 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, pursuant to the Merger Agreement, (a) Merger Sub I will merge with and into the Company, with the Company continuing as the surviving corporation (the “Surviving Corporation”) (the “First Merger”), and (b) immediately following the First Merger, the Surviving Corporation will merge with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Second Merger” and, together with the First Merger, the “Mergers”);
WHEREAS, pursuant to the Merger Agreement, holders of Company equity securities, will receive shares of Common Stock (as defined herein) or rights to acquire Common Stock;
WHEREAS, PubCo, Sponsor and certain other PubCo stockholders (the “Existing Holders”) are party to that certain Registration Rights Agreement, dated as of May 13, 2025 (the “Original RRA”);
WHEREAS, pursuant to Section 5.5 of the Original RRA, any of the terms of the Original RRA may be amended with the written consent of PubCo and Existing Holders holding a majority in interest of the Registrable Securities (as defined herein) (the “Requisite Holders”);
WHEREAS, in connection with the execution of this A&R Registration Rights Agreement, PubCo and the Requisite Holders desire to amend and restate the Original RRA and as set forth in this A&R Registration Rights Agreement; and
WHEREAS, the Parties desire to set forth their agreement with respect to registration rights and certain other matters, in each case in accordance with the terms and conditions of this A&R Registration Rights Agreement.
NOW, THEREFORE, in consideration of the representations, mutual covenants and agreements contained in this A&R Registration Rights Agreement, and 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
Section 1.1. Definitions. As used in this A&R Registration Rights Agreement, the following terms shall have the following meanings:
“Action” means any action, suit, charge, litigation, arbitration, or other proceeding at law or in equity (whether civil, criminal or administrative) by or before any Governmental Entity.
“Adverse Disclosure” means any public disclosure of material non-public information, which disclosure, in the good faith determination of the Board, after consultation with counsel to PubCo, (a) 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 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, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) PubCo has a bona fide business purpose for not making such public disclosure.
“Affiliate” of any particular Person means any other Person controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, its capacity as a sole or managing member or otherwise; provided, that no Party shall be deemed an Affiliate of PubCo or any of its subsidiaries for purposes of this A&R Registration Rights Agreement.
“Automatic Shelf Registration Statement” has the meaning set forth in Rule 405 promulgated by the SEC pursuant to the Securities Act.
“Beneficially Own” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.
“Board” means the board of directors of PubCo.
“Business Day” means any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in the State of New York.
“Closing” has the meaning given to such term in the Merger Agreement.
“Closing Date” has the meaning given to such term in the Merger Agreement.
“Closing Date Lock-Up Shares” means the Equity Securities of PubCo held by the Holders as of the Closing Date, including Common Stock, Common Stock subject to vesting and forfeiture and Common Stock issuable upon exercise of any warrants, options or other rights.
“Common Stock” means shares of the common stock, par value $0.0001 per share, of PubCo, including (i) any shares of such common stock issuable upon the exercise of any warrant or other right to acquire shares of such common stock and (ii) any Equity Securities of PubCo that may be issued or distributed or be issuable with respect to such common stock by way of conversion, dividend, stock split or other distribution, merger, consolidation, exchange, recapitalization or reclassification or similar transaction.
-2-
“Company” has the meaning set forth in the Recitals.
“Company Shareholders” means each undersigned party not identified as an “Insider” or “Sponsor” on the signature pages or Joinders attached hereto.
“Demand Delay” has the meaning set forth in Section 2.2(a)(ii).
“Demand Initiating Holders” has the meaning set forth in Section 2.2(a).
“Demand Registration” has the meaning set forth in Section 2.2(a).
“Effective Date” has the meaning set forth in Section 1.3.
“Effectiveness Period” has the meaning set forth in Section 2.5(a).
“Eligible Demand Participation Holders” means any Holder or group of Holders, that together elects to dispose of Registrable Securities having an aggregate value of at least $50,000,000, at the time of the demand for registration, solely with respect to Registrable Securities that have been released from the Lock-Up restrictions of Section 3.1.
“Eligible Take-Down Holders” means each Holder, solely with respect to Registrable Securities that have been released from the Lock-Up restrictions of Section 3.1.
“Equity Securities” means, with respect to any Person, all of the shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock or equity of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares or equity (or such other interests), restricted stock awards, restricted stock units, equity appreciation rights, phantom equity rights, profit participation and all of the other ownership or profit interests of such Person (including partnership or member interests therein), whether voting or nonvoting.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto, as the same shall be in effect from time to time.
“Family Member” means with respect to any individual, a spouse, lineal descendant (whether natural or adopted) or spouse of a lineal descendant of such individual or any trust created for the benefit of such individual or of which any of the foregoing is a beneficiary.
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“Governmental Entity” means any nation or government, any state, province or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any court, arbitrator (public or private) or other body or administrative, regulatory or quasi-judicial authority, agency, department, board, commission or instrumentality of any federal, state, local or foreign jurisdiction.
-3-
“Holder” means any holder of Registrable Securities who is a Party to, or who succeeds to rights under, this A&R Registration Rights Agreement pursuant to Section 4.1.
“Insiders” means each undersigned party identified as an “Insider” on the signature pages attached hereto.
“Laws” means all laws, acts, statutes, constitutions, treaties, ordinances, codes, rules, regulations, and rulings of a Governmental Entity, including common law. All references to “Laws” shall be deemed to include any amendments thereto, and any successor Law, unless the context otherwise requires.
“Lock-UpPeriod” means the period beginning on the Closing Date and ending on the date that is one hundred eighty (180) days thereafter.
“Lock-Up Shares” means the Closing Date Lock-Up Shares.
“Marketed” means an Underwritten Shelf Take-Down or other Underwritten Offering, as applicable, that involves the use or involvement of a customary “road show” (including an “electronic road show”) or other substantial marketing effort by Underwriters over a period of at least 48 hours.
“Merger Agreement” has the meaning set forth in the Recitals.
“Merger Sub I” has the meaning set forth in the Recitals.
“Merger Sub II” has the meaning set forth in the Recitals.
“Merger Subs” has the meaning set forth in the Recitals.
“Mergers” has the meaning set forth in the Recitals.
“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 light of the circumstances under which they were made, not misleading.
“Non-Marketed” means an Underwritten Shelf Take-Down that is not a Marketed Underwritten Shelf Take-Down.
“Non-Marketed Underwritten Shelf Take-Down SellingHolders” has the meaning set forth in Section 2.1(d)(iv)(B).
“Original RRA” has the meaning set forth in the Recitals.
“Party” has the meaning set forth in the Preamble.
“Permitted Transferee” shall mean any person or entity to whom a Holder of Registrable Securities is permitted to Transfer such Registrable Securities prior to the expiration of the Lock-up Period under this A&R Registration Rights Agreement pursuant to Section 3.1(b)(i)-(xiii) hereof and under any other applicable agreement between such Holder and PubCo, and to any Transferee thereafter.
“Person” means any natural person, sole proprietorship, partnership, trust, unincorporated association, corporation, limited liability company, entity or Governmental Entity.
-4-
“PIPE Subscription Agreements” has the meaning given to such term in the Merger Agreement.
“Prospectus” means the prospectus included in any Registration Statement, all amendments (including post-effective amendments) and supplements to such prospectus, and all material incorporated by reference in such prospectus.
“PubCo” has the meaning set forth in the Preamble.
“Registrable Securities” means (i) any shares of Common Stock and (ii) any Equity Securities of PubCo that may be issued or distributed or be issuable with respect to the securities referred to in clause (i) by way of conversion, dividend, stock split or other distribution, merger, consolidation, exchange, recapitalization or reclassification or similar transaction, in each case Beneficially Owned by a Holder as of immediately following the Closing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect to the sale of such Registrable Securities has become effective under the Securities Act and such Registrable Securities have been sold, Transferred, disposed of or exchanged in accordance with the plan of distribution set forth in such Registration Statement; (b) such Registrable Securities shall have ceased to be outstanding; (c) such Registrable Securities have been sold to, or through, a broker, dealer or Underwriter in a public distribution or other public securities transaction; (d) such Registrable Securities shall have been otherwise Transferred by a Holder, a new certificate or book-entry for such security not bearing a legend restricting further Transfer shall have been delivered by PubCo and subsequent public distribution of such security shall not require registration under the Securities Act; or (E) such Registrable Securities are eligible for resale without registration pursuant to Rule 144 under the Securities Act (or any successor rule promulgated thereafter by the SEC) without volume or manner-of-sale restrictions and without the requirement for PubCo to be in compliance with the current public information required by Rule 144(i)(2) under the Securities Act.
“Registration” means a registration, including any related Shelf Take-Down, effected by preparing and filing a registration statement, prospectus or similar document in compliance with the requirements of the Securities Act, and such registration statement becoming effective.
“Registration Expenses” means the out-of-pocket expenses of a Registration or other Transfer pursuant to the terms of this A&R Registration Rights Agreement, including (a) all SEC, stock exchange and FINRA registration and filing fees (including, if applicable, the fees and expenses of any “qualified independent underwriter,” as such term is defined in Rule 5121 of FINRA (or any successor provision), and of its counsel), (b) all fees and expenses of complying with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of the Registrable Securities), (c) all printing, messenger and delivery expenses, (d) the reasonable fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange and all rating agency fees, (e) the reasonable fees and disbursements of counsel for PubCo and of its independent public accountants, including the expenses of any special audits and/or comfort letters required by or incident to such performance and compliance, (f) the reasonable and documented fees and out-of-pocket expenses of one counsel for all of the Holders participating in an Underwritten Offering, selected by such Holders that own a majority of the Registrable Securities participating in such Registration or other Transfer; provided, however, that such reimbursable fees and expenses of counsel shall not exceed $50,000, per Registration and (g) any other reasonable and documented fees and distributions customarily paid by the issuers of securities.
“Registration Statement” means any registration statement that covers the Registrable Securities pursuant to the provisions of this A&R Registration Rights Agreement, 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.
-5-
“Representatives” means, with respect to any Person, any of such Person’s officers, directors, employees, agents, attorneys, accountants, actuaries, consultants, equity financing partners or financial advisors or other Person acting on behalf of such Person.
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and any successor thereto, as the same shall be in effect from time to time.
“Shelf Holder” means any Holder that owns Registrable Securities that have been registered on a Shelf Registration Statement.
“Shelf Registration” means a registration of securities pursuant to a Registration Statement filed with the SEC in accordance with and pursuant to Rule 415 promulgated under the Securities Act.
“ShelfRegistration Statement” means a Registration Statement of PubCo filed with the SEC on either (a) Form S-3 (or any successor form or other appropriate form under the Securities Act) or (b) if PubCo is not permitted to file a Registration Statement on Form S-3, a Registration Statement on Form S-1 (or any successor form or other appropriate form under the Securities Act), in each case for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act covering the Registrable Securities, as applicable.
“Shelf Suspension” has the meaning set forth in Section 2.1(c).
“Shelf Take-Down” means any offering or sale of Registrable Securities initiated by a Shelf Take-Down Initiating Holder pursuant to a Shelf Registration Statement.
“Shelf Take-Down Initiating Holders” has the meaning set forth in Section 2.1(d).
“Sponsor” has the meaning set forth in the Preamble.
“Sponsor Agreement” means that certain Amended and Restated Letter Agreement, dated as of September 8, 2025, by and among the Sponsor and PubCo, as amended, restated, modified or supplemented from time to time.
“Subsequent ShelfRegistration” has the meaning set forth in Section 2.1(b).
“Take-Down Participation Notice” has the meaning set forth in Section 2.1(d)(iv)(C).
“Take-Down Tagging Holder” has the meaning set forth in Section 2.1(d)(iv)(B).
“Trading Day” means a day on which the principal United States securities exchange on which the Common Stock is listed, quoted or admitted to trading and is open for the transaction of business (unless such trading shall have been suspended for the entire day).
“Transfer” means to (A) exchange, transfer, assign, lend, sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, or
-6-
any right or interest therein, (B) enter 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 (C) publicly announce any intention to effect any transaction specified in clause (A) or (B). The terms “Transferee,” “Transferor,” “Transferred,” and other forms of the word “Transfer” shall have the correlative meanings.
“Triggering Event” means the VWAP of the Common Stock is at any time greater than or equal to $12.00 over any fifteen (15) Trading Days within any one hundred eighty (180) Trading Day period (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to PubCo’s Common Stock).
“Underwriter” means any investment banker(s) and manager(s) appointed to administer the offering of any Registrable Securities as principal in an Underwritten Offering.
“Underwritten Offering” means a Registration in which securities of PubCo are sold to an Underwriter for distribution to the public.
“Underwritten Shelf Take-Down” has the meaning set forth in Section 2.1(d)(ii)(A).
“Underwritten Shelf Take-Down Notice” has the meaning set forth in Section 2.1(d)(ii)(A).
“VWAP” for any security as of any trading day means the dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded during such trading day beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average). If the foregoing does not apply, “VWAP” shall mean the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during such trading day beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg. If no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, “VWAP” shall mean the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by OTC Markets Group Inc for such trading day. If the VWAP cannot be calculated for such security on such date(s) on any of the foregoing bases, the VWAP of such security on such shall be the fair market value per share on such day as reasonably determined by the Board of Directors (including for the avoidance of doubt a duly authorized committee thereof).
“Well-Known Seasoned Issuer” has the meaning set forth in Rule 405 promulgated by the SEC pursuant to the Securities Act.
Section 1.2. Interpretive Provisions. For all purposes of this A&R Registration Rights Agreement, except as otherwise provided in this A&R Registration Rights Agreement or unless the context otherwise requires:
(a) the meanings of defined terms are applicable to the singular as well as the plural forms of such terms;
(b) the words “hereof”, “herein”, “hereunder” and words of similar import, when used in this A&R Registration Rights Agreement, refer to this A&R Registration Rights Agreement as a whole and not to any particular provision of this A&R Registration Rights Agreement;
-7-
(c) references in this A&R Registration Rights Agreement to any Law shall be deemed also to refer to such Law, and all rules and regulations promulgated thereunder;
(d) whenever the words “include”, “includes” or “including” are used in this A&R Registration Rights Agreement, they shall mean “without limitation;”
(e) the captions and headings of this A&R Registration Rights Agreement are for convenience of reference only and shall not affect the interpretation of this A&R Registration Rights Agreement; and
(f) pronouns of any gender or neuter shall include, as appropriate, the other pronoun forms.
Section 1.3. Effectiveness. This A&R Registration Rights Agreement shall become effective upon the Closing (as such term is defined in the Merger Agreement) (the “Effective Date”) and shall be of no further force or effect upon any termination of the Merger Agreement (without liability to either party).
ARTICLE 2
REGISTRATION RIGHTS
Section 2.1. Shelf Registration.
(a) Filing. PubCo shall use commercially reasonable efforts to file within thirty (30) business days following the Closing Date a Shelf Registration Statement covering the resale of all Registrable Securities (except as determined by PubCo pursuant to Section 2.7 as of two Business Days prior to such filing) on a delayed or continuous basis. PubCo shall use its commercially reasonable efforts to cause such Shelf Registration Statement to become effective under the Securities Act as soon as reasonably practicable after such filing, but in no event later than the 105th calendar day (or 165th calendar day if the SEC notifies PubCo that it will “review” the Shelf Registration Statement) after the Closing Date. PubCo shall maintain such Shelf Registration Statement in accordance with the terms of this A&R Registration Rights Agreement, and shall prepare and file with the SEC such amendments, including post-effective amendments, and supplements as may be necessary to keep such Shelf Registration Statement continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as of which all Registrable Securities registered by such Shelf Registration Statement have been sold or cease to be Registrable Securities. In the event PubCo files a Shelf Registration Statement on Form S-1, PubCo shall use its commercially reasonable efforts to convert such Shelf Registration Statement (and any Subsequent Shelf Registration) to a Shelf Registration Statement on Form S-3 as soon as reasonably practicable after PubCo is eligible to use Form S-3. PubCo shall also use its commercially reasonable efforts to file any replacement or additional Shelf Registration Statement and use commercially reasonable efforts to cause such replacement or additional Shelf Registration Statement to become effective prior to the expiration of the initial Shelf Registration Statement filed pursuant to this Section 2.1(a).
(b) Subsequent Shelf Registration. If any Shelf Registration Statement ceases to be effective under the Securities Act for any reason at any time while there remain any Registrable Securities registered by such Shelf Registration Statement, PubCo shall use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Shelf Registration Statement to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf Registration Statement), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable amend such Shelf Registration Statement in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf Registration Statement or file an additional Registration Statement as a Shelf Registration (a “Subsequent Shelf
-8-
Registration”) registering the resale of all outstanding Registrable Securities registered by such prior Shelf Registration Statement. If a Subsequent Shelf Registration is filed, PubCo shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration shall be an Automatic Shelf Registration Statement if PubCo is a Well-Known Seasoned Issuer) and (ii) keep such Subsequent Shelf Registration continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as of which all Registrable Securities registered by such Subsequent Shelf Registration have been sold or cease to be Registrable Securities.
(c) Suspension of Filing or Registration. Upon receipt of written notice from the Company that a Shelf Registration Statement or Prospectus contains or includes a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until they have received copies of a supplemented or amended Registration Statement or Prospectus correcting the Misstatement (it being understood that PubCo hereby covenants to prepare and file such supplement or amendment as soon as reasonably practicable after the time of such notice), or until they are advised in writing by PubCo that the use of the Registration Statement or Prospectus may be resumed. PubCo shall be entitled to delay or postpone the filing or effectiveness of a Shelf Registration Statement, and from time to time to require the Holders not to sell under a Registration Statement or to suspend the effectiveness thereof, if the filing, effectiveness or continued use of a Shelf Registration Statement at any time would require PubCo to make an Adverse Disclosure or would require the inclusion in such Shelf Registration Statement of financial statements that are unavailable to PubCo for reasons beyond PubCo’s control; provided, however, that PubCo shall have a period of not more than ninety (90) days within which to delay the filing or effectiveness (but not the preparation) of such Shelf Registration Statement or, in the case of a Shelf Registration Statement that has been declared effective, to suspend the use by Holders of such Shelf Registration Statement (in each case, a “ShelfSuspension”); provided, however, that PubCo shall not be permitted to exercise in any twelve (12) month period (i) more than two (2) Shelf Suspensions pursuant to this Section 2.1(c) and Demand Delays pursuant to Section 2.2(a)(ii) in the aggregate, unless consented to in writing by Holders holding a majority of the Registrable Securities or (ii) aggregate Shelf Suspensions pursuant to this Section 2.1(c) and Demand Delays pursuant to Section 2.2(a)(ii) of more than one hundred fifty (150) days. Each Holder shall keep confidential the fact that a Shelf Suspension is in effect and the contents of any notice by PubCo of a Shelf Suspension for the permitted duration of the Shelf Suspension or until otherwise notified by PubCo, except (A) for disclosure to such Holder’s employees, agents and professional advisers who need to know such information and are obligated to keep it confidential, (B) for disclosures to the extent required in order to comply with reporting obligations to its limited partners who have agreed to keep such information confidential or (C) as required by law or subpoena. In the case of a Shelf Suspension that occurs after the effectiveness of the applicable Shelf Registration Statement, the Holders agree to suspend use of the applicable Prospectus for the permitted duration of such Shelf Suspension in connection with any sale or purchase of, or offer to sell or purchase, Registrable Securities, upon receipt of written notice by PubCo. PubCo shall immediately notify the Holders or Shelf Holders, as applicable, upon the termination of any Shelf Suspension, and (i) in the case of a Shelf Registration Statement that has not been declared effective, shall promptly thereafter file the Shelf Registration Statement and use its commercially reasonable efforts to have such Shelf Registration Statement declared effective under the Securities Act and (ii) in the case of an effective Shelf Registration Statement, shall amend or supplement the Prospectus, if necessary, so it does not contain any Misstatement prior to the expiration of the Shelf Suspension and furnish to the Shelf Holders such numbers of copies of the Prospectus as so amended or supplemented as the Shelf Holders may reasonably request. PubCo agrees, if necessary, to supplement or make amendments to the Shelf Registration Statement if required by the registration form used by PubCo for the Registration or by the instructions applicable to such registration form or by the Securities Act or the rules or regulations promulgated thereunder or as may reasonably be requested by the Shelf Holders Beneficially Owning a majority of the Registrable Securities then outstanding.
-9-
(d)Shelf Take-Downs.
(i) Generally. Subject to the terms and provisions of this Article 2 (including Section 2.2(d)), an Eligible Take-Down Holder may initiate a Shelf Take-Down (the then Eligible Take-Down Holder, the “Shelf Take-Down Initiating Holder”) that, at the option of such Shelf Take-Down Initiating Holder (A) is in the form of an Underwritten Shelf Take-Down or a Shelf Take-Down that is not an Underwritten Shelf Take-Down and (B) in the case of an Underwritten Shelf Take-Down, is Non-Marketed or Marketed, in each case, as shall be specified in the written demand delivered by the Shelf Take-Down Initiating Holder to PubCo pursuant to the provisions of this Section 2.1(d). For the avoidance of doubt, an Eligible Take-Down Holder that is not a Shelf Take-Down Initiating Holder cannot initiate a Shelf Take-Down.
(ii) Underwritten Shelf Take-Downs.
(A) A Shelf Take-Down Initiating Holder may elect in a written demand delivered to PubCo (an “Underwritten Shelf Take-DownNotice”) for any Shelf Take-Down that it has initiated to be in the form of an Underwritten Offering (an “Underwritten Shelf Take-Down”), and PubCo shall, if so requested, file and effect an amendment or supplement of the Shelf Registration Statement for such purpose as soon as practicable; provided, that any such Underwritten Shelf Take-Down must comply with Section 2.2(d) and involve the offer and sale of Registrable Securities having a reasonably anticipated net aggregate offering price (after deduction of Underwriter commissions) of at least (I) in the case of any Marketed Underwritten Shelf Take-Down, $50,000,000 and (II) in the case of any Non-Marketed Underwritten Shelf Take-Down, $30,000,000 unless such Non-Marketed Underwritten Shelf Take-Down is for all of the Registrable Securities then held by the applicable Shelf Take-Down Initiating Holder (in which case there is no minimum other than the inclusion of all of such Registrable Securities). PubCo shall have the right to select the Underwriter or Underwriters to administer such Underwritten Shelf Take-Down; provided, that such Underwriter or Underwriters shall be reasonably acceptable to the Shelf Holders that own a majority of the Registrable Securities to be offered for sale in such Underwritten Shelf Take-Down subject to the limitations of this Section 2.1(d)(ii)(B).
(B) With respect to any Underwritten Shelf Take-Down (including any Marketed Underwritten Shelf Take-Down), in the event that a Shelf Holder otherwise would be entitled to participate in such Underwritten Shelf Take-Down pursuant to this Section 2.1(d)(ii), Section 2.1(d)(iii) or Section 2.1(d)(iv), as the case may be, the right of such Shelf Holder to participate in such Underwritten Shelf Take-Down shall be conditioned upon such Shelf Holder’s participation in such underwriting and the inclusion of such Shelf Holder’s Registrable Securities in the Underwritten Offering to the extent provided herein. PubCo, together with all Shelf Holders proposing to distribute their securities through such Underwritten Shelf Take-Down, shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected in accordance with Section 2.1(d)(ii)(A). Notwithstanding any other provision of this Section 2.1, if the Underwriter shall advise PubCo that marketing factors (including an adverse effect on the per security offering price) require a limitation of the number of Registrable Securities to be underwritten in an Underwritten Shelf Take-Down, then PubCo shall so advise all Shelf Holders that have requested to participate in such Underwritten Shelf Take-Down, and the number of Registrable Securities that may be included in such Underwritten Shelf Take-Down shall be allocated pro rata among such Shelf Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by such Shelf Holders at the time of such Underwritten Shelf Take-Down; provided, that any Registrable Securities thereby allocated to a Shelf Holder that exceeds such Shelf Holder’s request shall be reallocated among the remaining Shelf Holders in like manner; and provided, further, that the number of Registrable Securities to be included in such Underwritten Shelf Take-Down shall not be reduced unless all other Equity Securities of PubCo are first entirely excluded from any contemporaneous Underwritten Offering. No Registrable Securities excluded from an Underwritten Shelf Take-Down by reason of the
-10-
Underwriter’s marketing limitation shall be included in such Underwritten Offering. For the avoidance of doubt, PubCo may include securities for its own account (or for the account of any other Persons) in such Underwritten Shelf Take-Down subject to the limitations of this Section 2.2.
(iii) Marketed Underwritten Shelf Take-Downs. The Shelf Take-Down Initiating Holder submitting an Underwritten Shelf Take-Down Notice shall indicate in such notice that it delivers to PubCo pursuant to Section 2.1(d)(ii) whether it intends for such Underwritten Shelf Take-Down to be Marketed (a “Marketed Underwritten Shelf Take-Down”). Upon receipt of an Underwritten Shelf Take-Down Notice indicating that such Underwritten Shelf Take-Down will be a Marketed Underwritten Shelf Take-Down, PubCo shall promptly (but in any event no later than ten (10) days prior to the expected date of such Marketed Underwritten Shelf Take-Down) give written notice of such Marketed Underwritten Shelf Take-Down to all other Eligible Take-Down Holders of Registrable Securities under such Shelf Registration Statement and any such Eligible Take-Down Holders requesting inclusion in such Marketed Underwritten Shelf Take-Down must respond in writing within five (5) days after the receipt of such notice. Each such Eligible Take-Down Holder that timely delivers any such request shall be permitted to sell in such Marketed Underwritten Shelf Take-Down subject to the terms and conditions of Section 2.1(d)(ii).
(iv) Non-Marketed Underwritten Shelf Take-Downs and Non-Underwritten Shelf Take-Downs.
(A) Any Shelf Take-Down Initiating Holder may initiate (x) an Underwritten Shelf Take-Down that is Non-Marketed (a “Non-Marketed Underwritten Shelf Take-Down”) or (y) a Shelf Take-Down that is not an Underwritten Shelf Take-Down (a “Non-Underwritten Shelf Take-Down”) by providing written notice thereof to PubCo and, to the extent required by Section 2.1(d)(iv)(B), PubCo shall provide written notice thereof to all other Eligible Take-Down Holders.
(B) With respect to each Non-Marketed Underwritten Shelf Take-Down, the Shelf Take-Down Initiating Holder initiating such Non-Marketed Underwritten Shelf Take-Down shall provide written notice (a “Non-Marketed Underwritten ShelfTake-Down Notice”) of such Non-Marketed Underwritten Shelf Take-Down to PubCo and PubCo shall provide written notice thereof to all other Eligible Take-Down Holders at least forty-eight (48) hours prior to the expected time of the pricing of the applicable Non-Marketed Underwritten Shelf Take-Down, which Non-Marketed Underwritten Shelf Take-Down Notice shall set forth (I) the total number of Registrable Securities expected to be offered and sold in such Non-Marketed Underwritten Shelf Take-Down, (II) the expected timing and plan of distribution of such Non-Marketed Underwritten Shelf Take-Down, (III) an invitation to each Eligible Take-Down Holder to elect (such Eligible Take-Down Holders who make such an election being “Take-Down Tagging Holders” and, together with the Shelf Take-Down Initiating Holders and all other Persons (other than any Affiliates of the Shelf Take-Down Initiating Holders) who otherwise are Transferring, or have exercised a contractual or other right to Transfer, Registrable Securities in connection with such Non-Marketed Underwritten Shelf Take-Down, the “Non-Marketed UnderwrittenShelf Take-Down Selling Holders”) to include in the Non-Marketed Underwritten Shelf Take-Down Registrable Securities held by such Take-Down Tagging Holder (but subject to Section 2.1(d)(ii)(B)) and (IV) the action or actions required (including the timing thereof) in connection with such Non-Marketed Underwritten Shelf Take-Down with respect to each Eligible Take-Down Holder that elects to exercise such right (including the delivery of one or more stock certificates representing Registrable Securities of such Eligible Take-Down Holder to be sold in such Non-Marketed Underwritten Shelf Take-Down).
(C) Upon delivery of a Non-Marketed Underwritten Shelf Take-Down Notice, each Eligible Take-Down Holder may elect to sell Registrable Securities in such Non-Marketed Underwritten Shelf Take-Down, at the same price per Registrable Security and pursuant to the same terms and conditions with respect to payment for the Registrable Securities as agreed to by the Shelf
-11-
Take-Down Initiating Holders, by sending an irrevocable written notice (a “Take-Down Participation Notice”) to PubCo within the time period specified in such Non-Marketed Underwritten Shelf Take-Down Notice (which time period shall be at least twenty-four (24) hours prior to the expected time of the pricing of the applicable Non-Marketed Underwritten Shelf Take-Down), indicating their election to sell up to the number of Registrable Securities in the Non-Marketed Underwritten Shelf Take-Down specified by such Eligible Take-Down Holder in such Take-Down Participation Notice (but, in all cases, subject to Section 2.1(d)(ii)(B)). Following the time period specified in such Non-Marketed Underwritten Shelf Take-Down Notice, each Take-Down Tagging Holder that has delivered a Take-Down Participation Notice shall be permitted to sell in such Non-Marketed Underwritten Shelf Take-Down on the terms and conditions set forth in the Non-Marketed Underwritten Shelf Take-Down Notice, concurrently with the Shelf Take-Down Initiating Holders and the other Non-Marketed Underwritten Shelf Take-Down Selling Holders, the number of Registrable Securities calculated pursuant to Section 2.1(d)(ii)(B). It is understood that in order to be entitled to exercise their right to sell Registrable Securities in a Non-Marketed Underwritten Shelf Take-Down pursuant to this Section 2.1(d)(iv), each Take-Down Tagging Holder must agree to make the same representations, warranties, covenants, indemnities and agreements, if any, as the Shelf Take-Down Initiating Holders agree to make in connection with the Non-Marketed Underwritten Shelf Take-Down, with such additions or changes as are required of such Take-Down Tagging Holder by the Underwriters (if applicable).
(D) Notwithstanding the delivery of any Non-Marketed Underwritten Shelf Take-Down Notice, all determinations as to whether to complete any Non-Marketed Underwritten Shelf Take-Down and as to the timing, manner, price and other terms and conditions of any Non-Marketed Underwritten Shelf Take-Down shall be at the sole discretion of the applicable Shelf Take-Down Initiating Holder, and PubCo agrees to cooperate in facilitating any Non-Marketed Underwritten Shelf Take-Down pursuant to this Section 2.1(d). Each of the Eligible Take-Down Holders agrees to reasonably cooperate with each of the other Eligible Take-Down Holders and PubCo to establish notice, delivery and documentation procedures and measures to facilitate such other Eligible Take-Down Holders’ participation in Non-Marketed Underwritten Shelf Take-Downs pursuant to this Section 2.1(d).
(E) With respect to each Non-Underwritten Shelf Take-Down, the Shelf Take-Down Initiating Holder initiating such Non-Underwritten Shelf Take-Down shall provide written notice of such Non-Underwritten Shelf Take-Down to PubCo at least forty-eight (48) hours prior to the expected time of such Non-Underwritten Shelf Take-Down, which shall set forth (I) the total number of Registrable Securities expected to be offered and sold in such Non-Underwritten Shelf Take-Down, (II) the expected timing and plan of distribution of such Non-Underwritten Shelf Take-Down, and (III) the action or actions required (including the timing thereof) in connection with such Non-Underwritten Shelf Take-Down.
Section 2.2. Demand Registrations.
(a) Holders’ Demand for Registration. Subject to Section 2.2(d), if, at a time when a Shelf Registration Statement is not effective pursuant to Section 2.1, PubCo shall receive from an Eligible Demand Participation Holder (such Holder(s), the “Demand Initiating Holder”) a written demand that PubCo effect any Registration in connection with an Underwritten Offering other than a Shelf Registration or a Shelf Take-Down (a “Demand Registration”) of Registrable Securities held by such Holder(s) having a reasonably anticipated net aggregate offering price (after deduction of Underwriter commissions and offering expenses) of at least $50,000,000, PubCo will:
(i) promptly (but in any event within five (5) days prior to the date such Demand Registration becomes effective under the Securities Act) give written notice of the proposed Demand Registration to all other Holders; and
-12-
(ii) use its commercially reasonable efforts to effect such registration as soon as practicable and facilitate the sale and distribution of all or such portion of such Demand Initiating Holders’ Registrable Securities as are specified in such demand, together with all or such portion of the Registrable Securities of any other Holders joining in such demand (together with the Demand Initiating Holder, the “Participating Holders”) as are specified in a written demand received by PubCo within five (5) days after such written notice is given; provided that PubCo shall not be obligated to file any Registration Statement or other disclosure document pursuant to this Section 2.2 (but shall be obligated to continue to prepare such Registration Statement or other disclosure document) if the filing or effectiveness of such Registration Statement at any time would require PubCo to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to PubCo for reasons beyond PubCo’s control; provided, however, that PubCo may, in its discretion, defer the filing of such Registration Statement for an additional period (each, a “Demand Delay”) of not more than ninety (90) days; provided, however, that PubCo shall not exercise, in any twelve (12) month period, more than two (2) Demand Delays pursuant to this Section 2.2(a), unless consented to in writing by the Participating Holders holding a majority of the Registrable Securities held by such Participating Holders. Each Participating Holder shall keep confidential the fact that a Demand Delay is in effect and the contents of any notice by PubCo of a Demand Delay for the permitted duration of the Demand Delay or until otherwise notified by PubCo, except (A) for disclosure to such Participating Holder’s employees, agents and professional advisers who need to know such information and are obligated to keep it confidential, (B) for disclosures to the extent required in order to comply with reporting obligations to its limited partners who have agreed to keep such information confidential or (C) as required by law.
(b) Underwriting. If the Demand Initiating Holders intend to distribute the Registrable Securities covered by their demand by means of an Underwritten Offering, they shall so advise PubCo as part of their demand made pursuant to this Section 2.2, and PubCo shall include such information in the written notice referred to in Section 2.2(a)(i). In such event, the right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in the Underwritten Offering to the extent provided herein. PubCo, together with all holders of Registrable Securities proposing to distribute their securities through such Underwritten Offering, shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected by PubCo and reasonably satisfactory to the Participating Holders that own a majority of the Registrable Securities to be offered for sale in such Underwritten Offering. Notwithstanding any other provision of this Section 2.2, if the Underwriter shall advise PubCo that marketing factors (including an adverse effect on the per security offering price) require a limitation of the number of Registrable Securities to be underwritten, then PubCo shall so advise all Participating Holders that have requested to participate in such offering, and the number of Registrable Securities that may be included in the Demand Registration and Underwritten Offering shall be allocated in the following manner: (A) first, to the Participating Holders on a pro rata basis based on the total number of Registrable Securities held by such Holders, (B) second, to PubCo and (C) third, to other holders of Equity Securities of PubCo exercising a contractual or other right to dispose of such Equity Securities in such Underwritten Offering on a pro rata basis based on the total number of Equity Securities of PubCo held by such persons; provided, that any Registrable Securities or Equity Securities thereby allocated to any such person that exceed such person’s request shall be reallocated among the remaining requesting Participating Holders or other requesting holders, as applicable, in like manner. No Registrable Securities excluded from the Underwritten Offering by reason of the Underwriter’s marketing limitation shall be included in such Demand Registration. For the avoidance of doubt, PubCo may include securities for its own account (or for the account of any other Persons) in such Demand Registration subject to the limitations of this Section 2.2.
(c) Effective Registration. PubCo shall be deemed to have effected a Demand Registration if the Registration Statement pursuant to such registration is declared effective by the SEC and PubCo has complied with all of its obligations under this A&R Registration Rights Agreement with respect
-13-
thereto. No Demand Registration shall be deemed to have been effected if such registration is subsequently interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court unless and until (i) such stop order or injunction is removed, rescinded or otherwise terminated and (ii) a majority-in-interest of the Demand Initiating Holders thereafter affirmatively elect to continue with such Registration and accordingly notify PubCo in writing, but in no event later than five (5) days, of such election; provided that PubCo shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
(d) Restrictions on Registered Offerings. Notwithstanding the rights and obligations set forth in Section 2.1 and/or Section 2.2, in no event shall PubCo be obligated to take any action to effect:
(i) any Demand Registration or Shelf Take-Down at the request of any Holder prior to the expiration of the Lock-Up Period, to the extent such request relates to Registrable Securities that have not been released from the Lock-Up restrictions of Section 3.1;
(ii) any Demand Registration or Underwritten Shelf Take-Down at the request of the Sponsor, except the Sponsor shall be entitled to initiate one (1) Demand Registration or Underwritten Shelf Take-Down in accordance with the terms of this Article 2, to the extent such request relates to Registrable Securities that have been released from the Lock-Up restrictions of Section 3.1;
(iii) more than three (3) Demand Registrations under this Section 2.2 (other than under clause (ii) above), except the Company Shareholders shall be entitled to initiate two (2) Demand Registrations or Underwritten Shelf Take-Downs in accordance with the terms of this Article 2;
(iv) more than an aggregate of three (3) Underwritten Offerings (including Underwritten Shelf Take-Downs) (other than under clause (ii) above), except the Company Shareholders shall be entitled to initiate two (2) Underwritten Offerings in accordance with the terms of this Article 2;
(v) more than one (1) Underwritten Offering (including Underwritten Shelf Take-Downs) in any 180-day period; or
(vi) any Demand Registration while a Shelf Registration Statement remains outstanding in accordance with the terms of this A&R Registration Rights Agreement.
A majority-in-interest of the Demand Initiating Holders shall have the right to withdraw from a Demand Registration for any or no reason whatsoever upon written notification to PubCo and any Underwriter or Underwriters of their intention to withdraw from such Demand Registration prior to the effectiveness of the Registration Statement filed with the SEC with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. If a majority-in-interest of the Demand Initiating Holders (i) withdraws from a proposed offering pursuant to this Section 2.2(d) and (ii) reimburse the Registration Expenses of PubCo incurred in respect of such aborted Demand Registration, then such registration shall not count as a Demand Registration provided for in Section 2.2.
Notwithstanding anything to the contrary in this Section 2.2(d), in the event that Company Shareholders that are Demand Initiating Holders or Shelf Take-Down Initiating Holders, as applicable, do not sell at least fifty percent (50%) of the Registrable Securities requested to be sold in a Demand Registration or an Underwritten Shelf Take-Down as a result of the Underwriter advising PubCo that marketing factors (including an adverse effect on the per security offering price) require a limitation of the number of Registrable Securities to be underwritten, then for purposes of clauses (iv), (v) and (vi) above, such Demand Registration or Underwritten Shelf Take-Down (as applicable) shall not be considered a Demand Registration or Underwritten Shelf Take-Down effected at the request of such Demand Initiating Holder or Shelf Take-Down Initiating Holder.
-14-
Section 2.3. Piggyback Registration.
(a) If at any time or from time to time PubCo shall determine to register any of its Equity Securities, either for its own account or for the account of security holders (other than in (1) a registration relating solely to employee benefit plans, (2) a registration statement on Form S-4 or S-8 (or such other similar successor forms then in effect under the Securities Act), (3) a registration pursuant to which PubCo is offering to exchange its own securities for other securities, (4) a registration statement relating solely to dividend reinvestment or similar plans, (5) a Shelf Registration Statement pursuant to which only the initial purchasers and subsequent Transferees of debt securities of PubCo or any of its subsidiaries that are convertible for Common Stock and that are initially issued pursuant to Rule 144A and/or Regulation S (or any successor provision) of the Securities Act may resell such notes and sell the Common Stock into which such notes may be converted, (6) a registration pursuant to Section 2.1 or Section 2.2 hereof, (7) a “universal” Shelf Registration Statement on Form S-3) or (8) a registration expressly contemplated by the PIPE Subscription Agreements, PubCo will:
(i) promptly (but in no event less than ten (10) days before the effective date of the relevant Registration Statement) give to each Holder written notice thereof; and
(ii) include in such Registration (and any related qualification under state securities laws or other compliance), and in any Underwritten Offering involved therein, all the Registrable Securities specified in a written request or requests made within five (5) days after receipt of such written notice from PubCo by any Holder or Holders except as set forth in Section 2.3(b) below.
Each Holder shall keep confidential its receipt of any such notice until the contents of such notice are publicly announced by PubCo or until otherwise notified by PubCo, except (A) for disclosure to such Holder’s employees, agents and professional advisers who need to know such information and are obligated to keep it confidential, (B) for disclosures to the extent required in order to comply with reporting obligations to its limited partners who have agreed to keep such information confidential or (C) as required by law or subpoena.
Notwithstanding anything herein to the contrary, this Section 2.3 shall not apply (i) prior to the expiration of the Lock-Up Period in respect of any Holder, to the extent relating to Registrable Securities that have not been released from the Lock-Up restrictions of Section 3.1 or (ii) to any Shelf Take-Down irrespective of whether such Shelf Take-Down is an Underwritten Shelf Take-Down or not an Underwritten Shelf Take-Down.
(b) Underwriting. If the Registration of which PubCo gives notice pursuant to Section 2.3(a) is for an Underwritten Offering, PubCo shall so advise the Holders as a part of the written notice given pursuant to Section 2.3(a)(i). In such event the right of any Holder to participate in such registration pursuant to this Section 2.3 shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in the Underwritten Offering to the extent provided herein. All Holders proposing to dispose of their Registrable Securities through such Underwritten Offering, together with PubCo and the other parties distributing their Equity Securities of PubCo through such Underwritten Offering, shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Underwritten Offering by PubCo. Notwithstanding any other provision of this Section 2.3, if the Underwriters shall advise PubCo that marketing factors (including, without limitation, an adverse effect on the per security offering price) require a limitation of the number of Registrable Securities to be underwritten, then PubCo may limit the number of Registrable Securities to be included in the Registration and Underwritten Offering as follows:
-15-
(i) If the Registration is initiated and undertaken for PubCo’s account, PubCo shall so advise all Holders of Registrable Securities that have requested to participate in such offering, and the number of Registrable Securities that may be included in the Registration and Underwritten Offering shall be allocated in the following manner: (A) first, to PubCo, (B) second, to the Holders of Registrable Securities on a pro rata basis based on the total number of Registrable Securities held by such Holders and (C) third, to other holders of Equity Securities of PubCo exercising a contractual or other right to dispose of such Equity Securities in such Underwritten Offering on a pro rata basis based on the total number of Equity Securities of PubCo held by such persons; provided, that any Registrable Securities or Equity Securities thereby allocated to any such person that exceed such person’s request shall be reallocated among the remaining requesting Holders or other requesting holders, as applicable, in like manner.
(ii) If the Registration is initiated and undertaken at the request of one or more holders of Equity Securities of PubCo who are not Holders, PubCo shall so advise all Holders of Registrable Securities that have requested to participate in such offering, and the number of Registrable Securities that may be included in the Registration and Underwritten Offering shall be allocated in the following manner: (A) first, to the initiating holders of Equity Securities of PubCo exercising a contractual or other right to dispose of such Equity Securities in such Underwritten Offering, on a pro rata basis based on the total number of Equity Securities of PubCo, (B) second, to the Holders of Registrable Securities on a pro rata basis based on the total number of Registrable Securities held by such Holders, (C) third, to PubCo, (D) fourth, to other holders of Equity Securities of PubCo exercising a contractual or other right to dispose of such Equity Securities in such Underwritten Offering on a pro rata basis based on the total number of Equity Securities of PubCo held by such persons; provided, that any Registrable Securities or Equity Securities thereby allocated to any such person that exceed such person’s request shall be reallocated among the remaining requesting Holders or other requesting holders, as applicable, in like manner.
No securities excluded from the Underwritten Offering by reason of the Underwriter’s marketing limitation shall be included in such Registration.
(c) Right to Terminate Registration. PubCo shall have the right to terminate or withdraw any Registration initiated by it under this Section 2.3 prior to the effectiveness of such Registration whether or not any Holder has elected to include Registrable Securities in such Registration.
Section 2.4. Expenses of Registration. Except as provided in Section 2.2(d), all Registration Expenses incurred in connection with all Registrations or other Transfers effected pursuant to or permitted by this A&R Registration Rights Agreement shall be borne by PubCo. It is acknowledged by the Holders that the Holders selling or otherwise Transferring any Registrable Securities in any Registration or Transfer shall bear all incremental selling expenses relating to the sale or Transfer of such Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing such Holders, in each case pro rata based on the number of Registrable Securities that such Holders have sold or Transferred in such Registration. Any transfer taxes with respect to the sale of Registrable Securities will be borne by the Holder of such Registrable Securities.
Section 2.5. Obligations of PubCo. Whenever required under this Article 2 to effect the Registration of any Registrable Securities, PubCo shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold or are no longer outstanding (such period, the “Effectiveness Period”);
-16-
(b) prepare and file with the SEC such amendments, post-effective amendments and supplements to such Registration Statement and the Prospectus used in connection with such Registration Statement as may be required by the rules, regulations or instructions applicable to the registration form used by PubCo or by the Securities Act or rules and regulations thereunder to keep such Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
(c) permit a representative of the Holders, any Underwriter participating in any distribution pursuant to such Registration and any attorney or accountant retained by such Holders, to participate in good faith in the preparation of such Registration Statement and cause PubCo’s officers, directors and employees to supply all information reasonably requested by any such representative, attorney or accountant in connection with the Registration; provided, however, that such representatives enter into a confidentiality agreement, in form and substance reasonably satisfactory to PubCo, prior to the release or disclosure of any such information;
(d) during the Effectiveness Period, furnish to the Holders such numbers of copies of the Registration Statement and the related Prospectus, including all exhibits thereto and documents incorporated by reference therein and a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them; provided that PubCo will not have any obligation to provide any document pursuant to this clause that is available on the SEC’s EDGAR system;
(e) in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter(s) of such offering; each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement;
(f) notify each Holder of Registrable Securities covered by such Registration Statement, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes existing Misstatement;
(g) notify each Holder of Registrable Securities covered by such Registration Statement as soon as reasonably practicable after notice thereof is received by PubCo of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final Prospectus or the initiation or threatening of any proceedings for such purposes, or any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;
(h) use its commercially reasonable efforts to prevent the issuance of any stop order suspending the effectiveness of any Registration Statement or of any order preventing or suspending the use of any preliminary or final Prospectus and, if any such order is issued, to use commercially reasonable efforts to obtain the withdrawal of any such order as soon as reasonably practicable;
(i) use its commercially reasonable efforts to register or qualify, and cooperate with the Holders of Registrable Securities covered by such Registration Statement, the Underwriters, if any, and
-17-
their respective counsel, in connection with the Registration or qualification of such Registrable Securities for offer and sale under the blue sky or securities laws of each state and other jurisdiction of the United States as any such Holder or Underwriters, if any, or their respective counsel reasonably request in writing, and do any and all other things reasonably necessary or advisable to keep such Registration or qualification in effect for such period as required by Section 2.1(b) and Section 2.2(c), as applicable; provided, that PubCo shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or take any action which would subject it to taxation or service of process in any such jurisdiction where it is not then so subject;
(j) in the case of an Underwritten Offering, obtain for delivery to the Underwriters an opinion or opinions from counsel for PubCo, dated the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to the managing Underwriter;
(k) in the case of an Underwritten Offering, obtain for delivery to PubCo and the Underwriters a comfort letter from PubCo’s independent certified public accountants in customary form and covering such matters of the type customarily covered by comfort letters as the managing Underwriter reasonably requests;
(l) use its commercially reasonable efforts to list the Registrable Securities that are covered by such Registration Statement with any securities exchange or automated quotation system on which the Common Stock or other Equity Securities of PubCo, as applicable, are then listed;
(m) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement;
(n) cooperate with Holders including Registrable Securities in such Registration and the managing Underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, such certificates to be in such denominations and registered in such names as such Holders or the managing Underwriters may request at least two (2) Business Days prior to any sale of Registrable Securities;
(o) make available to its security holders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the SEC);
(p) in the case of an Underwritten Offering that is Marketed, cause appropriate personnel of PubCo to participate in the customary “road show” presentations that may be reasonably requested by the managing Underwriter; and
(q) otherwise, in good faith, reasonably cooperate with, and take such customary actions as may reasonably be requested by, the Holders, in connection with such Registration.
Section 2.6. Indemnification.
(a) PubCo will, and does hereby undertake to, indemnify and hold harmless each Holder of Registrable Securities and each of such Holder’s officers, directors, partners, members, stockholders and agents, legal counsel and accountants for each such Holder, any underwriter (as defined in the Securities Act) for each such Holder and each Person, if any, who controls such Holder, within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act against all claims,
-18-
losses, damages, liabilities and expenses (including reasonable attorneys’ fees) arising out of or based upon any Misstatement or alleged Misstatement or any violation or alleged violation by PubCo (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law; provided that PubCo will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission made in reliance and in conformity with written information furnished to PubCo by such Holder expressly for use therein.
(b) Each Holder (if Registrable Securities held by or issuable to such Holder are included in such Registration, qualification, compliance or sale pursuant to this Article 2) will, and does hereby undertake to, indemnify and hold harmless, severally and not jointly, PubCo and each of its officers who has signed the Registration Statement, directors, partners, members, stockholders and agents, legal counsel and accountants for PubCo, any underwriter (as defined in the Securities Act), any other Holder selling securities in such Registration Statement, any controlling Person of any such underwriter or other Holder and each Person, if any, who controls PubCo within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, against all claims, losses, damages, liabilities and expenses (including reasonable attorneys’ fees) (or actions in respect thereof) arising out of or based upon (i) any Misstatement or alleged Misstatement or (ii) any violation or alleged violation by PubCo (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law, but in the case of clause (i), only to the extent, that such Misstatement or alleged Misstatement was made in such Registration Statement, prospectus, offering circular, free writing prospectus or other document, in reliance upon and in conformity with written information that relates to such Holder in its capacity as a selling security Holder and was furnished to PubCo by such Holder expressly for use therein; provided, however, that the aggregate liability of each Holder hereunder shall be limited to the net proceeds after underwriting discounts and commissions received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation, except in the case of fraud or willful misconduct by such Holder.
(c) Each party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice to the party required to provide such indemnification (the “Indemnifying Party”) of any claim as to which indemnification may be sought promptly after such Indemnified Party has actual knowledge thereof, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be subject to approval by the Indemnified Party (whose approval shall not be unreasonably withheld) and the Indemnified Party may participate in such defense at the Indemnifying Party’s expense if representation of such Indemnified Party would be, in the reasonable judgment of the Indemnified Party, inappropriate due to an actual or potential conflict of interest between such Indemnified Party and any other party represented by such counsel in such proceeding or there may be reasonable defenses available to the Indemnified Party that are different from or additional to those available to the Indemnifying Party; and provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.6, except to the extent that such failure to give notice materially prejudices the Indemnifying Party in the defense of any such claim or any such litigation. An Indemnifying Party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such Indemnifying Party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. If such defense is assumed by the Indemnifying Party, the Indemnifying Party shall not be subject to any liability for any settlement made by the Indemnified Party without its consent (but such consent shall not be unreasonably withheld). No Indemnifying Party shall, without the consent of the Indemnified Party, not to be unreasonably withheld or delayed, consent to the entry of any judgment or enter into any settlement which cannot be settled in all
-19-
respects by the payment of money (and such money is so paid by the Indemnifying Party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.
(d) In order to provide for just and equitable contribution in case indemnification is prohibited or limited by law, the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any Misstatement or alleged Misstatement, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and such Person’s relative intent, knowledge, access to information and opportunity to correct or prevent such actions; provided, however, that in any case, (i) no Holder will be required to contribute any amount in excess of the net proceeds after underwriting discounts and commissions received by such Holder upon the sale of the Registrable Securities giving rise to such contribution obligation and (ii) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.6(d) were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 2.6(d).
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in any underwriting agreement entered into in connection with any Underwritten Offering conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.
Section 2.7. Information by Holder. The Holder or Holders of Registrable Securities included in any Registration shall furnish to PubCo such information regarding such Holder or Holders and the distribution proposed by such Holder or Holders as PubCo may reasonably request in writing and as shall be required in connection with any Registration, qualification or compliance referred to in this Article 2. Each Holder agrees, if requested in writing by PubCo, to represent to PubCo the total number of Registrable Securities held by such Holder in order for PubCo to make determinations under this A&R Registration Rights Agreement, including for purposes of Section 2.9 hereof. Notwithstanding anything to the contrary contained in this A&R Registration Rights Agreement, if any Holder does not provide PubCo with information requested pursuant to this Section 2.7, PubCo may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if PubCo determines, based on the advice of outside counsel, that such information is necessary to effect the Registration and such Holder continues thereafter to withhold such information. No Person may participate in any Underwritten Offering of Equity Securities of PubCo pursuant to a Registration under this A&R Registration Rights Agreement unless such Person completes and executes all customary questionnaires, powers of attorney, custody agreements, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements. Subject to the minimum thresholds set forth in Section 2.1(d)(ii) and Section 2.2(a) of this A&R Registration Rights Agreement, the exclusion of a Holder’s Registrable Securities as a result of this Section 2.7 shall not affect the registration of the other Registrable Securities to be included in such Registration.
Section 2.8. Delay of Registration. No Holder shall have any right to obtain, and hereby waives any right to seek, an injunction restraining or otherwise delaying any such Registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article 2.
-20-
Section 2.9. Rule 144 Reporting. As long as any Holder shall own Registrable Securities, PubCo, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by PubCo after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act. PubCo further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to resell or otherwise dispose of shares of Registrable Securities held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the SEC), including providing any customary legal opinions. Upon the request of any Holder, PubCo shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
Section 2.10. “Market Stand Off” Agreement. Each Holder hereby agrees with PubCo that, with respect to Underwritten Offerings in which such Holder participates, during such period (which period shall in no event exceed 90 days) following the effective date of a Registration Statement of PubCo (or, in the case of an Underwritten Shelf Take-Down, the date of the filing of a preliminary Prospectus or Prospectus supplement relating to such Underwritten Offering (or if there is no such filing, the first contemporaneous press release announcing commencement of such Underwritten Offering)) as the Holders that own a majority of the Registrable Securities participating in such Underwritten Offering may agree to with the Underwriter or Underwriters of such Underwritten Offering (a “Market Stand-Off Period”), such Holder or its Affiliates shall not Transfer (other than to donees who agree to be similarly bound) any Registrable Securities held by it at any time during such period except Registrable Securities included in such Registration. In connection with any Underwritten Offering contemplated by this Section 2.10, PubCo shall use commercially reasonable efforts to cause each director and executive officer of PubCo to execute a customary lock-up for the Market Stand-Off Period. Each Holder agrees with PubCo that it shall deliver to the Underwriter or Underwriters for any such Underwritten Offering a customary agreement (with customary terms, conditions and exceptions) that is substantially similar to the agreement delivered to the Underwriter or Underwriters by the Holders that own a majority of the Registrable Securities participating in such Registration reflecting their agreement set forth in this Section 2.10; provided, that such agreement shall not be materially more restrictive than any similar agreement entered into by PubCo’s directors and executive officers participating in such Underwritten Offering; provided, further, that such agreement shall not be required unless all Holders are required to enter into similar agreements; provided, further, that such agreement shall provide that any early release of any Holder from the provisions of the terms of such agreement shall be on a pro rata basis among all Holders.
Section 2.11. Other Obligations. In connection with a Transfer of Registrable Securities exempt from Section 5 of the Securities Act or through any broker-dealer transactions described in the plan of distribution set forth within the Prospectus and pursuant to the Registration Statement of which such Prospectus forms a part, PubCo shall, subject to applicable Law, as interpreted by PubCo with the advice of counsel, and the receipt of any customary documentation required from the applicable Holders in connection therewith, (a) promptly instruct its transfer agent to remove any restrictive legends applicable to the Registrable Securities being Transferred and (b) cause its legal counsel to deliver the necessary legal opinions, if any, to the transfer agent in connection with the instruction under clause (a). In addition, PubCo shall cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with the aforementioned Transfers; provided, however, that PubCo shall have no obligation to participate in any “road shows” or assist with the preparation of any offering memoranda or related documentation with respect to any Transfer of Registrable Securities in any transaction that does not constitute an Underwritten Offering.
Section 2.12. Term. Article 2 shall terminate on the earlier of (i) the fifth (5^th^) anniversary of the date of this A&R Registration Rights Agreement and (ii) with respect to any Holder, on the date that such Holder no longer holds any Registrable Securities. The provisions of Section 2.6 shall survive any such termination with respect to such Holder.
-21-
Section 2.13. Other Registration Rights. Other than the registration rights set forth in the Original RRA and in the PIPE Subscription Agreements, PubCo represents and warrants that no Person, other than a Holder of Registrable Securities pursuant to this A&R Registration Rights Agreement, has any right to require PubCo to register any securities of PubCo for sale or to include such securities of PubCo in any Registration Statement filed by PubCo for the sale of securities for its own account or for the account of any other Person. Further, each of PubCo and the Sponsor represents and warrants that this A&R Registration Rights Agreement supersedes any other registration rights agreement or agreement (including the Original RRA), among any of the relevant parties; other than, in respect of any Holders who are also party to the PIPE Subscription Agreements, the PIPE Subscription Agreements.
Section 2.14. Termination of OriginalRRA. Upon the Closing, PubCo and the Sponsor hereby agree that the Original RRA and all of the respective rights and obligations of the parties thereunder are hereby terminated in their entirety and shall be of no further force or effect.
ARTICLE 3
LOCK-UP
Section 3.1. Lock-Up.
(a) Subject to Section 3.1(b), the Holders may not Transfer any Lock-Up Shares during the Lock-Up Period (the “Lock-Up”).
(b) Notwithstanding the provisions set forth in Section 3.1(a), the Holders or their respective Permitted Transferees may Transfer the Lock-Up Shares during the Lock-Up Period (i) as a bona fide gift or charitable contribution; (ii) to a trust, or other entity formed for estate planning purposes for the primary benefit of the spouse, domestic partner, parent, sibling, child or grandchild of such Holder or any other natural person with whom such Holder has a relationship by blood, marriage or adoption not more remote than first cousin; (iii) by will or intestate succession upon the death of the Holder; (iv) pursuant to a qualified domestic order, court order or in connection with a divorce settlement, or any legal, regulatory or other order; (v) if such Holder is a corporation, partnership (whether general, limited or otherwise), limited liability company, trust or other business entity, (A) to another corporation, partnership, limited liability company, trust or other business entity that controls, is controlled by or is under common control or management with the Holder, or (B) to partners, limited liability company members or stockholders of the Holder, including, for the avoidance of doubt, where the Holder is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership; (vi) if such Holder is a trust, to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust; (vii) to a nominee or custodian of a person or entity to whom a disposition or Transfer would be permissible under clauses (i) through (vi) of this Section 3.1(b); (viii) as a pledge or other grant of a security interest in Lock-Up Shares to one or more financial or lending institutions as collateral or security in connection with any bona fide loans, advances or extensions of credit or debt transaction (or enforcement thereunder) entered into by the Holder or any of its Affiliates, or any refinancings thereof, and any Transfers of such Lock-Up Shares upon foreclosure thereof, so long as the applicable Transferee agrees in writing to be bound by the restrictions set forth herein; (ix) pursuant to a bona fide third-party tender offer, merger, stock sale, recapitalization, consolidation or other transaction involving a change in control of PubCo; provided, however, that if such tender offer, merger, stock sale, recapitalization, consolidation or other such transaction is not completed, the Lock-Up Shares shall remain subject to the Lock-Up; (x) the establishment of a trading plan pursuant to Rule 10b5-1 promulgated under the 1934 Act; provided, however, that such plan does not provide for the Transfer of Lock-Up Shares during the Lock-Up Period; (xi) to PubCo in connection with the repurchase
-22-
of such Holder’s shares in connection with the termination of the Holder’s employment with PubCo or any subsidiary of PubCo pursuant to contractual agreements with the PubCo; (xii) to satisfy tax withholding obligations in connection with the exercise of options to purchase shares of Common Stock of PubCo or the vesting or settlement of PubCo stock-based awards; (xiii) in payment on a “net exercise” or “cashless” basis of the exercise or purchase price with respect to the exercise of options to purchase shares of Common Stock of PubCo; or (xiv) from and after the occurrence of a Triggering Event (the “ReleaseDate”).
(c) In order to enforce this Section 3.1, PubCo may impose stop transfer instructions with respect to the Lock-Up Shares until the end of the Lock-Up Period.
(d) Notwithstanding the other provisions set forth in this Section 3.1, the Board (including, for the avoidance of doubt and to the fullest extent permitted by law, a duly authorized committee thereof) may, in its sole discretion, determine to waive, amend, or repeal the Lock-Up obligations set forth herein; provided that, for so long as at least one director designated by Sponsor is then serving on the Board, any decision by the Board (or such committee) to waive, amend, or repeal the Lock-Up obligations set forth herein shall include the affirmative vote or consent of at least one director designated by Sponsor.
(e) The Transferee of any Lock-Up Shares prior to the expiration of the Lock-Up Period in accordance with the terms of this A&R Registration Rights Agreement shall have no rights under this A&R Registration Rights Agreement, unless, for the avoidance of doubt, such Transferee is a Permitted Transferee. Any Transferee of Lock-Up Shares who is a Permitted Transferee of the Transferor shall be required, at the time of and as a condition to such Transfer, to become a party to this A&R Registration Rights Agreement by executing and delivering a joinder in the form attached to this A&R Registration Rights Agreement as Exhibit B, whereupon such Transferee will be treated as a Party (with the same rights and obligations as the Transferor) for all purposes of this A&R Registration Rights Agreement. Notwithstanding the foregoing provisions of this Section 3.1(e), a Holder may (i) not make a Transfer to a Permitted Transferee if such Transfer has as a purpose the avoidance of or is otherwise undertaken in contemplation of avoiding the restrictions on Transfers in this A&R Registration Rights Agreement (it being understood that the purpose of this provision includes prohibiting the Transfer to a Permitted Transferee (A) that has been formed to facilitate a material change with respect to who or which entities beneficially own the underlying Lock-Up Shares, or (B) followed by a change in the relationship between the Holder and the Permitted Transferee (or a change of control of such Holder or Permitted Transferee) after the Transfer with the result and effect that the Holder has indirectly made a Transfer of Lock-Up Shares by using a Permitted Transferee, which Transfer would not have been directly permitted under this Section 3.1 had such change in such relationship occurred prior to such Transfer).
ARTICLE 4
GENERAL PROVISIONS
Section 4.1. Assignment; Successors and Assigns; No Third-Party Beneficiaries.
(a) Except as otherwise permitted pursuant to this A&R Registration Rights Agreement, no Party may assign such Party’s rights and obligations under this A&R Registration Rights Agreement, in whole or in part, without the prior written consent of PubCo. Any such assignee may not again assign those rights, other than in accordance with this Article 4. Any attempted assignment of rights or obligations in violation of this Article 4 shall be null and void.
(b) Notwithstanding anything to the contrary contained in this A&R Registration Rights Agreement (other than the succeeding sentence of this Section 4.1(b)), (i) prior to the expiration of the Lock-Up Period, a Holder may not Transfer such Holder’s rights or obligations under this A&R
-23-
Registration Rights Agreement in connection with a Transfer of such Holder’s Registrable Securities, in whole or in part, except in connection with a Transfer pursuant to Section 3.1(b); and (ii) after the expiration of the Lock-Up restrictions in Section 3.1 with respect to any Registrable Securities held by a Holder, a Holder may Transfer such Holder’s rights or obligations under this A&R Registration Rights Agreement in connection with a Transfer of such Registrable Securities, in whole or in part, to (x) any of such Holder’s Permitted Transferees, or (y) any Person with the prior written consent of PubCo. Any Transferee of Registrable Securities (other than pursuant to an effective registration statement under the Securities Act or pursuant to a Rule 144 transaction) shall, except as otherwise expressly stated herein, have all the rights and be subject to all of the obligations of the Transferor Holder under this A&R Registration Rights Agreement and shall be required, at the time of and as a condition to such Transfer, to become a party to this A&R Registration Rights Agreement by executing and delivering a joinder in the form attached to this A&R Registration Rights Agreement as Exhibit B. No Transfer of Registrable Securities by a Holder shall be registered on PubCo’s books and records, and such Transfer of Registrable Securities shall be null and void and not otherwise effective, unless any such Transfer is made in accordance with the terms and conditions of this A&R Registration Rights Agreement, and PubCo is hereby authorized by all of the Holders to enter appropriate stop transfer notations on its transfer records to give effect to this A&R Registration Rights Agreement.
(c) All of the terms and provisions of this A&R Registration Rights Agreement shall be binding upon the Parties and their respective successors, assigns, heirs and Representatives, but shall inure to the benefit of and be enforceable by the successors, assigns, heirs and Representatives of any Party only to the extent that they are permitted successors, assigns, heirs and Representatives pursuant to the terms of this A&R Registration Rights Agreement.
(d) Nothing in this A&R Registration Rights Agreement, express or implied, is intended to confer upon any Party, other than the Parties and their respective permitted successors, assigns, heirs and Representatives, any rights or remedies under this A&R Registration Rights Agreement or otherwise create any third party beneficiary hereto.
Section 4.2. Termination. Article 2 of this A&R Registration Rights Agreement shall terminate as set forth in Section 2.13. The remainder of this A&R Registration Rights Agreement shall terminate automatically (without any action by any Party) as to each Holder when such Holder, following the Closing Date, ceases to Beneficially Own any Registrable Securities. Notwithstanding anything herein to the contrary, in the event the Merger Agreement terminates in accordance with its terms prior to the Closing, this A&R Registration Rights Agreement shall automatically terminate and be of no further force or effect, without any further action required by the Parties.
Section 4.3. Severability. If any provision of this A&R Registration Rights Agreement is determined to be invalid, illegal or unenforceable by any Governmental Entity, the remaining provisions of this A&R Registration Rights Agreement, to the extent permitted by Law shall remain in full force and effect.
Section 4.4. Entire Agreement; Amendments; No Waiver.
(a) This A&R Registration Rights Agreement, together with the Exhibits to this A&R Registration Rights Agreement, the Merger Agreement and all other Transaction Agreements (as such term is defined in the Merger Agreement), constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous agreements, understandings and discussions, whether oral or written, relating to such subject matter in any way, including the Original RRA, and there are no warranties, representations or other agreements among the Parties in connection with such subject matter except as set forth in this A&R Registration Rights Agreement and therein.
-24-
(b) No provision of this A&R Registration Rights Agreement may be amended or modified in whole or in part at any time without the express written consent of PubCo and the Holders holding in the aggregate more than fifty percent (50%) of the Registrable Securities Beneficially Owned by the Holders; provided that any such amendment or modification that adversely affects any right granted to Holder, solely in their capacity as a holder of the shares of capital stock of PubCo, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected.
(c) No waiver of any provision or default under, nor consent to any exception to, the terms of this A&R Registration Rights Agreement shall be effective unless in writing and signed by the Party to be bound and then only to the specific purpose, extent and instance so provided.
Section 4.5. Counterparts; Electronic Delivery. This A&R Registration Rights Agreement and any other agreements, certificates, instruments and documents delivered pursuant to this A&R Registration Rights Agreement may be executed and delivered in one or more counterparts and by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. No Party shall raise the use of a fax machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a fax machine or email as a defense to the formation or enforceability of a contract and each Party forever waives any such defense. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this A&R Registration Rights Agreement or any document to be signed in connection with this A&R Registration Rights Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
Section 4.6. Notices. All notices, demands and other communications to be given or delivered under this A&R Registration Rights Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next Business Day, (b) one (1) Business Day following sending by reputable overnight express courier (charges prepaid) or (c) three (3) calendar days following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing pursuant to the provisions of this Section 4.6, notices, demands and other communications shall be sent to the addresses indicated below or on the receiving party’s signature page:
if to PubCo, to:
ColdQuanta, Inc.
1315 W Century Dr #150
Louisville, CO 80027
Attention: Jim Stirbis
Email: legal@infleqtion.com
with a copy (which shall not constitute notice) to:
Cooley LLP
55 Hudson Yards
New York, NY 10001-2157
Attn: Peter Byrne
Kristin VanderPas
Email: pbyrne@cooley.com
kvanderpas@cooley.com
-25-
if to the Sponsor, to:
Churchill Sponsor X LLC
640 Fifth Avenue, 14^th^ Floor
New York, NY 10019
Attn: Jay Taragin
Email: Jay.Taragin@mkleinandcompany.com
with a copy (which shall not constitute notice) to:
Willkie Farr & Gallagher LLP
787 7th Avenue
New York, NY 10019
Attn: Greg Astrachan
Sean Ewen
Esther Chang
Email: gastrachan@willkie.com
sewen@willkie.com
eschang@willkie.com
Section 4.7. Governing Law; Waiver of Jury Trial; Jurisdiction. The Law of the State of Delaware shall govern (a) all Actions, claims or matters related to or arising from this A&R Registration Rights Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this A&R Registration Rights Agreement, and the performance of the obligations imposed by this A&R Registration Rights Agreement, in each case without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. EACH PARTY TO THIS A&R REGISTRATION RIGHTS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS A&R REGISTRATION RIGHTS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS A&R REGISTRATION RIGHTS AGREEMENT AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES UNDER THIS A&R REGISTRATION RIGHTS AGREEMENT. THE PARTIES FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH SUCH PARTY’S LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the Parties submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware, in any Action arising out of or relating to this A&R Registration Rights Agreement, agrees that all claims in respect of the Action shall be heard and determined in any such court and agrees not to bring any Action arising out of or relating to this A&R Registration Rights Agreement in any other courts. Each Party irrevocably consents to the service of process in any such Action by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Party, at its address for notices as provided in Section 4.6 of this A&R Registration Rights Agreement, such service to become effective ten (10) days after such mailing. Each Party hereby irrevocably waives any objection to such service of process and further irrevocably waives and agrees not
-26-
to plead or claim in any Action commenced hereunder or under any other documents contemplated hereby that service of process was in any way invalid or ineffective. Nothing in this Section 4.7, however, shall affect the right of any Party to serve legal process in any other manner permitted by Law or at equity; provided, that each of the Parties hereby waives any right it may have under the Laws of any jurisdiction to commence by publication any Action with respect to this A&R Registration Rights Agreement. To the fullest extent permitted by applicable Law, each of the Parties hereby irrevocably waives any objection it may now or hereafter have to the laying of venue of any Action arising out of or relating to this in any of the courts referred to in this Section 4.7 and hereby further irrevocably waives and agrees not to plead or claim that any such court is not a convenient forum for any such Action. Each Party agrees that a final judgment in any Action so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by Law or at equity, in any jurisdiction.
Section 4.8. Specific Performance. Each Party hereby agrees and acknowledges that it may be impossible to measure in money the damages that would be suffered if the Parties fail to comply with any of the obligations imposed on them by this A&R Registration Rights Agreement and that, in the event of any such failure, an aggrieved Party will be irreparably damaged and will not have an adequate remedy at Law. Any such Party may, therefore, be entitled (in addition to any other remedy to which such Party may be entitled at Law or in equity) to seek injunctive relief, including specific performance, to enforce such obligations, without the posting of any bond.
Section 4.9. Consents, Approvals and Actions. If any consent, approval or action of the Company Shareholders is required at any time pursuant to this A&R Registration Rights Agreement, such consent, approval or action shall be deemed given if the holders of a majority of the outstanding Equity Securities of PubCo held by the Company Shareholders at such time provide such consent, approval or action in writing at such time.
Section 4.10. Not aGroup; Independent Nature of Holders’ Obligations and Rights. The Holders and PubCo agree that the arrangements contemplated by this A&R Registration Rights Agreement are not intended to constitute the formation of a “group” (as defined in Section 13(d)(3) of the Exchange Act). Each Holder agrees that, for purposes of determining beneficial ownership of such Holder, it shall disclaim any beneficial ownership by virtue of this A&R Registration Rights Agreement of PubCo’s Equity Securities owned by the other Holders, and PubCo agrees to recognize such disclaimer in its Exchange Act and Securities Act reports. The obligations of each Holder under this A&R Registration Rights Agreement are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under this A&R Registration Rights Agreement. Nothing contained herein, and no action taken by any Holder pursuant hereto, shall be deemed to constitute the Holders as, and PubCo acknowledges that the Holders do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this A&R Registration Rights Agreement, and PubCo acknowledges that the Holders are not acting in concert or as a group, and PubCo shall not assert any such claim, with respect to such obligations or the transactions contemplated by this A&R Registration Rights Agreement. The decision of each Holder to enter into this A&R Registration Rights Agreement has been made by such Holder independently of any other Holder. Each Holder acknowledges that no other Holder has acted as agent for such Holder in connection with such Holder making its investment in PubCo and that no other Holder will be acting as agent of such Holder in connection with monitoring such Holder’s investment in the Common Stock or enforcing its rights under this A&R Registration Rights Agreement. PubCo and each Holder confirms that each Holder has had the opportunity to independently participate with PubCo and its subsidiaries in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this A&R Registration Rights Agreement, and it shall not be
-27-
necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the rights and obligations contemplated hereby was solely in the control of PubCo, not the action or decision of any Holder, and was done solely for the convenience of PubCo and its subsidiaries and not because it was required to do so by any Holder. It is expressly understood and agreed that each provision contained in this A&R Registration Rights Agreement is between PubCo and a Holder, solely, and not between PubCo and the Holders collectively and not between and among the Holders.
Section 4.11. Representations and Warranties of the Parties. Each of the Parties hereby represents and warrants to each of the other Parties as follows:
(a) Such Party, to the extent applicable, is duly organized or incorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or incorporation and has all requisite power and authority to conduct its business as it is now being conducted and is proposed to be conducted.
(b) Such Party has the full power, authority and legal right to execute, deliver and perform this A&R Registration Rights Agreement. The execution, delivery and performance of this A&R Registration Rights Agreement have been duly authorized by all necessary action, corporate or otherwise, of such Party. This A&R Registration Rights Agreement has been duly executed and delivered by such Party and constitutes their legal, valid and binding obligation, enforceable against it, him or her in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally.
(c) The execution and delivery by such Party of this A&R Registration Rights Agreement, the performance by such Party of their obligations hereunder by such Party does not and will not violate (i) in the case of Parties who are not individuals, any provision of its by-laws, charter, articles of association, partnership agreement or other similar organizational document, (ii) any provision of any material agreement to which it, he or she is a Party or by which it, he or she is bound or (iii) any law, rule, regulation, judgment, order or decree to which it, he or she is subject.
(d) Such Party is not currently in violation of any law, rule, regulation, judgment, order or decree, which violation could reasonably be expected at any time to have a material adverse effect upon such Party’s ability to enter into this A&R Registration Rights Agreement or to perform their obligations hereunder.
(e) There is no pending legal action, suit or proceeding that would materially and adversely affect the ability of such Party to enter into this A&R Registration Rights Agreement or to perform their obligations hereunder.
Section 4.12. No Third-PartyLiabilities. This A&R Registration Rights Agreement may only be enforced against the named parties hereto. All claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to any of this A&R Registration Rights Agreement, or the negotiation, execution or performance of this A&R Registration Rights Agreement (including any representation or warranty made in or in connection with this A&R Registration Rights Agreement or as an inducement to enter into this A&R Registration Rights Agreement), may be made only against the Persons that are expressly identified as parties hereto, as applicable; and no past, present or future direct or indirect director, officer, employee, incorporator, member, partner, stockholder, Affiliate, portfolio company in which any such Party or any of its investment fund Affiliates have made a debt or equity investment (and vice versa), agent, attorney or Representative of any Party hereto (including any Person negotiating or executing this A&R Registration Rights Agreement on behalf of a Party hereto), unless a Party to this A&R
-28-
Registration Rights Agreement, shall have any liability or obligation with respect to this A&R Registration Rights Agreement or with respect any claim or cause of action (whether in contract or tort) that may arise out of or relate to this A&R Registration Rights Agreement, or the negotiation, execution or performance of this A&R Registration Rights Agreement (including a representation or warranty made in or in connection with this A&R Registration Rights Agreement or as an inducement to enter into this A&R Registration Rights Agreement).
Section 4.13. Legends. Without limiting the obligations of PubCo set forth in Section 2.11, each of the Holders acknowledges that (i) no Transfer, hypothecation or assignment of any Registrable Securities Beneficially Owned by such Holder may be made except in compliance with applicable federal and state securities laws and (ii) PubCo shall (x) place customary restrictive legends on the certificates or book entries representing the Registrable Securities subject to this A&R Registration Rights Agreement and (y) remove such restrictive legends at the time the applicable Transfer and other restrictions contemplated thereby are no longer applicable to the Registrable Securities represented by such certificates or book entries.
Section 4.14. Adjustments. If there are any changes in the Common Stock as a result of stock split, stock dividend, combination or reclassification, or through merger, consolidation, recapitalization or other similar event, appropriate adjustment shall be made in the provisions of this A&R Registration Rights Agreement, as may be required, so that the rights, privileges, duties and obligations under this A&R Registration Rights Agreement shall continue with respect to the Common Stock as so changed.
(Signature Pages Follow)
-29-
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| CHURCHILL CAPITAL CORP X | |
|---|---|
| By: | /s/ Jay Taragin |
| Name: Jay Taragin | |
| Title: Chief Financial Officer |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| SPONSOR: | |
|---|---|
| CHURCHILL SPONSOR X LLC | |
| By: M. Klein and Company, the Managing Member | |
| By: | /s/ Michael Klein |
| Name: Michael Klein | |
| Title: Authorized Person |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: |
|---|
| DANA Z. ANDERSON |
| /s/ Dana Anderson |
| (Signature) |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: |
|---|
| CATHERINE LEGO |
| /s/ Catherine Lego |
| (Signature) |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: |
|---|
| ERIK THORESEN |
| /s/ Erik Thoresen |
| (Signature) |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: |
|---|
| PRANAV GOKHALE |
| /s/ Pranav Gokhale |
| (Signature) |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| BOKA GROUP HOLDINGS I LP | |
| By: | BOKA Group Holdings GP LLC |
| its general partnertner | |
| By: | /s/ John James |
| Name: John James | |
| Title: President |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| GLYNN PARTNERS VI, L.P. | |
| By: | Glynn Management VI, LLC General Partner |
| By: | /s/ David Glynn |
| Name: David Glynn | |
| Title: Managing Member |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| GLOBAL FRONTIER PARTNERS, LP | |
| By: | Global Frontier Investments, LLC General Partner |
| By: | /s/ W. Grant Dollens |
| Name: W. Grant Dollens | |
| Title: Managing Member |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| GLOBAL FRONTIER QUANTUM OPPORTUNITY FUND, LP | |
| By: | Global Frontier Investments, LLC General Partner |
| By: | /s/ W. Grant Dollens |
| Name: W. Grant Dollens | |
| Title: Managing Member |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| LCP QUANTUM PARTNERS II, LLC | |
| By: | LCP Quantum Management, LLC Manager |
| By: | /s/ Tyler Brous |
| Name: Tyler Brous | |
| Title: Manager |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| LCP QUANTUM PARTNERS III, LLC | |
| By: | LCP Quantum Management III, LLC Manager |
| By: | /s/ Tyler Brous |
| Name: Tyler Brous | |
| Title: Manager |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| LCP QUANTUM PARTNERS IV, LLC | |
| By: | LCP Quantum Management III, LLC Manager |
| By: | /s/ Tyler Brous |
| Name: Tyler Brous | |
| Title: Manager |
[Signature Page toA&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| LCP QUANTUM PARTNERS V, LLC | |
| By: | LCP Quantum Management III, LLC Manager |
| By: | /s/ Tyler Brous |
| Name: Tyler Brous | |
| Title: Manager |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| LCP QUANTUM PARTNERS, LLC | |
| By: | LCP Quantum Management, LLC Manager |
| By: | /s/ Tyler Brous |
| Name: Tyler Brous | |
| Title: Manager |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| KINSELLA INVESTMENT HOLDINGS, LLC | |
| By: | /s/ Matthew Kinsella |
| Name: | Matthew Kinsella |
| Title: | Manager |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| LEGO HOLDINGS, LP | |
| By: | /s/ Catherine Lego |
| Name: | Catherine Lego |
| Title: | General Partner |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| KRISTINA M. JOHNSON REVOCABLE TRUST | |
| By: | /s/ Kristina M. Johnson |
| Name: | Kristina M. Johnson |
| Title: | Manager |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| THE DAY REVOCABLE TRUST | |
| By: | /s/ Timothy Day |
| Name: | Timothy Day |
| Title: | Trustee |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| THE AARON MITCHELL DAY 2001 IRREVOCABLE TRUST | |
| By: | /s/ Timothy Day |
| Name: | Timothy Day |
| Title: | Trustee |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| THE CAMERON BLAKE DAY 2001 IRREVOCABLE TRUST | |
| By: | /s/ Timothy Day |
| Name: | Timothy Day |
| Title: | Trustee |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| THE MEGHAN ALYSSA DAY 2001 IRREVOCABLE TRUST | |
| By: | /s/ Timothy Day |
| Name: | Timothy Day |
| Title: | Trustee |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| THE JOHN R. KINSELLA REVOCABLE LIVING TRUST | |
| By: | /s/ John R. Kinsella |
| Name: | John R. Kinsella |
| Title: | Trustee |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| THE JOHN R. KINSELLA CHILDREN’S TRUST | |
| By: | /s/ Matthew Kinsella |
| Name: | Matthew Kinsella |
| Title: | Trustee |
| By: | /s/ Karen Kinsella |
| Name: | Karen Kinsella |
| Title: | Trustee |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| COMPANY STOCKHOLDER: | |
|---|---|
| FOUNDRY GROUP NEXT 2018, L.P | |
| By: | FG Next GP 2018, LLC |
| General Partner | |
| By: | /s/ Ryan McIntyre |
| Name: | Ryan McIntyre |
| Title: | Managing Director |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| MAVERICK ADVISORS FUND, L.P. | |
| By: | Maverick Capital Ventures, LLC General Partner |
| By: | Maverick Capital Advisors, L.P. Manager |
| By: | /s/ Ginessa Avila |
| Name: Ginessa A. Avila | |
| Title: Authorized Representative |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| MAVERICK DESIGNATED INVESTMENTS FUND, L.P. | |
| By: | /s/ Ginessa Avila |
| Name: Ginessa A. Avila | |
| Title: Authorized Signatory |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| MAVERICK SILICON FUND, L.P | |
| By: | /s/ Ginessa Avila |
| Name: Ginessa A. Avila | |
| Title: Authorized Signatory |
[Signature Page to A&R Registration Rights Agreement]
IN WITNESS WHEREOF, each of the Parties has duly executed this A&R Registration Rights Agreement as of the Effective Date.
| INSIDERS: | |
|---|---|
| MAVERICK VENTURES INVESTMENT FUND, L.P. | |
| By: | Maverick Capital Ventures, LLC General Partner |
| By: | Maverick Capital Advisors, L.P. Manager |
| By: | /s/ Ginessa Avila |
| Name: Ginessa A. Avila | |
| Title: Authorized Representative |
[Signature Page to A&R Registration Rights Agreement]
Exhibit A
Form of Joinder
This Joinder (this “Joinder”) to the Amended and Restated Registration Rights Agreement, made as of ___________, is executed by ___________ (“Joining Company Shareholder”).
WHEREAS, pursuant to the Merger Agreement, Joining Company Shareholder will receive shares of Common Stock; and
WHEREAS, Joining Company Shareholder is required to become a party to that certain Amended and Restated Registration Rights Agreement, dated as of September 8, 2025, among Churchill Capital Corp X, a Delaware corporation (“PubCo”) to be renamed Infleqtion, Inc. upon the Effective Date, and the other persons party thereto (the “A&R Registration RightsAgreement”) by executing and delivering this Joinder, whereupon such Joining Company Shareholder will be treated as a Party (with the same rights and obligations as other Insiders party thereto) for all purposes of the A&R Registration Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Definitions. To the extent capitalized words used in this Joinder are not defined in this Joinder, such words shall have the respective meanings set forth in the A&R Registration Rights Agreement.
Section 2.Joinder. Joining Company Shareholder hereby acknowledges and agrees that (a) such Joining Company Shareholder has received and read the A&R Registration Rights Agreement, and (b) such Joining Company Shareholder will be treated as a Party (with the same rights and obligations as other Company Shareholders party thereto and, if applicable, the other Insiders party thereto) for all purposes of the Amended and Restated Registration Rights Agreement.
Section 3. Notice. Any notice, demand or other communication under the Amended and Restated Registration Rights Agreement to Joining Company Shareholder shall be given to Joining Company Shareholder at the address set forth on the signature page hereto in accordance with Section 4.6 of the A&R Registration Rights Agreement.
Section 4. Governing Law. This Joinder shall be governed by and construed in accordance with the law of the State of Delaware.
Section 5. Counterparts; Electronic Delivery. This Joinder may be executed and delivered in one or more counterparts, by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Joinder or any document to be signed in connection with this Joinder shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
(signature page follows)
IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by the parties as of the date first above written.
| JOINING COMPANY STOCKHOLDER: |
|---|
| [____] |
| By: |
| Name: [____] |
| Title: [____] |
| Email: |
| --- |
| Mailing Address: |
| --- |
Signature Page to Joinder to Amended and Restated Registration Rights Agreement
Exhibit B
Form of Joinder
This Joinder (this “Joinder”) to the A&R Registration Rights Agreement, made as of ___________, is between ___________ (“Transferor”) and ___________ (“Transferee”).
WHEREAS, as of the date hereof, Transferee is acquiring Registrable Securities (the “Acquired Interests”) from Transferor;
WHEREAS, Transferor is a party to that certain A&R Registration Rights Agreement, dated as of September 8, 2025, among Churchill Capital Corp X, a Delaware corporation (“PubCo”) to be renamed Infleqtion, Inc. upon the Effective Date and the other persons party thereto (the “A&R Registration Rights Agreement”); and
WHEREAS, Transferee is required, at the time of and as a condition to such Transfer, to become a party to the A&R Registration Rights Agreement by executing and delivering this Joinder, whereupon such Transferee will be treated as a Party (with the same rights and obligations as the Transferor) for all purposes of the A&R Registration Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Definitions. To the extent capitalized words used in this Joinder are not defined in this Joinder, such words shall have the respective meanings set forth in the A&R Registration Rights Agreement.
Section 2. Acquisition. The Transferor hereby Transfers to the Transferee all of the Acquired Interests.
Section 3. Joinder. Transferee hereby acknowledges and agrees that (a) such Transferee has received and read the A&R Registration Rights Agreement, (b) such Transferee is acquiring the Acquired Interests in accordance with and subject to the terms and conditions of the A&R Registration Rights Agreement and (c) such Transferee will be treated as a Party (with the same rights and obligations as the Transferor) for all purposes of the A&R Registration Rights Agreement.
Section 4. Notice. Any notice, demand or other communication under the A&R Registration Rights Agreement to Transferee shall be given to Transferee at the address set forth on the signature page hereto in accordance with Section 4.6 of the A&R Registration Rights Agreement.
Section 5. Governing Law. This Joinder shall be governed by and construed in accordance with the law of the State of Delaware.
Section 6. Counterparts; Electronic Delivery. This Joinder may be executed and delivered in one or more counterparts, by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Joinder or any document to be signed in connection with this Joinder shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by the parties as of the date first above written.
| TRANSFEROR: |
|---|
| [____] |
| By: |
| Name: [____] |
| Title: [____] |
| Email: |
| --- |
| Mailing Address: |
| --- |
| TRANSFEREE: |
| --- |
| [____] |
| By: |
| Name: [____] |
| Title: [____] |
| Email: |
| --- |
| Mailing Address: |
| --- |
Signature Page to Joinder to Amended and Restated Registration Rights Agreement
EX-10.9
Exhibit 10.9
INFLEQTION, INC.
2026 EQUITY INCENTIVE PLAN
Adopted by the Board of Directors: February 13, 2026
Approved by the Stockholders: February 12, 2026
1. GENERAL.
(a) Plan Purpose. The Company, by means of the Plan, seeks to secure and retain the services of Employees, Directors and Consultants, to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Awards.
(b) Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) SARs; (iv) Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and (vii) Other Awards.
(c) Adoption Date; Effective Date. The Plan will come into existence on the Adoption Date, but no Award may be granted prior to the Effective Date.
2. SHARES SUBJECT TO THE PLAN.
(a) Share Reserve. Subject to adjustment in accordance with Section 2(c) and any adjustments as necessary to implement any Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards will not exceed 33,419,882 shares of Common Stock. In addition, subject to any adjustments as necessary to implement any Capitalization Adjustments, such aggregate number of shares of Common Stock will automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2027 and ending on (and including) January 1, 2036, in an amount equal to 5% of the total number of shares of Common Stock outstanding on December 31 of the preceding year; provided, however, that the Board may act prior to January 1^st^ of a given year to provide that the increase for such year will be a lesser number of shares of Common Stock.
(b) AggregateIncentive Stock Option Limit. Notwithstanding anything to the contrary in Section 2(a) and subject to any adjustments as necessary to implement any Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options is 100,259,646 shares (equal to three hundred percent (300% of the total number of shares of Common Stock initially reserved for issuance under Section 2(a)).
(c) Share Reserve Operation.
(i) Limit Applies to Common Stock Issued Pursuant to Awards. For clarity, the Share Reserve is a limit on the number of shares of Common Stock that may be issued pursuant to Awards and does not limit the granting of Awards, except that the Company must have available the number of shares of Common Stock necessary to satisfy its obligations to issue shares of Common Stock pursuant to such Awards. Shares of Common Stock may be issued in connection with a merger or acquisition as permitted by, as applicable, Nasdaq Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, NYSE American Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares of Common Stock available for issuance under the Plan.
(ii) Actions that Do Not Constitute Issuance of Common Stock and Do Not Reduce ShareReserve. The following actions do not result in an issuance of shares of Common Stock under the Plan and accordingly do not reduce the number of shares of Common Stock subject to the Share Reserve and available for issuance under the Plan: (1) the expiration or termination of any portion of an Award without the shares of Common Stock covered by such portion of the Award having been issued; (2) the settlement of any portion of an Award in cash (i.e., the Participant receives cash rather than shares of Common Stock); (3) the withholding of shares of Common Stock that would otherwise be issued by the Company to satisfy the exercise, strike or purchase price of an Award; or (4) the withholding of shares of Common Stock that would otherwise be issued by the Company to satisfy a tax withholding obligation in connection with an Award.
(iii) Reversion of Previously Issued Shares of Common Stock to Share Reserve. The following shares of Common Stock previously issued pursuant to an Award and accordingly initially deducted from the Share Reserve will be added back to the Share Reserve and again become available for issuance under the Plan: (1) any shares of Common Stock that are forfeited back to or repurchased by the Company because of a failure to meet a contingency or condition required for the vesting of such shares of Common Stock, and (2) any shares of Common Stock that are reacquired by the Company to satisfy the exercise, strike or purchase price of an Award, and (3) any shares of Common Stock that are reacquired by the Company to satisfy a tax withholding obligation in connection with an Award.
3. ELIGIBILITY AND LIMITATIONS.
(a) Eligible Award Recipients. Subject to the terms of the Plan, Employees, Directors and Consultants are eligible to receive Awards.
(b) Specific Award Limitations.
(i) Limitations on Incentive Stock Option Recipients. Incentive Stock Options may be granted only to Employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and (f) of the Code).
(ii) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).
(iii) Limitationson Incentive Stock Options Granted to Ten Percent Stockholders. A Ten Percent Stockholder may not be granted an Incentive Stock Option unless (1) the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant of such Option and (2) the Option is not exercisable after the expiration of five years from the date of grant of such Option.
(iv) Limitations on Nonstatutory Stock Options and SARs. Nonstatutory Stock Options and SARs may not be granted to Employees, Directors and Consultants unless the shares of Common Stock underlying such Awards is treated as “service recipient stock” under Section 409A or unless such Awards otherwise comply with the requirements of Section 409A.
(c) Aggregate Incentive Stock Option Limit. The aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options is the number of shares of Common Stock specified in Section 2(b).
(d) Non-Employee Director Compensation Limit. The aggregate value of all compensation granted or paid, as applicable, to any individual for service as a Non-Employee Director with respect to any period commencing on the date of the Company’s Annual Meeting of Stockholders for a particular year and ending on the day immediately prior to the date of the Company’s Annual Meeting of Stockholders for the next subsequent year (the “Annual Period”), including Awards granted and cash fees paid by the Company to such Non-Employee Director, will not exceed (1) $750,000 in total value or (2) in the event such Non-Employee Director is first appointed or elected to the Board during such Annual Period, $1,000,000 in total value, in each case, calculating the value of any equity awards based on the grant date fair value of such equity awards for financial reporting purposes. The limitations in this Section 3(d) shall apply commencing with the Annual Period that begins on the Company’s first Annual Meeting of Stockholders following the Effective Date.
4.OPTIONS AND STOCK APPRECIATION RIGHTS.
Each Option and SAR will have such terms and conditions as determined by the Board. Each Option will be designated in writing as an Incentive Stock Option or Nonstatutory Stock Option at the time of grant; provided, however, that if an Option is not so designated or if an Option designated as an Incentive Stock Option fails to qualify as an Incentive Stock Option, then such Option will be a Nonstatutory Stock Option, and the shares of Common Stock purchased upon exercise of each type of Option will be separately accounted for. Each SAR will be denominated in shares of Common Stock equivalents. The terms and conditions of separate Options and SARs need not be identical; provided, however, that each Option Agreement and SAR Agreement will conform (through incorporation of provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(a) Term. Subject to Section 3(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten years from the date of grant of such Award or such shorter period specified in the Award Agreement.
(b) Exercise or Strike Price. Subject to Section 3(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will not be less than 100% of the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value on the date of grant of such Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Sections 409A and, if applicable, 424(a) of the Code.
(c) Exercise Procedure and Payment of Exercise Price for Options. In order to exercise an Option, the Participant must provide notice of exercise to the Plan Administrator in accordance with the procedures specified in the Option Agreement or otherwise provided by the Company. The Board has the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The exercise price of an Option may be paid, to the extent permitted by Applicable Law and as determined by the Board, by one or more of the following methods of payment to the extent set forth in the Option Agreement:
( i ) **** by cash or check, bank draft or money order payable to the Company;
(ii) pursuant to a “cashless exercise” program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the Common Stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the exercise price to the Company from the sales proceeds;
(iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock that are already owned by the Participant free and clear of any liens, claims, encumbrances or security interests, with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) at the time of exercise the Common Stock is publicly traded, (2) any remaining balance of the exercise price not satisfied by such delivery is paid by the Participant in cash or other permitted form of payment, (3) such delivery would not violate any Applicable Law or agreement restricting the redemption of the Common Stock, (4) any certificated shares of Common Stock are endorsed or accompanied by an executed assignment separate from certificate, and (5) such shares of Common Stock have been held by the Participant for any minimum period necessary to avoid adverse accounting treatment as a result of such delivery;
(iv) if the Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares of Common Stock with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) such shares of Common Stock used to pay the exercise price will not be exercisable thereafter and (2) any remaining balance of the exercise price not satisfied by such net exercise is paid by the Participant in cash or other permitted form of payment; or
(v) in any other form of consideration that may be acceptable to the Board and permissible under Applicable Law.
(d) ExerciseProcedure and Payment of Appreciation Distribution for SARs. In order to exercise any SAR, the Participant must provide notice of exercise to the Plan Administrator in accordance with the SAR Agreement. The appreciation distribution payable to a Participant upon the exercise of a SAR will not be greater than an amount equal to the excess of (i) the aggregate Fair Market Value on the date of exercise of a number of shares of Common Stock equal to the number of Common Stock equivalents that are vested and being exercised under such SAR, over (ii) the strike price of such SAR. Such appreciation distribution may be paid to the Participant in the form of Common Stock or cash (or any combination of Common Stock and cash) or in any other form of payment, as determined by the Board and specified in the SAR Agreement.
(e) Transferability. Options and SARs may not be transferred to third party financial institutions for value. The Board may impose such additional limitations on the transferability of an Option or SAR as it determines. In the absence of any such determination by the Board, the following restrictions on the transferability of Options and SARs will apply, provided that except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration and provided, further, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer:
(i) Restrictions on Transfer. An Option or SAR will not be transferable, except by will or by the laws of descent and distribution, and will be exercisable during the lifetime of the Participant only by the Participant; provided, however, that the Board may permit transfer of an Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participant’s request, including to a trust if the Participant is considered to be the sole beneficial owner of such trust (as determined under Section 671 of the Code and applicable state law) while such Option or SAR is held in such trust, provided that the Participant and the trustee enter into a transfer and other agreements required by the Company.
(ii) Domestic Relations Orders. Notwithstanding the foregoing, subject to the execution of transfer documentation in a format acceptable to the Company and subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to a domestic relations order.
(f) Vesting. The Board may impose such restrictions on or conditions to the vesting and/or exercisability of an Option or SAR as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Options and SARs will cease upon termination of the Participant’s Continuous Service.
(g) Termination of Continuous Service for Cause. Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s Options and SARs will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising any portion (including any vested portion) of such Awards on and after the date of such termination of Continuous Service and the Participant will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the forfeited Award, or any consideration in respect of the forfeited Award.
(h) Post-Termination Exercise Period Following Termination of Continuous Service for Reasons Other than Cause. Subject to Section 4(i), if a Participant’s Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or her Option or SAR to the extent vested, but only within the following period of time or, if applicable, such other period of time provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate; provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 4(a)):
(i) three months following the date of such termination if such termination is a termination without Cause (other than any termination due to Participant’s Disability or death);
(ii) 12 months following the date of such termination if such termination is due to the Participant’s Disability;
(iii) 18 months following the date of such termination if such termination is due to the Participant’s death; or
(iv) 18 months following the date of the Participant’s death if such death occurs following the date of such termination but during the period such Award is otherwise exercisable (as provided in (i) or (ii) above).
Following the date of such termination, to the extent the Participant does not exercise such Award within the applicable Post-Termination Exercise Period (or, if earlier, prior to the expiration of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant will have no further right, title or interest in the terminated Award, the shares of Common Stock subject to the terminated Award, or any consideration in respect of the terminated Award.
(i) Restrictions on Exercise; Extension of Exercisability. A Participant may not exercise an Option or SAR at any time that the issuance of shares of Common Stock upon such exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason other than for Cause and, at any time during the last thirty days of the applicable Post-Termination Exercise Period: (i) the exercise of the Participant’s Option or SAR would be prohibited solely because the issuance of shares of Common Stock upon such exercise would violate Applicable Law, or (ii) the immediate sale of any shares of Common Stock issued upon such exercise would violate the Company’s Trading Policy, then the applicable Post-Termination Exercise Period will be extended to the last day of the calendar month that commences following the date the Award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum permitted number of extensions); provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 4(a)).
(j) Non-Exempt Employees. No Option or SAR, whether or not vested, granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, will be first exercisable for any shares of Common Stock until at least six months following the date of grant of such Award. Notwithstanding the foregoing, in accordance with the provisions of the Worker Economic Opportunity Act, any vested portion of such Award may be exercised earlier than six months following the date of grant of such Award in the event of (i) such Participant’s death or Disability, (ii) a Corporate Transaction in which such Award is not assumed, continued or substituted, (iii) a Change in Control, or (iv) such Participant’s retirement (as such term may be defined in the Award Agreement or another applicable agreement or, in the absence of any such definition, in accordance with the Company’s then current employment policies and guidelines). This Section 4(j) is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.
(k) Whole Shares. Options and SARs may be exercised only with respect to whole shares of Common Stock or their equivalents.
5. AWARDS OTHER THAN OPTIONSAND STOCK APPRECIATION RIGHTS.
(a) Restricted Stock Awards andRSU Awards. Each Restricted Stock Award and RSU Award will have such terms and conditions as determined by the Board; provided, however, that each Restricted Stock Award Agreement and RSU Award Agreement will conform (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(i) Formof Award.
(1) **** Restricted Stock Awards: To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock subject to a Restricted Stock Award may be (A) held in book entry form subject to the Company’s instructions until such shares of Common Stock become vested or any other restrictions lapse, or (B) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. Unless otherwise set forth in an Award Agreement, a Participant will have voting and other rights as a stockholder of the Company with respect to any shares of Common Stock subject to a Restricted Stock Award.
(2) RSU Awards: An RSU Award represents a Participant’s right to be issued on a future date the number of shares of Common Stock that is equal to the number of restricted stock units subject to the RSU Award. As a holder of an RSU Award, a Participant is an unsecured creditor of the Company with respect to the Company’s unfunded obligation, if any, to issue shares of Common Stock in settlement of such Award and nothing contained in the Plan or any RSU Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between a Participant and the Company or an Affiliate or any other person. A Participant will not have voting or any other rights as a stockholder of the Company with respect to any RSU Award (unless and until shares of Common Stock are actually issued in settlement of a vested RSU Award).
(ii)Consideration.
(1) Restricted Stock Awards: A Restricted Stock Award may be granted in consideration for (A) cash or check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of consideration (including future services) **** as the Board may determine and permissible under Applicable Law.
(2) RSU Awards: Unless otherwise determined by the Board at the time of grant, an RSU Award will be granted in consideration for the Participant’s services to the Company or an Affiliate, such that the Participant will not be required to make any payment to the Company (other than such services) with respect to the grant or vesting of the RSU Award, or the issuance of any shares of Common Stock pursuant to the RSU Award. If, at the time of grant, the Board determines that any consideration must be paid by the Participant (in a form other than the Participant’s services to the Company or an Affiliate) upon the issuance of any shares of Common Stock in settlement of the RSU Award, such consideration may be paid in any form of consideration as the Board may determine and permissible under Applicable Law.
(iii) Vesting. The Board may impose such restrictions on or conditions to the vesting of a Restricted Stock Award or RSU Award as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Restricted Stock Awards and RSU Awards will cease upon termination of the Participant’s Continuous Service.
(iv) Termination of Continuous Service. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason, (1) the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant under his or her Restricted Stock Award that have not vested as of the date of such termination as set forth in the Restricted Stock Award Agreement and the Participant will have no further right, title or interest in the Restricted Stock Award, the shares of Common Stock subject to the Restricted Stock Award, or any consideration in respect of the Restricted Stock Award and (2) any portion of his or her RSU Award that has not vested will be forfeited upon such termination and the Participant will have no further right, title or interest in the RSU Award, the shares of Common Stock issuable pursuant to the RSU Award, or any consideration in respect of the RSU Award.
(v) Dividends and Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any shares of Common Stock subject to a Restricted Stock Award or RSU Award, as determined by the Board and specified in the Award Agreement.
(vi) Settlement of RSU Awards. An RSU Award may be settled by the issuance of shares of Common Stock or in any form of cash payment (or any combination thereof), as determined by the Board and specified in the RSU Award Agreement. At the time of grant, the Board may determine to impose such restrictions or conditions that delay such delivery to a date following the vesting of the RSU Award.
(b) Performance Awards. With respect to any Performance Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, the other terms and conditions of such Award, and the measure of whether and to what degree such Performance Goals have been attained will be determined by the Board.
(c) Other Awards. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof may be granted either alone or in addition to Awards provided for under Section 4 and the preceding provisions of this Section 5. Subject to the provisions of the Plan, the Board will have sole and complete discretion to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Awards and all other terms and conditions of such Other Awards.
6. ADJUSTMENTS UPON CHANGES INCOMMON STOCK; OTHER CORPORATE EVENTS.
(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately adjust: (i) the class(es) and maximum number of shares of Common Stock subject to the Plan, and the maximum number of shares of Common Stock by which the Share Reserve may annually increase pursuant to Section 2(a); (ii) the class(es) and maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 2(a); and (iii) the class(es) and number of securities and exercise price, strike price or purchase price of Common Stock subject to outstanding Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. Notwithstanding the foregoing, no fractional shares of Common Stock or rights for fractional shares of Common Stock shall be created in order to implement any Capitalization Adjustment. The Board shall determine an appropriate equivalent benefit, if any, for any fractional shares of Common Stock or rights to fractional shares of Common Stock that might be created by the adjustments referred to in the preceding provisions of this Section.
(b) Dissolution or Liquidation. Except as otherwise provided in the 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 of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock 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 Continuous Service, provided, however, that the Board may determine to 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.
(c) Corporate Transaction. The following provisions will apply to Awards in the event of a Corporate Transaction except as set forth in Section 11 unless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award.
(i) Awards May Be Assumed. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Awards outstanding under the Plan or may substitute similar awards for Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to Awards may be assigned by the Company to the successor of the Company (or the successor’s parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its parent) may choose to assume or continue only a portion of an Award or substitute a similar award for only a portion of an Award, or may choose to assume or continue the Awards held by some, but not all Participants. The terms of any assumption, continuation or substitution will be set by the Board.
(ii) Awards Held by Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the “Current Participants”), the vesting of such Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Awards may be exercised) will **** be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the Corporate Transaction) as the Board determines (or, if the Board does not determine such a date, to the date that is five days prior to the effective time of the Corporate Transaction), and such Awards will terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Awards will lapse (contingent upon the effectiveness of the Corporate Transaction). With respect to the vesting of Performance Awards that will accelerate upon the occurrence of a Corporate
Transaction pursuant to this subsection (ii) and that have multiple vesting levels depending on the level of performance, unless otherwise provided in the Award Agreement, the vesting of such Performance Awards will accelerate at 100% of the target level upon the occurrence of the Corporate Transaction in which the Awards are not assumed in accordance with Section 6(c)(i). With respect to the vesting of Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and are settled in the form of a cash payment, such cash payment will be made no later than 30 days following the occurrence of the Corporate Transaction or such later date as required to comply with Section 409A of the Code.
(iii) Awards Held by Persons other than CurrentParticipants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to outstanding Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, such outstanding Awards will terminate if not exercised (if applicable) prior to the occurrence of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Awards will not terminate and may continue to be exercised notwithstanding the Corporate Transaction.
(iv) Payment for Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event an Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Award may not exercise such Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time, to the excess, if any, of (1) the value of the property the Participant would have received upon the exercise of the Award (including, at the discretion of the Board, any unvested portion of such Award), over (2) any exercise price payable by such holder in connection with such exercise.
(d) Appointment of StockholderRepresentative. As a condition to the receipt of an Award under this Plan, a Participant will be deemed to have agreed that the Award will be subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on the Participant’s behalf with respect to any escrow, indemnities and any contingent consideration.
(e) No Restriction on Right to Undertake Transactions. The grant of any Award under the Plan and the issuance of shares of Common Stock pursuant to any Award does not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, rights or options to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
7. ADMINISTRATION.
(a) Administration by Board. The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in subsection (c) below.
(b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To determine from time to time (1) which of the persons eligible under the Plan will be granted Awards; (2) when and how each Award will be granted; (3) what type or combination of types of Award will be granted; (4) the provisions of each Award granted (which need not be identical), including the time or times when a person will be permitted to receive an issuance of Common Stock or other payment pursuant to an Award; (5) the number of shares of Common Stock or cash equivalent with respect to which an Award will be granted to each such person; (6) the Fair Market Value applicable to an Award; and (7) the terms of any Performance Award that is not valued in whole or in part by reference to, or otherwise based on, the Common Stock, including the amount of cash payment or other property that may be earned and the timing of payment.
(ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a manner and to the extent it deems necessary or expedient to make the Plan or Award fully effective.
(iii) To settle all controversies regarding the Plan and Awards granted under it.
(iv) To accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest, notwithstanding the provisions in the Award Agreement stating the time at which it may first be exercised or the time during which it will vest.
(v) **** To prohibit the exercise of any Option, SAR or other exercisable Award during a period of up to 30 days prior to the consummation of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock including any Corporate Transaction, for reasons of administrative convenience.
(vi) To suspend or terminate the Plan at any time. Suspension or termination of the Plan will not Materially Impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant.
(vii) **** To amend the Plan in any respect the Board deems necessary or advisable; provided, however*,* that stockholder approval will be required for any amendment to the extent such stockholder approval is required by Applicable Law. Except as provided above, rights under any Award granted before amendment of the Plan will not be Materially Impaired by any amendment of the Plan except with the written consent of the affected Participant.
(viii) To submit any amendment to the Plan for stockholder approval.
(ix) To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; providedhowever, that, a Participant’s rights under any Award will not be Materially Impaired by any such amendment except with the written consent of the affected Participant.
(x) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Awards.
(xi) To adopt such procedures and sub-plans as are necessary or appropriate to permit and facilitate participation in the Plan by, or take advantage of specific tax treatment for Awards granted to, Employees, Directors or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement to ensure or facilitate compliance with the laws of the relevant foreign jurisdiction).
(xii) To effect, at any time and from time to time, subject to the consent of any Participant whose Award is Materially Impaired by such action, (1) the reduction of the exercise price (or strike price) of any outstanding Option or SAR; (2) the cancellation of any outstanding Option or SAR and the grant in substitution therefor of (A) a new Option, SAR, Restricted Stock Award, RSU Award or Other Award, under the Plan or another equity plan of the Company, covering the same or a different number of shares of Common Stock, (B) cash and/or (C) other valuable consideration (as determined by the Board); or (3) any other action that is treated as a repricing under generally accepted accounting principles.
(c) Delegation toCommittee.
(i) General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to another Committee or a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Each Committee may retain the authority to concurrently administer the Plan with Committee or subcommittee to which it has delegated its authority hereunder and may, at any time, revest in such Committee some or all of the powers previously delegated. The Board may retain the authority to concurrently administer the Plan with any Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
(ii) Rule 16b-3Compliance. To the extent an Award is intended to qualify for the exemption from Section 16(b) of the Exchange Act that is available under Rule 16b-3 of the Exchange Act, the Award will be granted by the Board or a Committee that consists solely of two or more Non-Employee Directors, as determined under Rule 16b-3(b)(3) of the Exchange Act and thereafter any action establishing or modifying the terms of the Award will be approved by the Board or a Committee meeting such requirements to the extent necessary for such exemption to remain available.
(d) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board or any Committee in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
(e) Delegation to an Officer. The Board or any Committee may delegate to one or more Officers the authority to do one or both of the following (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by Applicable Law, other types of Awards) and, to the extent permitted by Applicable Law, the terms thereof, and (ii) determine the number of shares of Common Stock to be subject to such Awards granted to such Employees; provided, however, that the resolutions or charter adopted by the Board or any Committee evidencing such delegation will specify the total number of shares of Common Stock that may be subject to the Awards granted by such Officer and that such Officer may not grant an Award to himself or herself. Any such Awards will be granted on the applicable form of Award Agreement most recently approved for use by the Board or the Committee, unless otherwise provided in the resolutions approving the delegation authority. Notwithstanding anything to the contrary herein, neither the Board nor any Committee may delegate to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) the authority to determine the Fair Market Value.
8. TAX WITHHOLDING
(a) Withholding Authorization. As a condition to acceptance of any Award under the Plan, a Participant authorizes withholding from payroll and any other amounts payable to such Participant, and otherwise agrees to make adequate provision for (including), any sums required to satisfy any U.S. federal, state, local and/or foreign tax or social insurance contribution withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise, vesting or settlement of such Award, as applicable. Accordingly, a Participant may not be able to exercise an Award even though the Award is vested, and the Company shall have no obligation to issue shares of Common Stock subject to an Award, unless and until such obligations are satisfied.
(b) Satisfaction of Withholding Obligation. To the extent permitted by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any U.S. federal, state, local and/or foreign tax or social insurance withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; (v) by allowing a Participant to effectuate a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; or (vi) by such other method as may be set forth in the Award Agreement.
(c) No Obligation to Notify or Minimize Taxes; NoLiability to Claims. Except as required by Applicable Law, the Company has no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Award. Furthermore, the Company has 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 and will not be liable to any holder of an Award for any adverse tax consequences to such holder in connection with an Award. As a condition to accepting an Award under the Plan, each Participant (i) agrees to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from such Award or other Company compensation and (ii) acknowledges that such Participant was advised to consult with his or her own personal tax, financial and other legal advisors regarding the tax consequences of the Award and has either done so or knowingly and voluntarily declined to do so. Additionally,
each Participant acknowledges any Option or SAR granted under the Plan is exempt from Section 409A only if the exercise or strike price is at least equal to the “fair market value” of the Common Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral of compensation associated with the Award. Additionally, as a condition to accepting an Option or SAR granted under the Plan, each Participant agrees not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that such exercise price or strike price is less than the “fair market value” of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service.
(d) Withholding Indemnification. As a condition to accepting an Award under the Plan, in the event that the amount of the Company’s and/or its Affiliate’s withholding obligation in connection with such Award was greater than the amount actually withheld by the Company and/or its Affiliates, each Participant agrees to indemnify and hold the Company and/or its Affiliates harmless from any failure by the Company and/or its Affiliates to withhold the proper amount.
9. MISCELLANEOUS.
(a) Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares of Common Stock repurchased by the Company on the open market or otherwise.
(b) Use of Proceeds from Sales ofCommon Stock. Proceeds from the sale of shares of Common Stock pursuant to Awards will constitute general funds of the Company.
(c) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action approving the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.
(d) Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until (i) such Participant has satisfied all requirements for exercise of the Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to such Award is reflected in the records of the Company.
(e) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or affect the right of the Company or an Affiliate to terminate at will and without regard to any future vesting opportunity that a Participant may have with respect to any Award (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director
pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state or foreign jurisdiction in which the Company or the Affiliate is incorporated, as the case may be. Further, nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award will constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or service or confer any right or benefit under the Award or the Plan unless such right or benefit has specifically accrued under the terms of the Award Agreement and/or Plan.
(f) Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board may determine, to the extent permitted by Applicable Law, to (i) make a corresponding reduction in the number of shares of Common Stock 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 (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.
(g) Execution of Additional Documents. As a condition to accepting an Award under the Plan, the Participant agrees to execute any additional documents or instruments necessary or desirable, as determined in the Plan Administrator’s sole discretion, to carry out the purposes or intent of the Award, or facilitate compliance with securities and/or other regulatory requirements, in each case at the Plan Administrator’s request.
(h) Electronic Delivery and Participation. Any reference herein or in an Award Agreement to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access). By accepting any Award the Participant consents to receive documents by electronic delivery and to participate in the Plan through any on-line electronic system established and maintained by the Plan Administrator or another third party selected by the Plan Administrator. The form of delivery of any Common Stock (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.
( i ) Clawback /Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that is adopted by the Company, including any policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a Participant’s right to voluntarily terminate employment upon a “resignation for good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company.
(j) Securities Law Compliance. A Participant will not be issued any shares of Common Stock in respect of an Award unless either (i) the shares of Common Stock are registered under the Securities Act; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Each Award also must comply with other Applicable Law governing the Award, and a Participant will not receive such shares of Common Stock if the Company determines that such receipt would not be in material compliance with Applicable Law.
(k) Transfer or Assignment of Awards; Issued Shares. Except as expressly provided in the Plan or the form of Award Agreement, Awards granted under the Plan may not be transferred or assigned by the Participant. After the vested shares of Common Stock subject to an Award have been issued, or in the case of Restricted Stock and similar awards, after the issued shares of Common Stock have vested, the holder of such shares of Common Stock is free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such shares of Common Stock provided that any such actions are in compliance with the provisions herein, the terms of the Trading Policy and Applicable Law.
(l) Effect on Other Employee Benefit Plans. The value of any Award granted under the Plan, as determined upon grant, vesting or settlement, shall not be included as compensation, earnings, salaries, or other similar terms used when calculating any Participant’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.
(m) Deferrals. To the extent permitted by Applicable Law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may also establish programs and procedures for deferral elections to be made by Participants. Deferrals will be made in accordance with the requirements of Section 409A.
(n) Section 409A. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A, and, to the extent not so exempt, in compliance with the requirements of Section 409A. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A is a “specified employee” for purposes of Section 409A, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A without regard to alternative definitions thereunder) will be issued or paid before the date that is six months and one day following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.
(o) CHOICE OF LAW. This Plan and any controversy arising out of or relating to this Plan shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of any law other than the law of the State of Delaware.
10. COVENANTS OF THE COMPANY.
(a) Compliance with Law. The Company will seek to obtain from each regulatory commission or agency, as may be deemed to be necessary, having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise or vesting of the Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary or advisable for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise or vesting of such Awards unless and until such authority is obtained. A Participant is not eligible for the grant of an Award or the subsequent issuance of Common Stock pursuant to the Award if such grant or issuance would be in violation of any Applicable Law.
11. ADDITIONAL RULES FOR AWARDS SUBJECT TOSECTION 409A.
(a) Application. Unless the provisions of this Section of the Plan are expressly superseded by the provisions in the form of Award Agreement, the provisions of this Section shall apply and shall supersede anything to the contrary set forth in the Award Agreement for a Non-Exempt Award.
(b) Non-Exempt Awards Subject to Non-ExemptSeverance Arrangements. To the extent a Non-Exempt Award is subject to Section 409A due to application of a Non-Exempt Severance Arrangement, the following provisions of this subsection (b) apply.
(i) If the Non-Exempt Award vests in the ordinary course during the Participant’s Continuous Service in accordance with the vesting schedule set forth in the Award Agreement, and does not accelerate vesting under the terms of a Non-Exempt Severance Arrangement, in no event will the shares of Common Stock be issued in respect of such Non-Exempt Award any later than the later of: (i) December 31^st^ of the calendar year that includes the applicable vesting date, or (ii) the 60^th^ day that follows the applicable vesting date.
(ii) If vesting of the Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with the Participant’s Separation from Service, and such vesting acceleration provisions were in effect as of the date of grant of the Non-Exempt Award and, therefore, are part of the terms of such Non-Exempt Award as of the date of grant, then the shares of Common Stock will be earlier issued in settlement of such Non-Exempt Award upon the Participant’s Separation from Service in accordance with the terms of the Non-Exempt Severance Arrangement, but in no event later than the 60^th^ day that follows the date of the Participant’s Separation from Service. However, if at the time the shares of Common Stock would otherwise be issued the Participant is subject to the distribution limitations contained in Section 409A applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares of Common Stock shall not be issued before the date that is six months following the date of such Participant’s Separation from Service, or, if earlier, the date of the Participant’s death that occurs within such six month period.
(iii) If vesting of a Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with a Participant’s Separation from Service, and such vesting acceleration provisions were not in effect as of the date of grant of the Non-Exempt Award and, therefore, are not a part of the terms of such Non-Exempt Award on the date of grant, then such acceleration of vesting of the Non-Exempt Award shall not accelerate the issuance date of the shares of Common Stock, but the shares of Common Stock shall instead be issued on the same schedule as set forth in the Grant Notice as if they had vested in the ordinary course during the Participant’s Continuous Service, notwithstanding the vesting acceleration of the Non-Exempt Award. Such issuance schedule is intended to satisfy the requirements of payment on a specified date or pursuant to a fixed schedule, as provided under Treasury Regulations Section 1.409A-3(a)(4).
(c) Treatment of Non-Exempt Awards Upon a Corporate Transaction for Employees andConsultants. The provisions of this subsection (c) shall apply and shall supersede anything to the contrary set forth in the Plan with respect to the permitted treatment of any Non-Exempt Award in connection with a Corporate Transaction if the Participant was either an Employee or Consultant upon the applicable date of grant of the Non-Exempt Award.
(i) Vested Non-Exempt Awards. The following provisions shall apply to any Vested Non-Exempt Award in connection with a Corporate Transaction:
(1) If the Corporate Transaction is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue or substitute the Vested Non-Exempt Award. Upon the Section 409A Change in Control, the settlement of the Vested Non-Exempt Award will automatically be accelerated and the shares of Common Stock will be immediately issued in respect of the Vested Non-Exempt Award. Alternatively, the Company may instead provide that the Participant will receive a cash settlement equal to the Fair Market Value of the shares of Common Stock that would otherwise be issued to the Participant upon the Section 409A Change in Control.
(2) If the Corporate Transaction is not also a Section 409A Change in Control, then the Acquiring Entity must either assume, continue or substitute each Vested Non-Exempt Award. The shares of Common Stock to be issued in respect of the Vested Non-Exempt Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares of Common Stock would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares of Common Stock, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares of Common Stock that would otherwise be issued to the Participant on such issuance dates, with the determination of the Fair Market Value of the shares of Common Stock made on the date of the Corporate Transaction.
(ii) Unvested Non-Exempt Awards. The following provisions shall apply to any Unvested Non-Exempt Award unless otherwise determined by the Board pursuant to subsection (e) of this Section.
(1) In the event of a Corporate Transaction, the Acquiring Entity shall assume, continue or substitute any Unvested Non-Exempt Award. Unless otherwise determined by the Board, any Unvested Non-Exempt Award will remain subject to the same vesting and forfeiture restrictions that were applicable to the Award prior to the Corporate Transaction. The shares of Common Stock to be issued in respect of any Unvested Non-Exempt Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares of Common Stock would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares of Common Stock, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares of Common Stock that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value of the shares of Common Stock made on the date of the Corporate Transaction.
**(2)**If the Acquiring Entity will not assume, substitute or continue any Unvested Non-Exempt Award in connection with a Corporate Transaction, then such Award shall automatically terminate and be forfeited upon the Corporate Transaction with no consideration payable to any Participant in respect of such forfeited Unvested Non-Exempt Award. Notwithstanding the foregoing, to the extent permitted and in compliance with the requirements of Section 409A, the Board may in its discretion determine to elect to accelerate the vesting and settlement of the Unvested Non-Exempt Award upon the Corporate Transaction, or instead substitute a cash payment equal to the Fair Market Value of such shares of Common Stock that would otherwise be issued to the Participant, as further provided in subsection (e)(ii) below. In the absence of such discretionary election by the Board, any Unvested Non-Exempt Award shall be forfeited without payment of any consideration to the affected Participants if the Acquiring Entity will not assume, substitute or continue the Unvested Non-Exempt Awards in connection with the Corporate Transaction.
(3) The foregoing treatment shall apply with respect to all Unvested Non-Exempt Awards upon any Corporate Transaction, and regardless of whether or not such Corporate Transaction is also a Section 409A Change in Control.
(d) Treatment of Non-Exempt Awards Upon a Corporate Transaction for Non-Employee Directors. The following provisions of this subsection (d) shall apply and shall supersede anything to the contrary that may be set forth in the Plan with respect to the permitted treatment of a Non-Exempt Director Award in connection with a Corporate Transaction.
(i) If the Corporate Transaction is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue or substitute the Non-Exempt Director Award. Upon the Section 409A Change in Control the vesting and settlement of any Non-Exempt Director Award will automatically be accelerated and the shares of Common Stock will be immediately issued to the Participant in respect of the Non-Exempt Director Award. Alternatively, the Company may provide that the Participant will instead receive a cash settlement equal to the Fair Market Value of the shares of Common Stock that would otherwise be issued to the Participant upon the Section 409A Change in Control pursuant to the preceding provision.
(ii) If the Corporate Transaction is not also a Section 409A Change in Control, then the Acquiring Entity must either assume, continue or substitute the Non-Exempt Director Award. Unless otherwise determined by the Board, the Non-Exempt Director Award will remain subject to the same vesting and forfeiture restrictions that were applicable to the Award prior to the Corporate Transaction. The shares of Common Stock to be issued in respect of the Non-Exempt Director Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares of Common Stock would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares of Common Stock, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares of Common Stock that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value made on the date of the Corporate Transaction.
(e) If the RSU Award is a Non-Exempt Award, then the provisions in this Section 11(e) shall apply and supersede anything to the contrary that may be set forth in the Plan or the Award Agreement with respect to the permitted treatment of such Non-Exempt Award:
(i) Any exercise by the Board of discretion to accelerate the vesting of a Non-Exempt Award shall not result in any acceleration of the scheduled issuance dates for the shares of Common Stock in respect of the Non-Exempt Award unless the earlier issuance of the shares of Common Stock upon the applicable vesting dates would be in compliance with the requirements of Section 409A.
(ii) The Company explicitly reserves the right to earlier settle any Non-Exempt Award to the extent permitted and in compliance with the requirements of Section 409A, including pursuant to any of the exemptions available in Treasury Regulations Section 1.409A-3(j)(4)(ix).
(iii) To the extent the terms of any Non-Exempt Award provide that it will be settled upon a Change in Control or Corporate Transaction, to the extent it is required for compliance with the requirements of Section 409A, the Change in Control or Corporate Transaction event triggering settlement must also constitute a Section 409A Change in Control. To the extent the terms of a Non-Exempt Award provides that it will be settled upon a termination of employment or termination of Continuous Service, to the extent it is required for compliance with the requirements of Section 409A, the termination event triggering settlement must also constitute a Separation From Service. However, if at the time the shares of Common Stock would otherwise be issued to a Participant in connection with a “separation from service” such Participant is subject to the distribution limitations contained in Section 409A applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares of Common Stock shall not be issued before the date that is six months following the date of the Participant’s Separation From Service, or, if earlier, the date of the Participant’s death that occurs within such six month period.
(iv) The provisions in this subsection (e) for delivery of the shares of Common Stock in respect of the settlement of an RSU Award that is a Non-Exempt Award are intended to comply with the requirements of Section 409A so that the delivery of the shares of Common Stock to the Participant in respect of such Non-Exempt Award will not trigger the additional tax imposed under Section 409A, and any ambiguities herein will be so interpreted.
12. SEVERABILITY.
If all or any part of the Plan or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any Section of the Plan or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
13. TERMINATION OF THE PLAN.
The Board may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of the earlier of: (i) the Adoption Date, or (ii) the date the Plan is approved by the Company’s stockholders. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
14. DEFINITIONS.
As used in the Plan, the following definitions apply to the capitalized terms indicated below:
(a) “AcquiringEntity” means the surviving or acquiring corporation (or its parent company) in connection with a Corporate Transaction.
(b) “Adoption Date” means the date the Plan is first approved by the Board or Compensation Committee.
(c) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
(d) “Applicable Law” means any applicable securities, federal, state, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (including under the authority of any applicable self-regulating organization such as the Nasdaq Stock Market, New York Stock Exchange, or the Financial Industry Regulatory Authority).
(e) “Award” means any right to receive Common Stock, cash or other property granted under the Plan (including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, an RSU Award, a SAR, a Performance Award or any Other Award).
(f) “Award Agreement” means a written or electronic agreement between the Company and a Participant evidencing the terms and conditions of an Award. The Award Agreement generally consists of the Grant Notice and the agreement containing the written summary of the general terms and conditions applicable to the Award and which is provided, including through electronic means, to a Participant along with the Grant Notice.
(g) “Board” means the Board of Directors of the Company (or its designee). Any decision or determination made by the Board shall be a decision or determination that is made in the sole discretion of the Board (or its designee), and such decision or determination shall be final and binding on all Participants.
(h) *“*Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Award after the date the Plan is adopted by the Board without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(i) “Cause” **** has the meaning ascribed to such term in any written agreement between a Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) the Participant’s dishonest statements or acts with respect to the Company or any Affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business; (ii) the Participant’s commission, attempted commission, or conviction (including a guilty plea or plea of nolo contendere) of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) the Participant’s failure to perform the Participant’s assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues, in the reasonable judgment of the Company, after written notice given to the Participant by the Company; (iv) the Participant’s gross negligence, willful misconduct or insubordination with respect to the Company or any Affiliate of the Company; (v) intentional damage by Participant to any property of the Company or any Affiliate of the Company; (vi) Participant’s misconduct that causes, or is reasonably anticipated to cause, harm to the Company or its business, reputation, or personnel; (vii) the Participant’s material violation of any provision of any agreement(s) between the Participant and the Company, including (without limitation) agreements relating to noncompetition, nonsolicitation, nondisclosure and/or assignment of inventions; (viii) the Participant’s loss of Participant’s eligibility to perform Continuous Service in the Participant’s designated work jurisdiction; or (viii) conduct by Participant that demonstrates gross unfitness to serve. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Board in its discretion with respect to Participants who are executive officers of the Company and by the Company’s Chief Executive Officer in his/her discretion with respect to Participants who are not executive officers of the Company. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will be final and binding and have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.
(j) “Change in Control” or “Change of Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;
(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the Acquiring Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the Acquiring Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(iii) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or
(iv) individuals who, on the date the Plan is adopted by the Board, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply, and (C) with respect to any nonqualified deferred compensation that becomes payable on account of the Change in Control, the transaction or event described in clause (i), (ii), (iii), or (iv) also constitutes a Section 409A Change in Control if required in order for the payment not to violate Section 409A of the Code.
The consummation of the transactions contemplated by the Merger Agreement shall not constitute a Change in Control under the Plan.
(k) “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(l) “Committee” means the Compensation Committee and any other committee of one or more Directors to whom authority has been delegated by the Board or Compensation Committee in accordance with the Plan.
(m) “Common Stock” means the common stock, par value $0.0001 per share, of the Company.
(n) “Company” means Infleqtion, Inc., a Delaware corporation.
(o) “Compensation Committee” means the Compensation Committee of the Board.
(p) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person.
(q) “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however*,* that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law. In addition, to the extent required for exemption from or compliance with Section 409A, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).
(r) “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i) a sale **** or other disposition of all or substantially all, as determined by the Board, of the consolidated assets of the Company and its Subsidiaries;
(ii) a sale or other disposition of at least 50% of the outstanding securities of the Company;
(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Corporate Transaction shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, (B) the definition of Corporate Transaction (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Corporate Transaction or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply, and (C) with respect to any nonqualified deferred compensation that becomes payable on account of the Corporate Transaction, the transaction or event described in clause (i), (ii), (iii), or (iv) also constitutes a Section 409A Change in Control if required in order for the payment not to violate Section 409A of the Code.
The consummation of the transactions contemplated by the Merger Agreement shall not constitute a Corporate Transaction under the Plan.
(s) “Director” means a member of the Board.
(t) “determine” or “determined” **** means as determined by the Board or the Committee (or its designee) in its sole discretion.
(u) “Disability” means, with respect to a Participant, such Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Section 22(e)(3) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(v) “Effective Date” means the effective date of this Plan, which is the date of the closing of the transactions contemplated by the Merger Agreement, provided that this Plan is approved by the Company’s stockholders prior to such date.
(w) “Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.
(x) “Employer” means the Company or the Affiliate of the Company that employs the Participant.
(y) “Entity” means a corporation, partnership, limited liability company or other entity.
(z) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(aa) “Exchange Act Person” **** means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.
(bb) “FairMarket Value” means, as of any date, unless otherwise determined by the Board, the value of the Common Stock (as determined on a per share or aggregate basis, as applicable) determined as follows:
(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.
(ii) If there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.
(iii) **** In the absence of such markets for the Common Stock, or if otherwise determined by the Board, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(cc) “Governmental Body” means any: (i) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (ii) federal, state, local, municipal, foreign or other government; (iii) governmental or regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance of doubt, any Tax authority) or other body exercising similar powers or authority; or (iv) self-regulatory organization (including the Nasdaq Stock Market, New York Stock Exchange, and the Financial Industry Regulatory Authority).
(dd) “Grant Notice” means the notice provided to a Participant that he or she has been granted an Award under the Plan and which includes the name of the Participant, the type of Award, the date of grant of the Award, number of shares of Common Stock subject to the Award or potential cash payment right, (if any), the vesting schedule for the Award (if any) and other key terms applicable to the Award.
(ee) “Incentive Stock Option” means an option granted pursuant to Section 4 of the Plan that is intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.
(ff) “Materially Impair” **** means any amendment to the terms of the Award that materially adversely affects the Participant’s rights under the Award. A Participant’s rights under an Award will not be deemed to have been Materially Impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights. For example, the following types of amendments to the terms of an Award do not Materially Impair the Participant’s rights under the Award: (i) imposition of reasonable restrictions on the minimum number of shares subject to an Option or SAR that may be exercised, (ii) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (iii) to change the terms of an Incentive Stock Option in a manner that disqualifies, impairs or otherwise affects the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (iv) to clarify the manner of exemption from, or to bring the Award into compliance with or qualify it for an exemption from, Section 409A,or (v) to comply with other Applicable Laws.
(gg) “Merger Agreement” means the Agreement and Plan of Merger and Reorganization by and among Churchill Capital Corp X, AH Merger Sub I, Inc., AH Merger Sub II, LLC, and ColdQuanta, Inc., dated as of September 8, 2025.
(hh) “Non-Employee Director” **** means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.
(ii) “Non-Exempt Award” **** means any Award that is subject to, and not exempt from, Section 409A, including as the result of (i) a deferral of the issuance of the shares of Common Stock subject to the Award which is elected by the Participant or imposed by the Company, or (ii) the terms of any Non-Exempt Severance Agreement.
(jj) “Non-Exempt Director Award” means a Non-Exempt Award granted to a Participant who was a Director but not an Employee on the applicable grant date.
(kk) “Non-Exempt Severance Arrangement” means a severance arrangement or other agreement between the Participant and the Company that provides for acceleration of vesting of an Award and issuance of the shares of Common Stock in respect of such Award upon the Participant’s termination of employment or separation from service (as such term is defined in Section 409A(a)(2)(A)(i) of the Code (and without regard to any alternative definition thereunder) (“Separation from Service”) and such severance benefit does not satisfy the requirements for an exemption from application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(4), 1.409A-1(b)(9) or otherwise.
(ll) “Nonstatutory Stock Option” means any option granted pursuant to Section 4 of the Plan that does not qualify as an Incentive Stock Option.
(mm) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.
(nn) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.
(oo) “Option Agreement” means a written or electronic agreement between the Company and the Optionholder evidencing the terms and conditions of the Option grant. The Option Agreement includes the Grant Notice for the Option and the agreement containing the written summary of the general terms and conditions applicable to the Option and which is provided, including through electronic means, to a Participant along with the Grant Notice. Each Option Agreement will be subject to the terms and conditions of the Plan.
(pp) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
(qq) “Other Award” means an award valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value at the time of grant) that is not an Incentive Stock Option, Nonstatutory Stock Option, SAR, Restricted Stock Award, RSU Award or Performance Award.
(rr) “Other Award Agreement” **** means a written or electronic agreement between the Company and a holder of an Other Award evidencing the terms and conditions of an Other Award grant. Each Other Award Agreement will be subject to the terms and conditions of the Plan.
(ss) “Own,”****“Owned,” **** “Owner,” **** “Ownership” **** means that a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(tt) “Participant” means an Employee, Director or Consultant to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
(uu) “Performance Award” means an Award that may vest or may be exercised or a cash award that may vest or become earned and paid contingent upon the attainment during a Performance Period of certain Performance Goals and which is granted under the terms and conditions of Section 5(b) pursuant to such terms as are approved by the Board. In addition, to the extent permitted by Applicable Law and set forth in the applicable Award Agreement, the Board may determine that cash or other property may be used in payment of Performance Awards. Performance Awards that are settled in cash or other property are not required to be valued in whole or in part by reference to, or otherwise based on, the Common Stock.
(vv) “Performance Criteria” means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the Board: earnings (including earnings per share and net earnings); earnings before interest, taxes and depreciation; earnings before interest, taxes, depreciation and amortization; total stockholder return; return on equity or average stockholder’s equity; return on assets, investment, or capital employed; stock price; margin (including gross margin); income (before or after taxes); operating income; operating income after taxes; pre-tax profit; operating cash flow; sales or revenue targets; increases in revenue or product revenue; expenses and cost reduction goals; improvement in or attainment of working capital levels; economic value added (or an equivalent metric); market share; cash flow; cash flow per share; share price performance; debt reduction; customer satisfaction; stockholders’ equity; capital expenditures; debt levels; operating profit or net operating profit; workforce diversity;
growth of net income or operating income; billings; financing; regulatory milestones; stockholder liquidity; corporate governance and compliance; intellectual property; personnel matters; progress of internal research; progress of partnered programs; partner satisfaction; budget management; partner or collaborator achievements; internal controls, including those related to the Sarbanes-Oxley Act of 2002; investor relations, analysts and communication; implementation or completion of projects or processes; employee retention; number of users, including unique users; strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property); establishing relationships with respect to the marketing, distribution and sale of the Company’s products; supply chain achievements; co-development, co-marketing, profit sharing, joint venture or other similar arrangements; individual performance goals; corporate development and planning goals; and other measures of performance selected by the Board or Committee whether or not listed herein.
(ww) “PerformanceGoals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board will appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles. In addition, the Board may establish or provide for other adjustment items in the Award Agreement at the time the Award is granted or in such other document setting forth the Performance Goals at the time the Performance Goals are established. In addition, the Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Award Agreement or the written terms of a Performance Award.
(xx) “Performance Period” means the period of time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to vesting or exercise of an Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.
(yy) “Plan” means this Infleqtion, Inc. 2026 Equity Incentive Plan, as amended from time to time.
(zz) “Plan Administrator” means the person, persons, and/or third-party administrator designated by the Company to administer the day to day operations of the Plan and the Company’s other equity incentive programs.
( aaa ) “Post-Termination Exercise Period” means the period following termination of a Participant’s Continuous Service within which an Option or SAR is exercisable, as described in Section 4(h).
(bbb) “Restricted Stock Award” or “RSA” means an Award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
(ccc) “Restricted Stock Award Agreement” means a written or electronic agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. The Restricted Stock Award Agreement includes the Grant Notice for the Restricted Stock Award and the agreement containing the written summary of the general terms and conditions applicable to the Restricted Stock Award and which is provided, including by electronic means, to a Participant along with the Grant Notice. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.
(ddd) “RSU Award” or “RSU” **** means an Award of restricted stock units representing the right to receive an issuance of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
( eee ) “RSU Award Agreement” **** means a written or electronic agreement between the Company and a holder of an RSU Award evidencing the terms and conditions of an RSU Award. The RSU Award Agreement includes the Grant Notice for the RSU Award and the agreement containing the written summary of the general terms and conditions applicable to the RSU Award and which is provided, including by electronic means, to a Participant along with the Grant Notice. Each RSU Award Agreement will be subject to the terms and conditions of the Plan.
(fff) “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.
(ggg) “Rule 405” means Rule 405 promulgated under the Securities Act.
(hhh) “Section 409A” means Section 409A of the Code and the regulations and other guidance thereunder.
(iii) “Section 409A Change in Control” means a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
(jjj) “Securities Act” means the Securities Act of 1933, as amended.
(kkk) “ShareReserve” means the number of shares of Common Stock available for issuance under the Plan as set forth in Section 2(a).
(lll) “Stock Appreciation Right” or “SAR” **** means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 4.
(mmm) “SAR Agreement” means a written or electronic agreement between the Company and a holder of a SAR evidencing the terms and conditions of a SAR grant. The SAR Agreement includes the Grant Notice for the SAR and the agreement containing the written summary of the general terms and conditions applicable to the SAR and which is provided, including by electronic means, to a Participant along with the Grant Notice. Each SAR Agreement will be subject to the terms and conditions of the Plan.
(nnn) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
(ooo) “TenPercent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
(ppp) “Trading Policy” means the Company’s policy permitting certain individuals to sell shares of Common Stock only during certain “window” periods and/or otherwise restricts the ability of certain individuals to transfer or encumber shares of Common Stock, as in effect from time to time.
(qqq) “Unvested Non-Exempt Award” means the portion of any Non-Exempt Award that had not vested in accordance with its terms upon or prior to the date of any Corporate Transaction.
(rrr) “Vested Non-Exempt Award” means the portion of any Non-Exempt Award that had vested in accordance with its terms upon or prior to the date of a Corporate Transaction.
Infleqtion, Inc.
Stock Option Grant Notice
(2026 Equity Incentive Plan)
Infleqtion, Inc. (the “Company”), pursuant to the Company’s 2026 Equity Incentive Plan (the “Plan”), has granted to you (“Optionholder”) an option to purchase the number of shares of the Common Stock set forth below (the “Option”). Your Option is subject to all of the terms and conditions as set forth herein and in the Plan, and the Stock Option Agreement and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Stock Option Agreement shall have the meanings set forth in the Plan or the Stock Option Agreement, as applicable.
| Optionholder: | |
|---|---|
| Date of Grant: | |
| Vesting Commencement Date: | |
| Number of Shares of Common Stock Subject to Option: | |
| Exercise Price (Per Share): | |
| Total Exercise Price: | |
| Expiration Date: | |
| Type of Grant: | [Incentive Stock Option] OR [Nonstatutory Stock Option] |
| --- | --- |
| Exercise and | |
| Vesting Schedule: | Subject to the Optionholder’s Continuous Service through each applicable vesting date, the Option will vest as follows: |
| [_________________________________________________________] |
Optionholder Acknowledgements: By your signature below or by electronic acceptance or authentication in a form authorized by the Company, you understand and agree that:
| • | The Option is governed by this Stock Option Grant Notice (this “Grant Notice”), and the<br>provisions of the Plan and the Stock Option Agreement and the Notice of Exercise, all of which are made a part of this document. Unless otherwise provided in the Plan, this Grant Notice and the Stock Option Agreement (together, the<br>“Option Agreement”) may not be modified, amended or revised except in a writing signed by you and a duly authorized officer of the Company. | ||
|---|---|---|---|
| • | [If the Option is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options granted to you)<br>cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.]^1^<br> | ||
| --- | --- | ||
| • | You consent to receive this Grant Notice, the Stock Option Agreement, the Plan, the Prospectus and any other<br>Plan-related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.<br> | ||
| --- | --- | ||
| ^1^ | If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first<br>exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option. | ||
| --- | --- | ||
| • | You have read and are familiar with the provisions of the Plan, the Stock Option Agreement, the Notice of<br>Exercise and the Prospectus. In the event of any conflict between the provisions in this Grant Notice, the Stock Option Agreement, the Notice of Exercise, or the Prospectus and the terms of the Plan, the terms of the Plan shall control.<br> | ||
| --- | --- | ||
| • | The Option Agreement sets forth the entire understanding between you and the Company regarding the acquisition of<br>Common Stock and supersedes all prior oral and written agreements, promises and/or representations on that subject with the exception of other equity awards previously granted to you and any written employment agreement, offer letter, severance<br>agreement, written severance plan or policy, or other written agreement between the Company and you in each case that specifies the terms that should govern this Option. | ||
| --- | --- | ||
| • | Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying<br>with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for<br>all purposes. | ||
| --- | --- | ||
| INFLEQTION, INC. | OPTIONHOLDER: | ||
| --- | --- | --- | --- |
| By: | |||
| Signature | Signature | ||
| Title: | Date: | ||
| Date: |
ATTACHMENTS: Stock Option Agreement, 2026 Equity Incentive Plan, Notice of Exercise, Prospectus
Attachment I
Infleqtion, Inc.
StockOption Agreement
(2026 Equity Incentive Plan)
As reflected by your Stock Option Grant Notice (“Grant Notice”), Infleqtion, Inc. (the “Company”) has granted you an option under the Company’s 2026 Equity Incentive Plan (the “Plan”) to purchase a number of shares of Common Stock at the exercise price indicated in your Grant Notice (the “Option”). Capitalized terms not explicitly defined in this Agreement but defined in the Grant Notice or the Plan shall have the meanings set forth in the Grant Notice or Plan, as applicable. The terms of your Option as specified in the Grant Notice and this Stock Option Agreement constitute your Option Agreement.
The general terms and conditions applicable to your Option are as follows:
1. **GOVERNING PLAN DOCUMENT.**Your Option is subject to all the provisions of the Plan, including but not limited to the provisions in:
a. Section 6 regarding the impact of a Capitalization Adjustment, dissolution, liquidation, or Corporate Transaction on your Option;
b. Section 9(e) regarding the Company’s retained rights to terminate your Continuous Service notwithstanding the grant of the Option; and
c. Section 8 regarding the tax consequences of your Option.
Your Option is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the Option Agreement and the provisions of the Plan, the provisions of the Plan shall control.
2. VESTING. Your Option will vest as provided in your Grant Notice, subject to the provisions contained herein and the terms of the Plan. Vesting will cease upon the termination of your Continuous Service.
3. EXERCISE.
a. You may generally exercise the vested portion of your Option for whole shares of Common Stock at any time during its term by delivery of payment of the exercise price and applicable withholding taxes and other required documentation to the Plan Administrator in accordance with the exercise procedures established by the Plan Administrator, which may include an electronic submission. Please review Sections 4(i), 4(j) and 7(b)(v) of the Plan, which may restrict or prohibit your ability to exercise your Option during certain periods.
b. To the extent permitted by Applicable Law, you may pay your Option exercise price as follows:
1) cash, check, bank draft or money order;
2) subject to Company and/or Committee consent at the time of exercise, pursuant to a “cashless exercise” program as further described in Section 4(c)(ii) of the Plan if at the time of exercise the Common Stock is publicly traded;
3) subject to Company and/or Committee consent at the time of exercise, by delivery of previously owned shares of Common Stock as further described in Section 4(c)(iii) of the Plan; or
4) subject to Company and/or Committee consent at the time of exercise, if the Option is a Nonstatutory Stock Option, by a “net exercise” arrangement as further described in Section 4(c)(iv) of the Plan.
4. TERM. You may not exercise your Option before the commencement of its term or after its term expires. The term of your Option commences on the Date of Grant and expires upon the earliest of the following:
a. immediately upon the termination of your Continuous Service for Cause;
b. three months after the termination of your Continuous Service for any reason other than Cause, Disability or death;
c. 12 months after the termination of your Continuous Service due to your Disability;
d. 18 months after your death if you die during your Continuous Service;
e. immediately upon a Corporate Transaction if the Board has determined that the Option will terminate in connection with a Corporate Transaction;
f. the Expiration Date indicated in your Grant Notice; or
g. the day before the 10th anniversary of the Date of Grant.
Notwithstanding the foregoing, if you die during the period provided in Section 4.b or 4.c above, the term of your Option shall not expire until the earlier of (i) 18 months after your death, (ii) upon any termination of the Option in connection with a Corporate Transaction, (iii) the Expiration Date indicated in your Grant Notice, or (iv) the day before the tenth anniversary of the Date of Grant. Additionally, the Post-Termination Exercise Period of your Option may be extended as provided in Section 4(i) of the Plan.
To obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the date of grant of your Option and ending on the day three months before the date of your Option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. If the Company provides for the extended exercisability of your Option under certain circumstances for your benefit, your Option will not necessarily be treated as an Incentive Stock Option if you exercise your Option more than three months after the date your employment terminates.
5. WITHHOLDING OBLIGATIONS. As further provided in Section 8 of the Plan: (a) you may not exercise your Option unless the applicable tax withholding obligations are satisfied; and (b) at the time you exercise your Option, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations, if any, which arise in connection with the exercise of your Option in accordance with the withholding procedures established by the Company. Accordingly, you may not be able to exercise your Option even though the Option is vested, and the Company shall have no obligation to issue shares of Common Stock subject to your Option, unless and until such obligations are satisfied. In the event that the amount of the Company’s withholding obligation in connection with your Option was greater than the amount actually withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount.
6. INCENTIVE STOCK OPTION DISPOSITION REQUIREMENT. If your Option is an Incentive Stock Option, you must notify the Company in writing within 15 days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your Option that occurs within two years after the date of your Option grant or within one year after such shares of Common Stock are transferred upon exercise of your Option.
7. TRANSFERABILITY. Except as otherwise provided in Section 4(e) of the Plan, your Option is not transferable, except by will or by the applicable laws of descent and distribution, and is exercisable during your life only by you.
8. CORPORATE TRANSACTION. Your Option is subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration.
9. NO LIABILITY FORTAXES**.** As a condition to accepting the Option, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the Option or other Company compensation and (b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the Option and have either done so or knowingly and voluntarily declined to do so. Additionally, you acknowledge that the Option is exempt from Section 409A only if the exercise price is at least equal to the “fair market value” of the Common Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral of compensation associated with the Option. Additionally, as a condition to accepting the Option, you agree not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that such exercise is less than the “fair market value” of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service.
10. SEVERABILITY**.** If any part of this Option Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Option Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
11. OTHER DOCUMENTS. You hereby acknowledge receipt of or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Trading Policy.
12. QUESTIONS. If you have questions regarding these or any other terms and conditions applicable to your Option, including a summary of the applicable federal income tax consequences please see the Prospectus.
* * * *
Attachment II
2026 Equity Incentive Plan
Attachment III
Infleqtion, Inc.
Noticeof Exercise
(2026 Equity Incentive Plan)
Infleqtion, Inc.
[ADDRESS] Date of Exercise: _______________
This constitutes notice to Infleqtion, Inc. (the “Company”) that I elect to purchase the below number of shares of Common Stock of the Company (the “Shares”) by exercising my Option for the price set forth below. Capitalized terms not explicitly defined in this Notice of Exercise but defined in the Stock Option Grant Notice, Stock Option Agreement or 2026 Equity Incentive Plan (the “Plan”) shall have the meanings set forth in the Stock Option Grant Notice, Stock Option Agreement or Plan, as applicable. Use of certain payment methods is subject to Company and/or Committee consent and certain additional requirements set forth in the Stock Option Agreement and the Plan.
| Type of option (check one): | Incentive ☐ |
|---|---|
| Date of Grant: | |
| Number of Shares as to which Option is exercised: | |
| Certificates to be issued in name of: | |
| Total exercise price: | |
| Cash, check, bank draft or money order delivered herewith: | |
| Value of ________ Shares delivered herewith: | |
| Regulation T Program (cashless exercise): | |
| Value of _______ Shares pursuant to net exercise: |
All values are in US Dollars.
By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the Plan, (ii) to satisfy the tax withholding obligations, if any, relating to
the exercise of this Option as set forth in the Stock Option Agreement, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within 15 days after the date of any disposition of any of the Shares issued upon exercise of this Option that occurs within two years after the Date of Grant or within one year after such Shares are issued upon exercise of this Option.
| Very truly yours, |
|---|
Attachment IV
Prospectus
Infleqtion, Inc.
RSU Award Grant Notice
(2026 Equity Incentive Plan)
Infleqtion, Inc. (the “Company”) has awarded to you (the “Participant”) the number of restricted stock units specified and on the terms set forth below in consideration of your services (the “RSUAward”). Your RSU Award is subject to all of the terms and conditions as set forth herein and in the Company’s 2026 Equity Incentive Plan (the “Plan”) and the Award Agreement (the “Agreement”), which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Agreement shall have the meanings set forth in the Plan or the Agreement.
| Participant: | |
|---|---|
| Date of Grant: | |
| Vesting Commencement Date: | |
| Number of Restricted Stock Units: | |
| Vesting Schedule: | [_________________________________________________________]. |
| Notwithstanding the foregoing, vesting shall terminate upon the Participant’s termination of Continuous Service. |
Issuance Schedule: One share of Common Stock will be issued at the time set forth in Section 23 of the Agreement for each restricted stock unit which vests.
Participant Acknowledgements: By your signature below or by electronic acceptance or authentication in a form authorized by the Company, you understand and agree that:
| • | The RSU Award is governed by this RSU Award Grant Notice (the “Grant Notice”), and the<br>provisions of the Plan and the Agreement, all of which are made a part of this document. Unless otherwise provided in the Plan, this Grant Notice and the Agreement (together, the “RSU Award Agreement”) may not be modified,<br>amended or revised except in a writing signed by you and a duly authorized officer of the Company. | ||
|---|---|---|---|
| • | You consent to receive this Grant Notice, the Agreement, the Plan, the Prospectus and any other Plan-related<br>documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.<br> | ||
| --- | --- | ||
| • | You have read and are familiar with the provisions of the Plan, the RSU Award Agreement and the Prospectus. In<br>the event of any conflict between the provisions in the RSU Award Agreement, or the Prospectus and the terms of the Plan, the terms of the Plan shall control. | ||
| --- | --- | ||
| • | The RSU Award Agreement sets forth the entire understanding between you and the Company regarding the acquisition<br>of Common Stock and supersedes all prior oral and written agreements, promises and/or representations on that subject with the exception of: (i) other equity awards previously granted to you, and (ii) any written employment agreement,<br>offer letter, severance agreement, written severance plan or policy, or other written agreement between the Company and you in each case that specifies the terms that should govern this RSU Award. | ||
| --- | --- | ||
| INFLEQTION, INC. | PARTICIPANT: | ||
| --- | --- | --- | --- |
| By: | |||
| Signature | Signature | ||
| Title: | Date: | ||
| Date: |
ATTACHMENTS**:** RSU Award Agreement, 2026 Equity Incentive Plan, Prospectus
ATTACHMENT I
INFLEQTION, INC.
AWARD AGREEMENT
(2026 EQUITY INCENTIVE PLAN)
As reflected by your RSU Award Grant Notice (“Grant Notice”), Infleqtion, Inc. (the “Company”) has granted you a RSU Award under the Company’s 2026 Equity Incentive Plan (the “Plan”) for the number of restricted stock units as indicated in your Grant Notice (the “RSU Award”). The terms of your RSU Award as specified in this Award Agreement for your RSU Award (this “Agreement”) and the Grant Notice constitute your “RSU AwardAgreement.” Defined terms not explicitly defined in this Agreement but defined in the Grant Notice or the Plan shall have the same definitions as in the Grant Notice or Plan, as applicable.
The general terms applicable to your RSU Award are as follows:
13. GOVERNING PLAN DOCUMENT. Your RSU Award is subject to all the provisions of the Plan, including but not limited to the provisions in:
a. Section 6 of the Plan regarding the impact of a Capitalization Adjustment, dissolution, liquidation, or Corporate Transaction on your RSU Award;
b. Section 9(e) of the Plan regarding the Company’s retained rights to terminate your Continuous Service notwithstanding the grant of the RSU Award; and
c. Section 8 of the Plan regarding the tax consequences of your RSU Award.
Your RSU Award is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the RSU Award Agreement and the provisions of the Plan, the provisions of the Plan shall control.
14. GRANT OF THE RSU AWARD. This RSU Award represents your right to be issued on a future date the number of shares of the Company’s Common Stock that is equal to the number of restricted stock units indicated in the Grant Notice as modified to reflect any Capitalization Adjustment and subject to your satisfaction of the vesting conditions set forth therein (the “Restricted Stock Units”). Any additional Restricted Stock Units that become subject to the RSU Award pursuant to Capitalization Adjustments as set forth in the Plan and the provisions of Section 21 below, if any, shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Restricted Stock Units covered by your RSU Award.
15. VESTING. Your Restricted Stock Units will vest in accordance with the vesting schedule provided in the Grant Notice, subject to the provisions contained herein and the terms of the Plan. Vesting will cease upon the termination of your Continuous Service.
16. DIVIDENDS. You shall receive no benefit or adjustment to this RSU Award with respect to any cash dividend, stock dividend or other distribution that does not result from a Capitalization Adjustment; provided, however, that this sentence will not apply with respect to any shares of Common Stock that are delivered to you in connection with your RSU Award after such shares have been delivered to you.
17. WITHHOLDING OBLIGATIONS. As further provided in Section 8 of the Plan, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations, if any, which arise in connection with your RSU Award (the “Withholding Obligation”) in accordance with the withholding procedures established by the Company. Unless the Withholding Obligation is satisfied, the Company shall have no obligation to deliver to you any Common Stock in respect of the RSU Award. In the event the Withholding Obligation of the Company arises prior to the delivery to you of Common Stock or it is determined after the delivery of Common Stock to you that the amount of the Withholding Obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount. The manner in which the Withholding Obligation is satisfied shall be determined by the Company in its sole and absolute discretion.
18. DATE OF ISSUANCE.
a. The issuance of shares in respect of the Restricted Stock Units is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner. Subject to the satisfaction of the Withholding Obligation, if any, in the event one or more Restricted Stock Units vests, the Company shall issue to you one (1) share of Common Stock for each Restricted Stock Unit that vests on the applicable vesting date(s) (subject to any adjustment under Section 21 above, and subject to any different provisions in the Grant Notice). Each issuance date determined by this paragraph is referred to as an “Original Issuance Date.”
b. If the Original Issuance Date falls on a date that is not a business day, delivery shall instead occur on the next following business day. In addition, if:
1) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market (including but not limited to under a previously established written trading plan that meets the requirements of Rule 10b5-1 under the Exchange Act and was entered into in compliance with the Company’s policies (a “10b5-1 Arrangement”)), and
2) either (1) a Withholding Obligation does not apply, or (2) the Company decides, prior to the Original Issuance Date, (A) not to satisfy the Withholding Obligation by withholding shares of Common Stock from the shares otherwise due, on the Original Issuance Date, to you under this Award, and (B) not to permit you to enter into a “same day sale” commitment with a broker-dealer (including but not limited to a commitment under a 10b5-1 Arrangement) and (C) not to permit you to pay your Withholding Obligation in cash,
then the shares that would otherwise be issued to you on the Original Issuance Date will not be delivered on such Original Issuance Date and will instead be delivered on the first business day when you are not prohibited from selling shares of the Company’s Common Stock in the open public market, but in no event later than December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance
Date occurs), or, if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the shares of Common Stock under this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).
c. To the extent the RSU Award is a Non-Exempt RSU Award, the provisions of Section 11 of the Plan shall apply.
19. TRANSFERABILITY. Except as otherwise provided in the Plan, your RSU Award is not transferable, except by will or by the applicable laws of descent and distribution.
20. CORPORATE TRANSACTION. Your RSU Award is subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration.
21. NO LIABILITY FORTAXES**.** As a condition to accepting the RSU Award, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the RSU Award or other Company compensation and (b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the RSU Award and have either done so or knowingly and voluntarily declined to do so.
22. SEVERABILITY**.**If any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
23. OTHER DOCUMENTS. You hereby acknowledge receipt of or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Trading Policy.
24. QUESTIONS. If you have questions regarding these or any other terms and conditions applicable to your RSU Award, including a summary of the applicable federal income tax consequences please see the Prospectus.
ATTACHMENT II
2026 EQUITY INCENTIVE PLAN
ATTACHMENT III
PROSPECTUS
EX-10.10
Exhibit 10.10
INFLEQTION, INC.
2026 EMPLOYEE STOCK PURCHASE PLAN
Adopted by the Board of Directors: February 13, 2026
Approved by the Stockholders: February 12, 2026
1. GENERAL; PURPOSE.
(a) The Plan provides a means by which Eligible Employees of the Company and certain Designated Companies may be given an opportunity to purchase shares of Common Stock. The Plan permits the Company to grant a series of Purchase Rights to Eligible Employees under an Employee Stock Purchase Plan. In addition, the Plan permits the Company to grant a series of Purchase Rights to Eligible Employees that do not meet the requirements of an Employee Stock Purchase Plan.
(b) The Plan includes two components: a 423 Component and a Non-423 Component. The Company intends (but makes no undertaking or representation to maintain) the 423 Component to qualify as an Employee Stock Purchase Plan. The provisions of the 423 Component, accordingly, will be construed in a manner that is consistent with the requirements of Section 423 of the Code. Except as otherwise provided in the Plan or determined by the Board, the Non-423 Component will operate and be administered in the same manner as the 423 Component.
(c) The Company, by means of the Plan, seeks to retain the services of Eligible Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Related Corporations.
2. ADMINISTRATION.
(a) The Board or the Committee will administer the Plan. References herein to the Board shall be deemed to refer to the Committee except where context dictates otherwise.
(b) The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To determine how and when Purchase Rights will be granted and the provisions of each Offering (which need not be identical).
(ii) To designate from time to time (A) which Related Corporations will be eligible to participate in the Plan as Designated 423 Corporations, (B) which Related Corporations or Affiliates will be eligible to participate in the Plan as Designated Non-423 Corporations, and (C) which Designated Companies will participate in each separate Offering (to the extent that the Company makes separate Offerings).
(iii) To construe and interpret the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it deems necessary or expedient to make the Plan fully effective.
1
(iv) To settle all controversies regarding the Plan and Purchase Rights granted under the Plan.
(v) To suspend or terminate the Plan at any time as provided in Section 12.
(vi) To amend the Plan at any time as provided in Section 12.
(vii) Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Related Corporations and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan with respect to the 423 Component.
(viii) To adopt such rules, procedures and sub-plans as are necessary or appropriate to permit or facilitate participation in the Plan by Employees who are foreign nationals or employed or located outside the United States. Without limiting the generality of, and consistent with, the foregoing, the Board specifically is authorized to adopt rules, procedures, and sub-plans regarding, without limitation, eligibility to participate in the Plan, the definition of eligible “earnings,” handling and making of Contributions, establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of share issuances, any of which may vary according to applicable requirements, and which, if applicable to a Designated Non-423 Corporation, do not have to comply with the requirements of Section 423 of the Code.
(c) The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Further, to the extent not prohibited by Applicable Law, the Board or Committee may, from time to time, delegate some or all of its authority under the Plan to one or more officers of the Company or other persons or groups of persons as it deems necessary, appropriate or advisable under conditions or limitations that it may set at or after the time of the delegation. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. Whether or not the Board has delegated administration of the Plan to a Committee, the Board will have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.
(d) All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
3.SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the maximum number of shares of Common Stock that may be issued under the Plan will not exceed 5,141,520 shares of Common Stock, plus the number of shares of Common Stock that are automatically added on January 1^st^ of each year for a period of ten years commencing on
2
January 1, 2027 and ending on (and including) January 1, 2036, in an amount equal to the lesser of (i) 1% of the total number of shares of Common Stock outstanding on December 31^st^ of the preceding calendar year, and (ii) 7,000,000 shares of Common Stock. Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year to provide that there will be no January 1^st^ increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. For the avoidance of doubt, up to the maximum number of shares of Common Stock reserved under this Section 3(a) may be used to satisfy purchases of Common Stock under the 423 Component and any remaining portion of such maximum number of shares may be used to satisfy purchases of Common Stock under the Non-423 Component.
(b) If any Purchase Right granted under the Plan terminates without having been exercised in full, the shares of Common Stock not purchased under such Purchase Right will again become available for issuance under the Plan.
(c) The stock purchasable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares of Common Stock repurchased by the Company on the open market.
4.GRANT OF PURCHASE RIGHTS; OFFERING.
(a) The Board may from time to time grant or provide for the grant of Purchase Rights to Eligible Employees under an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each Offering will be in such form and will contain such terms and conditions as the Board will deem appropriate, and, with respect to the 423 Component, will comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights will have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering will include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering will be effective, which period will not exceed 27 months beginning with the Offering Date, and the substance of the provisions contained in Sections 5 through 8, inclusive.
(b) If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in forms delivered to the Company or a third party designated by the Company (each, a “Company Designee”): (i) each form will apply to all of his or her Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) will be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) will be exercised.
(c) The Board will have the discretion to structure an Offering so that if the Fair Market Value of a share of Common Stock on the first Trading Day of a new Purchase Period within that Offering is less than or equal to the Fair Market Value of a share of Common Stock on the Offering Date for that Offering, then (i) that Offering will terminate immediately as of that first Trading Day, and (ii) the Participants in such terminated Offering will be automatically enrolled in a new Offering beginning on the first Trading Day of such new Purchase Period.
3
5. ELIGIBILITY.
(a) Purchase Rights may be granted only to Employees of the Company or, as the Board may designate in accordance with Section 2(b), to Employees of a Related Corporation or an Affiliate. Except as provided in Section 5(b) or as required by Applicable Law, an Employee will not be eligible to be granted Purchase Rights unless, on the Offering Date, the Employee has been in the employ of the Company or the Related Corporation or an Affiliate, as the case may be, for such continuous period preceding such Offering Date as the Board may require, but in no event will the required period of continuous employment be equal to or greater than two years. In addition, the Board may (unless prohibited by Applicable Law) provide that no Employee will be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary employment with the Company, the Related Corporation, or the Affiliate is more than 20 hours per week and more than five months per calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code with respect to the 423 Component. The Board may also exclude from participation in the Plan or any Offering Employees who are “highly compensated employees” (within the meaning of Section 423(b)(4)(D) of the Code) of the Company or a Related Corporation or a subset of such highly compensated employees.
(b) The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right will thereafter be deemed to be a part of that Offering. Such Purchase Right will have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that:
(i) the date on which such Purchase Right is granted will be the “Offering Date” of such Purchase Right for all purposes, including determination of the exercise price of such Purchase Right;
(ii) the period of the Offering with respect to such Purchase Right will begin on its Offering Date and end coincident with the end of such Offering; and
(iii) the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Purchase Right under that Offering.
(c) No Employee will be eligible for the grant of any Purchase Rights under the 423 Component if, immediately after any such Purchase Rights are granted, such Employee owns stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or of any Related Corporation. For purposes of this Section 5(c), the rules of Section 424(d) of the Code will apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding Purchase Rights and options will be treated as stock owned by such Employee.
(d) As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights under the 423 Component only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Related Corporations, do not permit such Eligible Employee’s rights to purchase stock of the Company or any Related Corporation to accrue at a rate which, when aggregated, exceeds US $25,000 of Fair Market Value of such stock (determined at the time such rights are granted, and which, with respect to the Plan, will be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time.
4
(e) Officers of the Company and any Designated Company, if they are otherwise Eligible Employees, will be eligible to participate in Offerings under the Plan. Notwithstanding the foregoing, the Board may (unless prohibited by Applicable Law) provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code will not be eligible to participate.
(f) Notwithstanding anything in this Section 5 to the contrary, in the case of an Offering under the Non-423 Component, an Eligible Employee (or group of Eligible Employees) may be excluded from participation in the Plan or an Offering if the Board has determined, in its sole discretion, that participation of such Eligible Employee(s) is not advisable or practical for any reason.
6.PURCHASE RIGHTS; PURCHASE PRICE.
(a) On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, will be granted a Purchase Right to purchase up to that number of shares of Common Stock purchasable either with a percentage or with a maximum dollar amount, as designated by the Board (as defined by the Board in each Offering) during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date will be no later than the end of the Offering.
(b) The Board will establish one or more Purchase Dates during an Offering on which Purchase Rights granted for that Offering will be exercised and shares of Common Stock will be purchased in accordance with such Offering.
(c) In connection with each Offering made under the Plan, the Board may specify (i) a maximum number of shares of Common Stock that may be purchased by any Participant on any Purchase Date during such Offering,^^(ii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants pursuant to such Offering and/or (iii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants on any Purchase Date under the Offering. If the aggregate purchase of shares of Common Stock issuable upon exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata (based on each Participant’s accumulated Contributions) allocation of the shares of Common Stock (rounded down to the nearest whole share) available will be made in as nearly a uniform manner as will be practicable and equitable.
(d) The purchase price of shares of Common Stock acquired pursuant to Purchase Rights will be specified by Board prior to the commencement of an Offering and will not be less than the lesser of:
(i) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the Offering Date; or
(ii) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the applicable Purchase Date.
5
7. PARTICIPATION; WITHDRAWAL; TERMINATION.
(a) An Eligible Employee may elect to participate in an Offering and authorize payroll deductions as the means of making Contributions by completing and delivering to the Company or a Company Designee, within the time specified for the Offering, an enrollment form provided by the Company or Company Designee. The enrollment form will specify the amount of Contributions not to exceed the maximum amount specified by the Board. Each Participant’s Contributions will be credited to a bookkeeping account for such Participant under the Plan and will be deposited with the general funds of the Company except where Applicable Law requires that Contributions be deposited with a third party. If permitted in the Offering, a Participant may begin such Contributions with the first payroll occurring on or after the Offering Date (or, in the case of a payroll date that occurs after the end of the prior Offering but before the Offering Date of the next new Offering, Contributions from such payroll will be included in the new Offering). If permitted in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions. If required under Applicable Law or if specifically provided in the Offering and to extent permitted by Section 423 of the Code with respect to the 423 Component, in addition to or instead of making Contributions by payroll deductions, a Participant may make Contributions through payment by cash, check or wire transfer prior to a Purchase Date.
(b) During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company or a Company Designee a withdrawal form provided by the Company. The Company may impose a deadline before a Purchase Date for withdrawing. Upon such withdrawal, such Participant’s Purchase Right in that Offering will immediately terminate and the Company will distribute as soon as practicable to such Participant all of his or her accumulated but unused Contributions and such Participant’s Purchase Right in that Offering shall thereupon terminate. A Participant’s withdrawal from that Offering will have no effect upon his or her eligibility to participate in any other Offerings under the Plan, but such Participant will be required to deliver a new enrollment form to participate in subsequent Offerings.
(c) Unless otherwise required by Applicable Law, Purchase Rights granted pursuant to any Offering under the Plan will terminate immediately if the Participant either (i) is no longer an Employee for any reason or for no reason (subject to any post-employment participation period required by Applicable Law) or (ii) is otherwise no longer eligible to participate. The Company will distribute as soon as practicable to such individual all of his or her accumulated but unused Contributions.
(d) Unless otherwise determined by the Board, a Participant whose employment transfers or whose employment terminates with an immediate rehire (with no break in service) by or between the Company and a Designated Company or between Designated Companies will not be treated as having terminated employment for purposes of participating in the Plan or an Offering; however, if a Participant transfers from an Offering under the 423 Component to an Offering under the Non-423 Component, the exercise of the Participant’s Purchase Right will be qualified under the 423 Component only to the extent such exercise complies with Section 423 of the Code. If a Participant transfers from an Offering under the Non-423 Component to an Offering under the 423 Component, the exercise of the Purchase Right will remain non-qualified under the Non-423 Component. The Board may establish different and additional rules governing transfers between separate Offerings within the 423 Component and between Offerings under the 423 Component and Offerings under the Non-423 Component.
(e) During a Participant’s lifetime, Purchase Rights will be exercisable only by such Participant. Purchase Rights are not transferable by a Participant, except by will, by the laws of descent and distribution, or, if permitted by the Company, by a beneficiary designation as described in Section 10.
6
(f) Unless otherwise specified in the Offering or as required by Applicable Law, the Company will have no obligation to pay interest on Contributions.
8. EXERCISE OF PURCHASE RIGHTS.
(a) On each Purchase Date, each Participant’s accumulated Contributions will be applied to the purchase of shares of Common Stock, up to the maximum number of shares of Common Stock permitted by the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares of Common Stock will be issued unless specifically provided for in the Offering.
(b) Unless otherwise provided in the Offering, if any amount of accumulated Contributions remains in a Participant’s account after the purchase of shares of Common Stock on the final Purchase Date of an Offering, then such remaining amount will not roll over to the next Offering and will instead be distributed in full to such Participant after the final Purchase Date of such Offering without interest (unless otherwise required by Applicable Law).
(c) No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable U.S. federal and state, foreign and other securities, exchange control and other laws applicable to the Plan. If on a Purchase Date the shares of Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights will be exercised on such Purchase Date, and, subject to Section 423 of the Code with respect to the 423 Component, the Purchase Date will be delayed until the shares of Common Stock are subject to such an effective registration statement and the Plan is in material compliance, except that the Purchase Date will in no event be more than 27 months from the Offering Date. If, on the Purchase Date, as delayed to the maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in material compliance with all Applicable Laws, as determined by the Company in its sole discretion, no Purchase Rights will be exercised and all accumulated but unused Contributions will be distributed to the Participants without interest (unless the payment of interest is otherwise required by Applicable Law).
9. COVENANTS OF THE COMPANY.
(a) The Company will seek to obtain from each U.S. federal or state, foreign or other regulatory commission, agency or other Governmental Body having jurisdiction over the Plan such authority as may be required to grant Purchase Rights and issue and sell shares of Common Stock thereunder unless the Company determines, in its sole discretion, that doing so is not practical or would cause the Company to incur costs that are unreasonable. If, after commercially reasonable efforts, the Company is unable to obtain the authority that counsel for the Company deems necessary for the grant of Purchase Rights or the lawful issuance and sale of Common Stock under the Plan, and at a commercially reasonable cost, the Company will be relieved from any liability for failure to grant Purchase Rights and/or to issue and sell Common Stock upon exercise of such Purchase Rights.
7
10. DESIGNATION OF BENEFICIARY.
(a) The Company may, but is not obligated to, permit a Participant to submit a form designating a beneficiary who will receive any shares of Common Stock and/or Contributions from the Participant’s account under the Plan if the Participant dies before such shares and/or Contributions are delivered to the Participant. The Company may, but is not obligated to, permit the Participant to change such designation of beneficiary. Any such designation and/or change must be on a form approved by the Company.
(b) If a Participant dies, and in the absence of a valid beneficiary designation, the Company will deliver any shares of Common Stock and/or Contributions to the executor or administrator of the estate of the Participant. If no executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares of Common Stock and/or Contributions, without interest (unless the payment of interest is otherwise required by Applicable Law), to the Participant’s spouse, dependents or relatives, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
11. ADJUSTMENTS UPON CHANGES IN COMMON STOCK;CORPORATE TRANSACTIONS.
(a) In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 3(a), (iii) the class(es) and number of securities subject to, and the purchase price applicable to outstanding Offerings and Purchase Rights, and (iv) the class(es) and number of securities that are the subject of the purchase limits under each ongoing Offering. The Board will make these adjustments, and its determination will be final, binding and conclusive.
(b) In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue the outstanding Purchase Rights or may substitute similar rights (including a right to acquire the same consideration paid to the stockholders in the Corporate Transaction) for outstanding Purchase Rights, or (ii) if any surviving or acquiring corporation (or its parent company) **** does not assume or continue such Purchase Rights or does not substitute similar rights for such Purchase Rights, then the Participants’ accumulated Contributions will be used to purchase shares of Common Stock (rounded down to the nearest whole share) within ten business days (or such other period specified by the Board) prior to the Corporate Transaction under the outstanding Purchase Rights, and the Purchase Rights will terminate immediately after such purchase.
12. AMENDMENT, TERMINATIONOR SUSPENSION OF THE PLAN.
(a) The Board may amend the Plan at any time in any respect the Board deems necessary or advisable. However, except as provided in Section 11(a) relating to Capitalization Adjustments, stockholder approval will be required for any amendment of the Plan for which stockholder approval is required by Applicable Law.
(b) The Board may suspend or terminate the Plan at any time. No Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated.
8
Any benefits, privileges, entitlements and obligations under any outstanding Purchase Rights granted before an amendment, suspension or termination of the Plan will not be materially impaired by any such amendment, suspension or termination except (i) with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to facilitate compliance with any laws, listing requirements, or governmental regulations (including, without limitation, the provisions of Section 423 of the Code and the regulations and other interpretive guidance issued thereunder relating to Employee Stock Purchase Plans) including without limitation any such regulations or other guidance that may be issued or amended after the date the Plan is adopted by the Board, or (iii) as necessary to obtain or maintain favorable tax, listing, or regulatory treatment. To be clear, the Board may amend outstanding Purchase Rights without a Participant’s consent if such amendment is necessary to ensure that the Purchase Right and/or the Plan complies with the requirements of Section 423 of the Code with respect to the 423 Component or with respect to other Applicable Laws. Notwithstanding anything in the Plan or any Offering Document to the contrary, the Board will be entitled to: (i) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars; (ii) permit Contributions in excess of the amount designated by a Participant in order to adjust for mistakes in the Company’s processing of properly completed Contribution elections; (iii) establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant’s Contributions; (iv) amend any outstanding Purchase Rights or clarify any ambiguities regarding the terms of any Offering to enable the Purchase Rights to qualify under and/or comply with Section 423 of the Code with respect to the 423 Component; and (v) establish other limitations or procedures as the Board determines in its sole discretion advisable that are consistent with the Plan. The actions of the Board pursuant to this paragraph will not be considered to alter or impair any Purchase Rights granted under an Offering as they are part of the initial terms of each Offering and the Purchase Rights granted under each Offering.
13. Tax Qualification; Tax Withholding.
(a) Although the Company may endeavor to (i) qualify a Purchase Right for special tax treatment under the laws of the United States or jurisdictions outside of the United States or (ii) avoid adverse tax treatment, the Company makes no representation to that effect and expressly disavows any covenant to maintain special or to avoid unfavorable tax treatment, notwithstanding anything to the contrary in this Plan. The Company will be unconstrained in its corporate activities without regard to the potential negative tax impact on Participants.
(b) Each Participant will make arrangements, satisfactory to the Company and any applicable Related Corporation, to enable the Company or the Related Corporation to fulfill any withholding obligation for Tax-Related Items. Without limitation to the foregoing, in the Company’s sole discretion and subject to Applicable Law, such withholding obligation may be satisfied in whole or in part by (i) withholding from the Participant’s salary or any other cash payment due to the Participant from the Company or a Related Corporation; (ii) withholding from the proceeds of the sale of shares of Common Stock acquired under the Plan, either through a voluntary sale or a mandatory sale arranged by the Company; or (iii) any other method deemed acceptable by the Board. The Company shall not be required to issue any shares of Common Stock under the Plan until such obligations are satisfied.
(c) The 423 Component is exempt from the application of Section 409A of the Code, and any ambiguities herein shall be interpreted to so be exempt from Section 409A of the Code. The Non-423 Component is intended to be exempt from the application of Section 409A of the Code under the short-term deferral exception and any ambiguities shall be construed and
9
interpreted in accordance with such intent. In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Committee determines that an option granted under the Plan may be subject to Section 409A of the Code or that any provision in the Plan would cause an option under the Plan to be subject to Section 409A, the Committee may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Committee determines is necessary or appropriate, in each case, without the participant’s consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Section 409A of the Code, but only to the extent any such amendments or action by the Committee would not violate Section 409A of the Code. Notwithstanding the foregoing, the Company shall have no liability to a participant or any other party if the option under the Plan that is intended to be exempt from or compliant with Section 409A of the Code is not so exempt or compliant or for any action taken by the Committee with respect thereto.
14. EFFECTIVE DATE OF PLAN.
The Plan will become effective immediately prior to and contingent upon the Effective Date. No Purchase Rights will be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval must be within 12 months before or after the date the Plan is adopted (or if required under Section 12(a) above, materially amended) by the Board.
15. MISCELLANEOUS PROVISIONS.
(a) Proceeds from the sale of shares of Common Stock pursuant to Purchase Rights will constitute general funds of the Company.
(b) A Participant will not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Common Stock subject to Purchase Rights unless and until the Participant’s shares of Common Stock acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent).
(c) The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering will in any way alter the at will nature of a Participant’s employment or amend a Participant’s employment contract, if applicable, or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company or a Related Corporation or an Affiliate, or on the part of the Company, a Related Corporation or an Affiliate to continue the employment of a Participant.
(d) The provisions of the Plan will be governed by the laws of the State of Delaware without resort to that state’s conflicts of laws rules.
(e) If any particular provision of the Plan is found to be invalid or otherwise unenforceable, such provision will not affect the other provisions of the Plan, but the Plan will be construed in all respects as if such invalid provision were omitted.
(f) If any provision of the Plan does not comply with Applicable Law, such provision shall be construed in such a manner as to comply with Applicable Law.
10
16. DEFINITIONS.
As used in the Plan, the following definitions will apply to the capitalized terms indicated below:
(a) “423 Component” means the part of the Plan, which excludes the Non-423 Component, pursuant to which Purchase Rights that satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.
(b) “ Affiliate ” means any entity, other than a Related Corporation, whether now or subsequently established, which is at the time of determination, a “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
(c) “ApplicableLaw” means shall mean the Code and any applicable securities, federal, state, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (or under the authority of the NASDAQ Stock Market, the New York Stock Exchange or the Financial Industry Regulatory Authority).
(d) “Board” means the board of directors of the Company.
(e) “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Purchase Right after the date the Plan is adopted by the Board without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(f) “Code” means theU.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(g) “Committee” means a committee of one or more members of the Board to whom authority has been delegated by the Board in accordance with Section 2(c).
(h) “Common Stock” means the common stock of the Company.
(i) “Company” means Infleqtion, Inc., a Delaware corporation.
(j) “Contributions” means the payroll deductions and other additional payments specifically provided for in the Offering that a Participant contributes to fund the exercise of a Purchase Right. A Participant may make additional payments into his or her account if specifically provided for in the Offering, and then only if the Participant has not already had the maximum permitted amount withheld during the Offering through payroll deductions and, with respect to the 423 Component, to the extent permitted by Section 423 of the Code.
11
(k) “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i) a sale **** or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its subsidiaries;
(ii) a sale or other disposition of more than 50% of the outstanding securities of the Company;
(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
(l) “ Designated 423 Corporation ” means any Related Corporation selected by the Board to participate in the 423 Component.
(m) “ Designated Company ” means any Designated Non-423 Corporation or Designated 423 Corporation, provided, however, that at any given time, a Related Corporation participating in the 423 Component shall not be a Related Corporation participating in the Non-423 Component.
(n) “ Designated Non-423Corporation ” means any Related Corporation or Affiliate selected by the Board to participate in the Non-423 Component.
(o) “Director” means a member of the Board.
(p) “Effective Date” means the effective date of this Plan, which is the date of the closing of the transactions contemplated by the Agreement and Plan of Merger and Reorganization by and among Churchill Capital Corp X, AH Merger Sub I, Inc., AH Merger Sub II, LLC, and ColdQuanta, Inc., dated as of September 8, 2025, provided that this Plan is approved by the Company’s stockholders prior to such date.
(q) “Eligible Employee” means an Employee who meets the requirements set forth in the document(s) governing the Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan.
(r) “Employee” means any person, including an Officer or Director, who is “employed” for purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation, or solely with respect to the Non-423 Component, an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.
12
(s) “Employee Stock Purchase Plan” means a plan that grants Purchase Rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code.
(t) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.
(u) “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in such source as the Board deems reliable. Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing sales price on the last preceding date for which such quotation exists.
(ii) In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith in compliance with Applicable Laws and regulations and, to the extent applicable as determined in the sole discretion of the Board, in a manner that complies with Sections 409A of the Code
(v) “Governmental Body” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or entity and any court or other tribunal, and for the avoidance of doubt, any tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including the NASDAQ Stock Market, the New York Stock Exchange and the Financial Industry Regulatory Authority).
(w) “Non-423 Component” means the part of the Plan, which excludes the 423 Component, pursuant to which Purchase Rights that are not intended to satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.
(x) “Offering” means the grant to Eligible Employees of Purchase Rights, with the exercise of those Purchase Rights automatically occurring at the end of one or more Purchase Periods. The terms and conditions of an Offering will generally be set forth in the “Offering Document” approved by the Board for that Offering.
(y) “Offering Date” means a date selected by the Board for an Offering to commence.
(z) “Officer” **** means **** a person who is an officer of the Company or a Related Corporation within the meaning of Section 16 of the Exchange Act.
(aa) “Participant” means an Eligible Employee who holds an outstanding Purchase Right.
13
(bb) “Plan” means this Infleqtion, Inc. 2026 Employee Stock Purchase Plan, as amended from time to time, including both the 423 Component and the Non-423 Component.
(cc) “Purchase Date” means one or more dates during an Offering selected by the Board on which Purchase Rights will be exercised and on which purchases of shares of Common Stock will be carried out in accordance with such Offering.
(dd) “Purchase Period” means a period of time specified within an Offering, generally beginning on the Offering Date or on the first Trading Day following a Purchase Date, and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods.
(ee) “Purchase Right” means an option to purchase shares of Common Stock granted pursuant to the Plan.
(ff) “Related Corporation” means any “parent corporation” or “subsidiary corporation” of the Company whether now or subsequently established, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.
(gg) “Securities Act” means the U.S. Securities Act of 1933, as amended.
(hh) “Tax-Related Items” means any income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items arising out of or in relation to a Participant’s participation in the Plan, including, but not limited to, the exercise of a Purchase Right and the receipt of shares of Common Stock or the sale or other disposition of shares of Common Stock acquired under the Plan.
(ii) “Trading Day” **** means any day on which the exchange(s) or market(s) on which shares of Common Stock are listed, including but not limited to the New York Stock Exchange, Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or any successors thereto, is open for trading.
14
EX-10.11
Exhibit 10.11
COLDQUANTA INCORPORATED
EMPLOYMENT AGREEMENT
(Matthew Kinsella)
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of this 6th day of June 2024 (the “Effective Date”), by and between (i)COLDQUANTA INCORPORATED D /B /A INFLEQTION (the “Company”), and (ii)MATTHEW KINSELLA (“Executive”) (collectively, the “Parties”, each a “Party”).
WHEREAS, the Company and Executive desire to set forth the terms of Executive’s employment with the Company as further described in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Parties agree as follows:
1. EMPLOYMENT. The Company will employ Executive, and Executive shall serve the Company, in the capacity of Chief Executive Officer (“CEO”).
2. DUTIES; LOCATION OF SERVICES.
(a) Executive will report to the Company’s Board of Directors (the “Board”), performing such duties as are normally associated with Executive’s position and such duties as are assigned to Executive from time to time, subject to the oversight and direction of the Board. During the term of Executive’s employment with the Company, Executive will devote Executive’s best efforts and substantially all of Executive’s business time and attention to the business of the Company. Executive shall render exclusive, full-time services to the Company primarily at the Company’s office in Boulder, Colorado, and from time to time at such other locations as may be necessary or as otherwise reasonably requested or permitted by the Company.
(b) Subject to the terms and conditions of this Agreement, Executive’s responsibilities, working conditions, and duties may be changed, expanded, or eliminated at the sole discretion of the Company. Executive shall devote Executive’s best efforts and full business time, skill, and attention to performance of Executive’s duties on behalf of the Company; provided, however, that Executive may engage in civic and not-for-profit activities (e.g. charitable and industry association activities) as long as such activities do not materially interfere with Executive’s obligations hereunder. During Executive’s employment with the Company, Executive agrees not to engage in any business or for-profit activities outside the Company, including serving on any advisory boards or boards of directors of for-profit entities, except (i) with the prior written approval of the Board; and (ii) and for service on three boards of directors in effect as of the Effective Date for companies in which Maverick Ventures Investment L.P. is an investor, provided such service does not materially interfere with Executive’s obligations hereunder and such companies remain in business unrelated to the business of the Company. By signing this Agreement, Executive represents that, to the best of Executive’s knowledge, Executive is not subject to any other contract or duty that would interfere in any way with Executive’s employment with the Company or performance of employment duties hereunder.
3. POLICIES AND PROCEDURES. Executive shall be subject to and will at all times comply with the policies and procedures of the Company, as they may be modified, expanded, or eliminated from time to time at the Company’s sole discretion, except to the extent any such policy or procedure specifically conflicts with the express terms of this Agreement (in which case, this Agreement shall control).
4. COMPENSATION.
(a) Base Salary. For services rendered hereunder, Executive shall initially receive a base salary at the rate of $287,000 per year, paid periodically in accordance with ordinary Company payroll practices, subject to applicable payroll tax withholdings and deductions, and subject to annual reviews and periodic adjustment (including, but not limited to, the adjustment contemplated in this Section 4(a)) (“Base Salary”). Starting on the first regular payroll date following the closing of a Qualified Financing (as defined below), Executive’s Base Salary shall increase to $410,000, subject to review and adjustment from time to time by the Company in its sole discretion, payable subject to standard federal and state payroll withholding requirements in accordance with the Company’s standard payroll practices. For purposes of this Agreement, a “Qualified Financing” is defined as any transaction or series of transactions through which the Company has secured and closed a preferred stock financing pursuant to which the Company raises total proceeds of not less than $50,000,000 (excluding the conversion of convertible securities issued for capital raising purposes); provided, however, that if such a transaction or series of transactions includes more than one closing, the Qualified Financing will not be deemed to occur until the date upon which the Company receives at least the threshold proceeds.
(b) AnnualDiscretionary Bonus. Executive will be eligible for a discretionary annual cash bonus with a target of twenty-five percent (25%) of Executive’s then current Base Salary, subject to review and adjustment from time to time by the Company in its sole discretion, payable subject to standard payroll withholding requirements (“Target Bonus”). Whether or not Executive earns any portion of such Target Bonus will be dependent upon (a) the actual achievement by Executive and the Company of the applicable individual and corporate performance goals, as determined by the Board in its sole discretion, and (b) Executive’s continuous performance of services to the Company through the date any such bonus is paid. The bonus may be greater or lesser than the Target Bonus and may be zero. The annual period over which performance is measured for purposes of the Target Bonus is January 1 through December 31. Any bonus attributable to the 2024 calendar year will be prorated to the Effective Date. The Board will determine in its sole discretion the extent to which Executive has achieved the performance goals upon which the Target Bonus is based and the amount of the Target Bonus, if any.
5. STOCK OPTION.
(a) Subject to approval by the Board, as soon as reasonably practicable following the Effective Date, the Company shall grant Executive an option (the “Option”) to purchase a number of shares of the Company’s common stock (the “Common Stock”) equivalent to 5% of the Company’s fully-diluted capitalization (assuming conversion of all securities convertible into Common Stock and exercise of all outstanding options and warrants, including (i) all shares of Common Stock reserved and available for future grant under the Company’s 2017 Stock Incentive Plan (as amended, the “Plan”); and (ii) options, warrants and other convertible securities in excess
2
of the Plan promised or under offer letters, letters of intent or acquisition agreement; but excluding the shares of equity securities of the Company issuable upon the conversion of the Notes or other convertible securities issued for capital-raising purposes (e.g., Simple Agreements for Future Equity). The Option will have an exercise price equal to the fair market value of a share of Common Stock as determined by the Board as of the date of grant based on an a 409A valuation with an effective date less than twelve months from the date of grant of the Option, pursuant to the terms of the Plan and Executive’s stock option grant notice and agreements, as applicable. The Option will be subject to the terms and conditions of the Plan and Executive’s grant agreement, and shall vest 25% on the one-year anniversary of the earlier of (the “Vesting Commencement Date”) (y) April 5, 2025 or (z) the start date of employment with the Company, and thereafter over the ensuing 3 years in a series of thirty-six (36) successive, equal monthly installments. Notwithstanding the foregoing:
(i) if within two months before or 12 months following a Corporate Transaction (as defined in the Plan), Executive’s service to the Company in all capacities is involuntarily terminated by the Company without Cause, or Executive resigns Executive’s service to the Company in all capacities for Good Reason, and in either case other than as a result of death or Disability (as defined below), and provided that such termination constitutes a Separation From Service (as defined below), the vesting of the Option shall be accelerated so that all of the then unvested shares subject to the Option shall vest immediately;
(ii) in addition to any other vesting provided under this Agreement, in the event of a Corporate Transaction prior to the time when the Option is fully vested, the Option shall vest as of the closing of the Corporate Transaction as to the unvested portion thereof as to the greater of:
(1) the amount of shares determined by the Board; or
(2) as applicable, one of the following:
a. 25% of the unvested shares if the closing is between the Vesting Commencement Date and the one year anniversary of the Vesting Commencement Date;
b. 50% of the unvested shares if the closing is between the one year anniversary of Vesting Commencement Date and the three year anniversary of the Vesting commencement Date; or
c. 100% of the unvested shares if the closing is after the three year anniversary of the Vesting Commencement Date;
(iii) if before the one year anniversary of the Vesting Commencement Date, Executive’s service to the Company in all capacities is involuntarily terminated by the Company without Cause, or Executive resigns Executive’s service to the Company in all capacities for Good Reason, then, the Option shall automatically be vested as to 25% of the shares exercisable;
3
(b) The Option shall be an incentive stock option (“ISO”) as to the first $100,000 that becomes exercisable in each year and the remainder, if any, shall be a non-qualified stock option (“NSO”). The Option will qualify as an ISO and have a post-termination exercise period of 18 months. The parties agree that if the ISO portion of the Option is actually exercised prior to than three months after termination (or 12 months in the case of a termination by death or disability), it will be treated as an ISO and if exercised after such time, both the ISO portion and NSO portion of the Option shall be treated as an NSO.
(c) In the event of a Spin-Off (as defined below) during the term of the Option:
(i) the Option the exercise price and number of shares of Common Stock exercisable thereunder shall be proportionately adjusted; and
(ii) Executive shall be granted at the closing of the Spin-Off, an option for exercisable for a number of shares of the class of securities of Spin-Co (as defined below) issued to other holders of the Company equal to 5% of Spin-Co’s fully-diluted capitalization (assuming conversion of all securities convertible into Common Stock and exercise of all outstanding options and warrants, including all shares of Common Stock reserved and available for future grant under any Spin-Co incentive plan. The option for Spin-Co shares shall have an exercise price equal to 100% of fair market value per share of the securities issuable upon exercise and shall be vested to the extent that the Option is vested at such time and shall continue to vest in the same manner as the Option.
(d) “Spin-Co” an new entity that is a result of a Spin-Off.
(e) “Spin-Off” means separation of a business from the Company (other than creation of a wholly-owned subsidiary) whether under Internal Revenue Code Section 355 or any other spin-off, split-off, recapitalization, combination or other distribution of Company’s securities without the receipt of consideration by the Company.
6. OTHER BENEFITS. While employed by the Company pursuant to this Agreement, Executive shall be entitled to the following benefits:
(a) ExecutiveBenefits. The Executive shall be entitled to all benefits to which other executive officers of the Company are entitled, on the same terms and conditions in effect from time-to-time, including, without limitation, participation in any pension and profit sharing plans, the Company’s 401(k) plan, group insurance policies and plans (including medical, health, vision, and disability insurance policies and plans, and the like) which may be maintained by the Company for the benefit of its executives. The Company reserves the right to alter, discontinue, and/or amend its benefit plans and programs from time to time in its sole discretion.
(b) Expense Reimbursement.
(i) General Expense Reimbursement. Executive shall receive, upon presentation of proper receipts and vouchers as the Company may reasonably request, reimbursement for direct and reasonable out-of-pocket expenses incurred in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policies and procedures in effect from time-to-time.
4
(ii) Relocation Expenses. If (i) Executive elects to relocate his household to the Denver/Boulder metropolitan area while this Agreement is in effect (the “Relocation”), and (ii) Executive executes a version of the Employee Confidential Information and Inventions Assignment Agreement presented by the Company for Colorado employees (subject to applicable law, containing, among other terms, non-competition and non-solicitation of customers provisions applying during employment and for twelve (12) months thereafter) promptly following the Relocation, then upon presentation of proper receipts and vouchers as the Company may reasonably request, the Company shall reimburse Executive up to an aggregate amount of $50,000, less any required withholding and/or deductions required by applicable law, for relocation expenses (including any family visits to Boulder to review housing options) in connection with the Relocation.
(iii) Travel and Lodging Expenses. So long as Executive’s primary residence is in the San Francisco, California area, the Company will reimburse Executive for reasonable lodging in the Denver/Boulder metropolitan area, as well as related reasonable travel expenses for one coach roundtrip flight per week for Executive (or for Executive’s spouse if Executive is remaining in Colorado for the week) from Executive’s home in California, to the Denver/Boulder metropolitan area, in a combined maximum gross amount of $5,000.00 per month, or such other amount agreed to in writing between Executive and the Board, and subject to revision over time in view of business needs (“Travel and Lodging Expenses”). The Company shall reimburse such Travel and Lodging Expenses, less any required withholding and/or deductions required by applicable law, within thirty (30) days of receipt of an invoice or other documentation that complies with Company policies, provided that Executive submits such receipts and other documentation within sixty (60) days following the date such Travel and Lodging Expenses are incurred. In order to be reimbursed by the Company, all travel and lodging expenditures must comply with the Company’s policies, as may be amended from time to time.
(iv) 409A. For the avoidance of doubt, to the extent that any reimbursements payable to Executive are subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”): (a) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.
(c) Vacation. Under the Company’s non-accrual Paid Time Off (“PTO”) policy, Executive will be able to take a reasonable amount of paid time off each year for vacation and other short-term illnesses and personal absences. Since Executive shall not accrue PTO, “unused” PTO will not be carried over from one year to the next and will not be paid out upon termination. Executive’s PTO rights shall otherwise be governed by the Company’s policies and applicable law, as each is in effect from time to time.
(d) Indemnification and Directors and Officers Insurance. Executive shall be covered by standard directors and offices insurance during the term of employment or service as a director. The Company agrees to execute and deliver with Executive an Indemnification Agreement in the standard form executed by directors but covering service as both an officer and director.
5
7. CONFIDENTIAL INFORMATION, RIGHTS, ANDDUTIES.
(a) Proprietary Information. As a condition of employment, Executive agrees to execute, deliver, and comply with the Employee Confidential Information and Inventions Assignment Agreement attached hereto as Exhibit A (the “Confidential Information Agreement”).
(b) Exclusive Property. Executive agrees that all Company-related business procured by the Executive, and all Company-related business opportunities and plans made known to Executive while employed by the Company, are, and shall remain, the permanent and exclusive property of the Company.
8. TERMINATION OF EMPLOYMENT.
(a) At-Will Status. The Company and Executive understand and agree that Executive’s employment relationship with the Company is at-will. Accordingly, there are no promises or representations concerning the duration of Executive’s employment relationship, and it may be terminated by either Executive or the Company at any time, with or without Cause (as defined herein), and with or without advance notice. Executive’s at-will status cannot be altered except in an express written agreement signed by Executive and the Company with the specific approval of the Board.
(b) Termination Due to Death orDisability. Subject to applicable state or federal law, Executive’s employment with the Company will automatically terminate upon Executive’s death. Subject to applicable state and federal law, the Company shall at all times have the right, upon written notice to Executive, to terminate this Agreement based on Executive’s Disability. For purposes of this Agreement, “Disability” means Executive is unable due to a physical or mental condition to perform the essential functions of Executive’s position with or without reasonable accommodation for six (6) months in the aggregate during any twelve (12) month period. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law. In the event Executive’s employment is terminated based on Executive’s Disability, Executive will not receive the Severance Benefits (as defined below), or any other severance compensation or benefit, except that, pursuant to the Company’s standard payroll policies, the Company shall provide to Executive the Accrued Obligations (as defined below).
(c) Resignation by Executive (other than for Good Reason). Executive may resign from the Company at any time. The Company requests that Executive provide at least three (3) weeks’ advance written notice of a termination to allow for an orderly transition. The Company may accelerate the date Executive’s resignation is to become effective, in its sole discretion. In the event Executive resigns from Executive’s employment with the Company (other than for Good Reason (as defined below)), Executive will not receive Severance Benefits, or any other compensation or benefits, except that, pursuant to the Company’s standard payroll policies, the Company shall provide to Executive the Accrued Obligations.
6
(d) Termination by the Company for Cause. The Company shall have the right to terminate Executive’s employment with the Company at any time for Cause (as defined below) by giving notice as described in Section 8(e) of this Agreement. In the event Executive’s employment is terminated at any time for Cause, Executive will not receive Severance Benefits, or any other compensation or benefits, except that, pursuant to the Company’s standard payroll policies, the Company shall provide to Executive the Accrued Obligations.
(e) Definition of Cause. For purposes of this Agreement, “Cause” shall mean termination of Executive by the Company due to Executive’s: (i) willful and continued failure to attempt in good faith to substantially perform his duties to the Company or willful refusal to follow the material, lawful directives of the Board (other than by reason of Disability), which failure continues for fifteen (15) days after Executive receives specific written notice to cure; (ii) conviction or plea of guilty or nolo contendere to any felony or crime involving moral turpitude; (iii) act or omission which constitutes a material breach of this Agreement, or the material provisions of the Confidential Information Agreement or the Company’s policies, which breach continues for fifteen (15) days after Executive receives specific written notice to cure; (iv) commission of an act of fraud, embezzlement, or material dishonesty against the property or personnel of the Company; or (v) willful misconduct that would reasonably be expected to result in material harm to the business, reputation, assets, properties, prospects, results of operations, or financial condition of the Company, which continues for fifteen (15) days after Executive receives specific written notice to cure.
(f) Definition of Good Reason. For purposes of this Agreement, “Good Reason” shall mean, without Executive’s prior consent, the occurrence of any of the following circumstances after Executive’s provision of written notice to the Company of the existence of such condition (which notice must be provided within thirty (30) days of the initial existence of the condition and must specify the particular condition in reasonable detail), provided that the Company has not first provided notice to Executive of its intent to terminate Executive’s employment: (i) a material reduction in Executive’s duties, responsibilities, and authorities, Executive’s positions or the conditions of Executive’s employment from those specified in this Agreement, or otherwise hereunder (other than inadvertent actions that are promptly remedied), provided, however, that neither the conversion of the Company to a subsidiary, division or unit of an acquiring entity in connection with a Corporate Transaction (as defined in the Plan), or Executive’s reporting relationships following a Corporate Transaction, nor a change in title, will be deemed a “material reduction” in and of itself or material adverse alteration in, Executive’s position, title, duties, or responsibilities; (ii) a reduction by the Company of Executive’s Base Salary (other than across-the-board salary cuts to all similarly-situated employees) equal to or greater than 10% of Executive’s Base Salary; (iii) Company’s failure to pay Executive any material amounts due hereunder if such failure continues for a period of ten (10) business days after Company’s receipt of written notice from Executive of such failure; or (iv) a requirement that Executive relocate his principal place of employment such that it increases his one way commute by more than fifty (50) miles as compared to his then-current principal place of employment immediately prior to such relocation (excluding, for the avoidance of doubt, Executive’s relocation from California to the Boulder, Colorado metropolitan area). Notwithstanding the foregoing, Good Reason shall only exist if the Company is provided a thirty (30) day period to cure the event or condition giving rise to Good Reason, and it fails to do so within that cure period (and, additionally, Executive must resign for such Good Reason condition by giving the Company written notice within thirty (30) days after the period for curing the violation or condition has ended).
7
(g) Final Pay upon Termination for Any Reason. Except as otherwise provided by this Agreement and/or required by law, upon termination of Executive’s employment for any reason, the Company’s obligation to make payments hereunder shall cease, except that the Company shall pay all amounts due and payable for Executive’s services through Executive’s last day of employment (the “Separation Date”), including all accrued unpaid Base Salary earned through the Separation Date, any benefits owed to Executive under any qualified retirement plan or health and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan, and any reimbursable business expenses incurred, but not reimbursed as of the Separation Date (the “Accrued Obligations”).
(h) Severance Benefits upon Termination by the Company without Cause orExecutive’s Resignation for Good Reason.
(i) Severance Benefits. If Executive’s employment is terminated by the Company without Cause or if Executive resigns for Good Reason (excluding clause (i) thereof), Executive shall be eligible to receive payment of an amount equal to twelve (12) months of Executive’s Base Salary in effect immediately prior to the Separation Date less applicable payroll tax withholdings and deductions (the applicable time period between (i) and (ii), the “Severance Period,” and such amount the “Severance”). In addition, and provided that Executive timely elects to continue Executive’s group health insurance coverage after the Separation Date pursuant to the federal COBRA law or, if applicable, state insurance laws (collectively, “COBRA”), and the terms of the governing health insurance policies, the Company will reimburse the monthly COBRA health insurance premiums (the “COBRA Payments”) Executive pays to continue Executive’s health insurance coverage (including dependent coverage) during the Severance Period or until such earlier date as Executive either becomes eligible for group health insurance coverage through a new employer or ceases to be eligible for COBRA coverage (the “COBRA Payment Period”). Executive must submit to the Company appropriate documentation of the foregoing health insurance payments, within sixty (60) days of making such payments, in order to be reimbursed. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Payments without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), at the end of each remaining month of the COBRA Payment Period, the Company shall pay Executive directly a taxable monthly amount which, after taxes, equals the COBRA Payment amount the Company would have otherwise paid to Executive (assuming a 35% tax rate), which Executive may, but is not obligated to, use toward the cost of COBRA premiums. Executive agrees to promptly notify the Company in writing if Executive becomes eligible for group health insurance coverage through a new employer before the end of the specified reimbursement period. For sake of reference, all severance benefits provided in this Section 8(h)(i) shall be referred to collectively as the “SeveranceBenefits”.
(ii) Preconditions. As a precondition to receiving the Severance Benefits, Executive must (i) remain in compliance with all continuing obligations Executive owes to the Company, including those set forth under Executive’s Confidential Information Agreement, (ii) within the timeframe provided in the Release (defined below) (which will be no later than sixty (60) days after the Separation Date), Executive must sign and return to the Company, a separation agreement and release of claims in substantially the form attached hereto as Exhibit B (the “Release”) and allow the Release to become fully-effective and non-revocable by its terms, and
8
(iii) if Executive holds any other positions with the Company or any affiliate, including a position on the Board, Executive resigns such position(s) to be effective no later than the date of Executive’s termination date (or such other date as requested by the Board). The Severance will be paid in the form of continuing installments on the Company’s ordinary payroll schedule, beginning with the first such date that occurs at least eight (8) days after the date the Release becomes effective (provided Executive has returned the fully executed copy of the Release to the Company).
9. CODE SECTION 409A COMPLIANCE.
(a) Notwithstanding anything set forth in this Agreement to the contrary, any payments and benefits provided pursuant to this Agreement which constitute “deferred compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A shall not commence until Executive has incurred a “separation from service” (as such term is defined in the Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to Executive without causing Executive to incur the additional 20% tax under Section 409A.
(b) For the avoidance of doubt, it is intended that the payments and benefits set forth in this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9) and this Agreement will be construed to the greatest extent possible as consistent with those provisions. To the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A and incorporates by reference all required definitions and payment terms. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A 2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this Agreement, if the Company (or, if applicable, the successor entity thereto) determines that any payments upon Executive’s Separation From Service set forth herein and/or under any other agreement with the Company constitute “deferred compensation” under Section 409A and Executive is, on Executive’s Separation From Service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely, to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments upon Executive’s Separation From Service shall be delayed until the earlier to occur of: (a) the date that is six months and one day after Executive’s Separation From Service or (b) the date of Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”). On the Specified Employee Initial Payment Date, the Company (or the successor entity thereto, as applicable) shall (A) pay to Executive a lump sum amount equal to the sum of the payments upon Executive’s Separation From Service that Executive would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of the severance benefits had not been so delayed pursuant to this Section 9(b), and (B) commence paying the balance of the severance benefits in accordance with the applicable payment schedules set forth in this Agreement.
9
(c) None of the Severance Benefits under this Agreement will commence or otherwise be delivered prior to the effective date of the Release. Except to the minimum extent that payments must be delayed because Executive is a “specified employee” (as described above) or until the effectiveness of the Release, all amounts will be paid as soon as practicable in accordance with the Company’s normal payroll practices and no interest will be due on any amounts so deferred.
10. BETTER AFTER TAX PROVISION.
(a) If any proposed payment or benefit that Executive will or may receive from the Company or otherwise (a “280GPayment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then prior to closing the transaction that would cause a payment to be a 280G Payment, the Company shall seek shareholder approval of the 280G Payment pursuant to the provisions of Treasury Regulations 1.280G-1. In the event that shareholder approval is not given the, 280G Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either (i) the largest portion of the 280G Payment that would result in no portion of the 280G Payment (after reduction) being subject to the Excise Tax, or (ii) the largest portion, up to and including the total, of the 280G Payment, whichever amount (i.e., the amount determined by clause (i) or by clause (ii)), after taking into account all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the 280G Payment may be subject to the Excise Tax. If a reduction in a 280G Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (i) of the preceding sentence, the reduction will occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”). Determination of the Reduced Amount will be determined in consultation with Executive and Executive’s counsel.
(b) Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the 280G Payment being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to Section 409A of the Code, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, will be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: (A) as a first priority, the modification will preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, 280G Payments that are contingent on future events (e.g., earnouts, being terminated without Cause), will be reduced (or eliminated) before 280G Payments that are not contingent on future events; and (C) as a third priority, 280G Payments that are “deferred compensation” within the meaning of Section 409A of the Code will be reduced (or eliminated) before 280G Payments that are not “deferred compensation” within the meaning of Section 409A of the Code.
(c) If Section 280G of the Code is not applicable by law to Executive, the Company will determine whether any similar law in Executive’s jurisdiction applies and should be taken into account.
10
(d) The independent professional firm engaged by the Company for general tax audit purposes as of the day prior to the effective date of the Corporate Transaction will make all determinations required to be made under this Section 10. If the firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Corporate Transaction, the Company will appoint a nationally recognized independent professional firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder. The Company will use commercially reasonable efforts to cause the firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to the Company and Executive within thirty (30) calendar days after the date on which Executive’s right to a 280G Payment becomes reasonably likely to occur (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive.
(e) If Executive receives a 280G Payment for which the Reduced Amount was determined pursuant to clause (i) of Section 10(a) and the Internal Revenue Service determines thereafter that some portion of the 280G Payment is subject to the Excise Tax, Executive will promptly return to the Company a sufficient amount of the 280G Payment (after reduction pursuant to clause (i) of Section 10(a)) so that no portion of the remaining 280G Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (ii) of the first paragraph of Section 10(a), Executive will have no obligation to return any portion of the 280G Payment pursuant to the preceding sentence.
11. MISCELLANEOUS.
(a) Cooperation with Company after Termination of Employment. Following termination of Executive’s employment for any reason, Executive shall fully cooperate with the Company in all matters reasonably related to the winding up of Executive’s pending work including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to such other employees as may be designated by the Company. The Company will reimburse Executive for reasonable out-of-pocket expenses Executive incurs in connection with any such cooperation (excluding forgone wages, salary, or other compensation) and will make reasonable efforts to accommodate Executive’s scheduling needs.
(b) Taxes. Executive shall be responsible for the payment of any taxes due on any and all compensation, stock option, or benefit provided by the Company pursuant to this Agreement which are not withheld by the Company. Executive agrees to indemnify and hold harmless the Company from any and all claims or penalties asserted against the Company arising from Executive’s failure to pay taxes due on any compensation, stock option, or benefit provided by the Company pursuant to this Agreement. Executive expressly acknowledges that the Company has not made any representation about the tax consequences of any consideration provided by the Company to Executive pursuant to this Agreement.
(c) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.
11
(d) Survival. Provisions of this Agreement which by their terms must survive the termination of this Agreement in order to effectuate the intent of the parties will survive any such termination, whether by expiration of the term, termination of Executive’s employment, or otherwise, for such period as may be appropriate under the circumstances.
(e) Modification/Waiver. This Agreement may not be amended, modified, superseded, canceled, renewed, or expanded, or any terms or covenants hereof waived, except by a writing executed by each of the Parties or, in the case of a waiver, by the Party waiving compliance. Failure of any Party at any time to require performance of any provision hereof shall in no manner affect his, her, or its right at a later time to enforce such provision. No waiver by a Party of a breach of this Agreement shall be deemed to be or construed as a waiver of any other breach of any term or condition contained in the Agreement.
(f) Successors and Assigns. This Agreement may be assigned by the Company to an affiliated entity or to any successor or assignee of the Company with or without Executive’s consent. This Agreement is not assignable by Executive.
(g) Notices. All notices to be given hereunder shall be in writing and shall be deemed to have been duly given on: the date personally or hand delivered; one (1) day after being sent by internationally-recognized overnight delivery courier; and three (3) days after being sent by certified mail, return receipt requested. Notices mailed to Executive shall be sent to Executive’s last home address as reflected in the Company’s personnel records. Executive promptly shall notify Company of any change in Executive’s address. Notices to be issued to the Company shall be directed to the Board and shall be mailed to the Company’s headquarters, with a copy (which shall not constitute notice) to Michael Nelson, Cooley LLP, 1144 15^th^ Street, Suite 2300, Denver, CO 80202.
(h) Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the laws of the State of Colorado.
(i) Dispute Resolution. To aid the rapid and economical resolution of disputes that may arise in connection with Executive’s employment with the Company, and in exchange for the mutual promises contained in this Agreement, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, Executive’s employment with the Company, or the termination of Executive’s employment, shall be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration conducted by JAMS, Inc. (“JAMS”) or its successor, under JAMS’ then applicable rules and procedures appropriate to the relief being sought (available upon request and also currently available at the following web address: (i) https://www.jamsadr.com/rules-employment-arbitration/ and (ii) https://www.jamsadr.com/rules-comprehensive-arbitration/) at a location closest to where Executive last worked for the Company or another mutually agreeable location. Notwithstanding the foregoing, if JAMS is unavailable due to location or otherwise, or if the Parties mutually agree, then the arbitration shall be conducted by the American Arbitration
12
Association (“AAA”) or its successor, under AAA’s then applicable rules and procedures appropriate to the relief being sought (available upon request and also currently available at the following web address: https://www.adr.org/sites/default/files/EmploymentRules-Web.pdf), at a location closest to where Executive last worked for the Company or another mutually agreeable location. Executive acknowledges that by agreeing to this arbitration procedure, both Executive and the Company waive the right to resolve any suchdispute through a trial by jury or judge. The Federal Arbitration Act, 9 U.S.C. § 1 et seq., will, to the fullest extent permitted by law, govern the interpretation and enforcement of this arbitration agreement and any arbitration proceedings. This provision shall not be mandatory for any claim or cause of action to the extent applicable law prohibits subjecting such claim or cause of action to mandatory arbitration and such applicable law is not preempted by the Federal Arbitration Act or otherwise invalid (collectively, the “Excluded Claims”), such as non-individual claims that cannot be waived under applicable law, claims or causes of action alleging sexual harassment or a nonconsensual sexual act or sexual contact, or unemployment or workers’ compensation claims brought before the applicable state governmental agency. In the event Executive or the Company intends to bring multiple claims, including one of the Excluded Claims listed above, the Excluded Claims may be filed with a court, while any other claims will remain subject to mandatory arbitration. Executive acknowledges and agrees that proceedings of any non-individual claim(s) under the California Private Attorneys General Act (“PAGA”) that may be brought in court shall be stayed for the duration and pending a final resolution of the arbitration of any individual or individual PAGA claim. Nothing herein prevents Executive from filing and pursuing proceedings before a federal or state governmental agency, although if Executive chooses to pursue a claim following the exhaustion of any applicable administrative remedies, that claim would be subject to this provision. In addition, with the exception of Excluded Claims arising out of 9 U.S.C. § 401 et seq., all claims, disputes, or causes of action under this Section, whether by Executive or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class, representative, or collective proceeding, nor joined or consolidated with the claims of any other person or entity. Executive acknowledges that by agreeing to this arbitration procedure, both Executive and the Company waive all rights to have any dispute be brought, heard, administered, resolved, or arbitrated on a class,representative, or collective action basis. The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. If a court finds, by means of a final decision, not subject to any further appeal or recourse, that the preceding sentences regarding class, representative, or collective claims or proceedings violate applicable law or are otherwise found unenforceable as to a particular claim or request for relief, the Parties agree that any such claim(s) or request(s) for relief be severed from the arbitration and may proceed in a court of law rather than by arbitration. All other claims or requests for relief shall be arbitrated. Executive will have the right to be represented by legal counsel at any arbitration proceeding. Questions of whether a claim is subject to arbitration and procedural questions which grow out of the dispute and bear on the final disposition are matters for the arbitrator to decide, provided however, that if required by applicable law, a court and not the arbitrator may determine the enforceability of this Section with respect to Excluded Claims. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written statement signed by the arbitrator regarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based. The arbitrator
13
shall be authorized to award all relief that Executive or the Company would be entitled to seek in a court of law. The Company shall pay all arbitration administrative fees in excess of the administrative fees that Executive would be required to pay if the dispute were decided in a court of law. Each Party is responsible for its own attorneys’ fees, except as may be expressly set forth in the Confidential Information Agreement or as otherwise provided under applicable law. Nothing in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.
(j) Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.
(k) Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.
(l) Entire Agreement. This Agreement, together with the Exhibits, sets forth the complete and exclusive agreement and understanding of the Parties with regard to the subject matter hereof, and supersedes any and all prior or contemporaneous agreements, promises, representations, or communications, written or oral, pertaining to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement, and the invalid or unenforceable provision shall be modified to render it valid and enforceable consistent with the intent of the parties insofar as possible under applicable law. For purposes of construing this Agreement, any ambiguities shall not be construed against any party as the drafter. This Agreement may be executed in counterparts, which shall be deemed to be part of one original, and facsimile signatures shall be equivalent to original signatures. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws as set forth in Section 11(h) without regard to conflict of laws principles.
SIGNATURE PAGE FOLLOWS
14
IN WITNESS WHEREOF, the Parties have each duly executed this Agreement as of the Effective Date to indicate their understanding and acceptance of all of the above-stated terms and conditions.
| C OLDQUANTA I NCORPORATED D**/B/A** I NFLEQTION | |
|---|---|
| By: | /s/ Alok Gupta |
| Name: Alok Gupta | |
| Title: Chief Financial Officer | |
| EXECUTIVE | |
| /s/ Matthew Kinsella | |
| Matthew Kinsella |
[Signature Page to Employment Agreement (Matthew Kinsella)]
EXHIBIT A
Employee Confidential Information and Inventions Assignment Agreement
[attached separately]
A-1
EXHIBIT B
RELEASE
[To besigned within timing provided by the Company]
My employment with ColdQuanta Incorporated d/b/a Infleqtion (the “Company”) ended in all capacities on [•] (the “Separation Date”). I hereby confirm that I have been paid all compensation owed to me by the Company for all hours worked; I have received all the leave and leave benefits and protections for which I was eligible, pursuant to the Company’s policies, applicable law, or otherwise; and I have not suffered any on-the-job injury or illness for which I have not already filed a workers’ compensation claim.
If I choose to enter into this Release and allow it to become effective by its terms, the Company will provide me with certain severance benefits pursuant to the terms of the Employment Agreement between me and the Company dated [•], 2024 (the “Agreement”). I understand that I am not entitled to such severance benefits unless I return this fully-executed Release to the Company within [•] days after the Separation Date, and allow this Release to become fully effective and non-revocable by its terms. (Capitalized terms used but not defined in this Release shall have the meaning ascribed to them in the Agreement.)
In exchange for the severance benefits to which I would not otherwise be entitled, I hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, arising from or in any way related to events, acts, conduct, or omissions occurring prior to or at the time that I sign this Release, including but not limited to claims arising from or in any way related to my employment with the Company or the termination of that employment (collectively, the “Released Claims”), provided however that “Released Claims” does not include Excluded Claims (as defined below). By way of example, the Released claims include, but are not limited to: (1) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (2) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (3) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (4) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), Colorado state law, the California Labor Code (as amended), the California Family Rights Act, and the California Fair Employment and Housing Act (as amended). I acknowledge that I have been advised, as required by California Government Code Section 12964.5(b)(4), that I have the right to consult an attorney regarding this Release and that I was given a reasonable time period of notless than five business days in which to do so. I further acknowledge and agree that, in the event I sign this Release prior to the end of the reasonable time period provided by the Company, my decision to accept such shortening of time is knowing and voluntary and is not induced by the Company through fraud, misrepresentation, or a threat to withdraw or alter the offer prior to the expiration of the reasonable time period, or by providing different terms to employees who sign such an agreement prior to the expiration of the time period.
B-1
Section 1542 Waiver. In giving the release herein, which includes claims which may be unknown to me at present, I acknowledge that I have read and understand Section 1542 of the California Civil Code, which reads as follows: “A general release does not extend to claims that the creditor or releasing party does notknow or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any other jurisdiction of similar effect with respect to my release of claims herein, including but not limited to my release of unknown claims.
Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (a) any claims for breach of the Agreement arising after the date on which I sign this Release; (2) claims for reimbursement of properly incurred business expenses prior to and through the Separation Date which are submitted to the Company for reimbursement within thirty (30) days after the Separation Date; (3) all rights I have in respect of equity awards and Severance (as defined in the Agreement); (4) all claims for or rights to indemnification pursuant to the certificate of incorporation and bylaws of the Company, any indemnification agreement to which I am a party, any directors and officers insurance applicable to me or under applicable law; and (5) all claims which cannot be waived as a matter of law.
I agree not to disparage the Company, and its officers, directors, employees, shareholders and agents, in any manner likely to be harmful to them or their business, business reputation or personal reputation; provided that I may respond accurately to any inquiry or request for information when required by legal process. Notwithstanding the foregoing, nothing in this Release shall limit my right to voluntarily communicate with the Equal Employment Opportunity Commission, United States Department of Labor, the National Labor Relations Board, the Securities and Exchange Commission, other federal government agency or similar state or local agency or to discuss the terms and conditions of my employment with others to the extent expressly permitted by Section 7 of the National Labor Relations Act. Consistent with the Colorado Protecting Opportunities and Workers’ Rights Act (the “POWR Act”), if, after I enter into this Release, the Company disparages me, the Company may not seek to enforce this non-disparagement paragraph or seek damages for breach of this provision; provided, however, that all other provisions of this Release shall remain in full force and effect.
I acknowledge and agree that both during and after my employment I are obligated to refrain from any unauthorized use or disclosure of the Company’s proprietary or confidential information or materials.
I hereby certify that I have returned, without retaining any reproductions (in whole or in part), all information, materials and other property of the Company, including but not limited to any such information, materials or property contained on any personally-owned electronic or other storage device (such as computer, cellular phone, PDA, tablet or the like). I also represent that I have been paid all compensation owed and for all hours worked; I have received all the leave and leave benefits and protections for which I am eligible; and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.
B-2
Nothing in this Release has prevented, currently prevents, or shall prevent me from filing, cooperating with, or participating in any proceeding or investigation before the Equal Employment Opportunity Commission, United States Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal government agency, the California Department of Fair Employment and Housing, or similar state or local agency (“Government Agencies”), or exercising any rights pursuant to Section 7 of the National Labor Relations Act. Nothing in this Release prevents me from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that I have reason to believe is unlawful. Furthermore, consistent with Colorado law (including the POWR Act), nothing in this Release shall: (i) prohibit me from disclosing the underlying facts of any alleged discriminatory or unfair employment practice, including the existence and terms of this Release, to my immediate family members, religious advisor, medical or mental health provider, mental or behavioral health therapeutic group, legal counsel, financial advisor, or tax preparer; or (ii) prohibit me from disclosing the underlying facts of any alleged discriminatory or unfair employment practice to any government agency, including the existence and terms of this Release, or in response to a subpoena, without first notifying the Company. In addition, the disclosure of the underlying facts of any alleged discriminatory or unfair employment practice by the Company shall not constitute disparagement of the Company prohibited by this Release. I further understand this Release is not intended to and does not limit my ability to voluntarily communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. While this Release does not limit my right to receive an award for information provided to the Securities and Exchange Commission, I understand and agree that, I am otherwise waiving, to the fullest extent permitted by law, any and all rights I may have to individual relief based on any Released Claims and any rights I have waived by signing this Release. I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims that I have or might have against any of the parties released above that are not included in the Released Claims.
I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that the consideration given for this Release is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised, as required by the ADEA, that: (a) my waiver and release does not apply to any rights or claims that may arise after the date I sign this Release; (b) I have been advised that I have the right to consult with an attorney prior to executing this Release (although I may choose voluntarily not to do so); (c) I have been given at least [twenty-one (21) days/ forty-five (45) days (if applicable)] to consider this Release (although I may choose voluntarily to sign it earlier); (d) I have seven (7) days following my execution of this Release to revoke my acceptance of it (with such revocation to be delivered in writing to the Company within the 7-day revocation period); and (e) this Release will not be effective until the date upon which the revocation period has expired, which will be the eighth day after I sign it, provided I do not earlier revoke it.
B-3
This Release, together with the Agreement (including all Exhibits and documents incorporated therein by reference), constitutes the complete, final and exclusive embodiment of the entire agreement between me and the Company with regard to this subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained in the Release or the Agreement, and it entirely supersedes any other such promises, warranties or representations, whether oral or written.
[remainder of page intentionally left blank]
B-4
| Matthew Kinsella |
|---|
| [Date] |
POWR Act Addendum
ColdQuanta Incorporated d/b/a Infleqtion and Matthew Kinsella each acknowledge and agree that the foregoing Release complies with the requirements of the Colorado Protecting Opportunities and Workers’ Rights (POWR) Act.
| By: | ||
|---|---|---|
| Name: | Date | |
| Title: | ||
| Matthew Kinsella | Date |
B-5
COLDQUANTA, INC.
AMENDMENT TO
EMPLOYMENTAGREEMENT
THIS AMENDMENT TO EMPLOYMENTAGREEMENT is made as of June 24, 2024 (this “Amendment”), by and between COLD****QUANTA, INC., a Delaware corporation (the “Company”), and Matt Kinsella (“Employee”). Any capitalized terms not defined herein shall have the meanings set forth in the Employment Agreement (as defined below).
RECITALS
WHEREAS, the parties previously entered into that certain Employment Agreement, dated as of June 6, 2024, by and between the Company and Employee (the “Employment Agreement”); ****
WHEREAS, Section 11(e) of the Employment Agreement provides that the Employment Agreement may be amended with the written consent of the Company and Employee; and
WHEREAS, pursuant to Section 11(e) of the Employment Agreement, the parties desire to amend the Employment Agreement as provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing promises the parties hereto, intending to be legally bound, agree as follows:
**1. AMENDMENT TO SECTION 5(C)(2).**Section 5(c)(2) of the Employment Agreement is hereby amended and restated in its entirety to read as follows: ****
“(ii) Executive shall be granted at the closing of the Spin-Off, an option exercisable for a number of shares of the class of securities of Spin-Co (as defined below) issued to other holders of the Company equal to the product of (a) the percentage ownership of the Company held by Executive multiplied by (b) the number of shares of Spin-Co issued in the Spin-Off. The percentage of the Company owned by Executive shall be calculated on a fully-diluted basis treating (1) in the numerator, the Option “as-exercised” in determining Executive’s percentage ownership of the Company and (2) in the denominator assuming the conversion of all securities convertible into Common Stock and exercise of all outstanding options and warrants at the time of determination. In determining the number of shares of Spin-Co, all shares of Common Stock reserved and available for future grant under any Spin-Co incentive plan shall be included. The option for Spin-Co shares shall have an exercise price equal to 100% of fair market value per share of the securities issuable upon exercise and shall be vested to the extent that the Option is vested at such time and shall continue to vest in the same manner as the Option.”
2. MISCELLANEOUS.
2.1 Governing Law. This Amendment and any controversy arising out of or relating to this Amendment shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.
2.2 Continued Validity of the Employment Agreement. Except as specifically amended hereby, the Employment Agreement shall remain in full force and effect as originally constituted.
2.3 Successors andAssigns. Except as otherwise expressly provided herein, the terms and conditions of this Amendment shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors, assigns, heirs, executors and administrators.
2.4 Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature pages follow]
23.
IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT TO EMPLOYMENT AGREEMENT as of the date set forth in the first paragraph hereof.
| COMPANY: | |
|---|---|
| COLDQUANTA, INC. | |
| By: | /s/ Alok Gupta |
| Name: | Alok Gupta |
| Title: | Chief Financial Officer |
IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT EMPLOYMENT AGREEMENT as of the date set forth in the first paragraph hereof.
| EMPLOYEE: | |
|---|---|
| /s/ Matthew Kinsella | |
| Name: | Matthew Kinsella |
EX-10.12
Exhibit 10.12
April 9, 2021
Paul Lipman
1640 White Oak Way
San Carlos, CA 94070
Re: Employment Terms
Dear Paul:
COLDQUANTA, INC. (the “Company”) is pleased to offer you employment beginning on April 1, 2021 (the “Start Date”).
Position
Your initial position will be Chief Commercial Officer, responsible for performing such duties as are assigned to you from time to time, reporting to the Chief Executive Officer (“CEO”) or, if a CEO is not then serving, to the Chairman. You will work at your home office located at San Carlos, California. Of course, the Company may change your position, duties, and work location from time to time in its discretion.
Compensation and Benefits
Your initial base salary will be paid at the rate of $390,000 per year, less payroll deductions and withholdings, paid on the Company’s normal payroll schedule.
During your employment, you will be eligible to participate in the benefits plans offered to similarly situated employees by the Company from time to time, subject to plan terms and generally applicable Company policies. Currently, exempt employees do not accrue vacation. Supervisors will approve paid vacation requests based on the employee’s progress on work goals or milestones, status of projects, fairness to the working team, and productivity and efficiency of the employee. Since vacation is not allotted or accrued, there is no “unused” vacation time to be carried over from one year to the next nor paid out upon termination. A full description of current benefits is available for your review. The Company may change compensation and benefits from time to time in its discretion.
Annual Discretionary Bonus.
You will be eligible for a discretionary annual cash bonus with a target of fifty percent (50%) of your then current base salary, subject to review and adjustment from time to time by the Company in its sole discretion, payable subject to standard payroll withholding requirements (“Target Bonus”). Whether or not you earn any bonus will be dependent upon (a) the actual achievement by you and the Company of the applicable individual and corporate performance goals, as determined by the Board in its sole discretion, and (b) your continuous performance of services to the Company through the date any such bonus is paid. The bonus may be greater or lesser than the Target Bonus and may be zero. The annual period over which performance is measured for purposes of this bonus is January 1 through December 31; provided, that for calendar year 2021 any bonus will be prorated based on the number of days between the Start Date and December 31, 2021. The Board will determine in its sole discretion the extent to which you have achieved the performance goals upon which the bonus is based and the amount of the bonus, if any.
Equity
Subject to approval by the Company’s Board of Directors (the “Board”), the Company anticipates granting you an option to purchase 1,600,000 shares of the Company’s common stock at the fair market value as determined by the Board as of the date of grant (the “Option”). The anticipated Option will be governed by the terms and conditions of the Company’s 2017 Stock Incentive Plan (the “Plan”) and your grant agreement, and will include the following vesting schedule: 12/48ths of the total shares will vest on the one year anniversary of the vesting commencement date, and 1/48th of the total shares will vest each month thereafter on the same day of the month as the vesting commencement date (or if there is no corresponding day, on the last day of the month), subject to your continuous Service (as defined in the Plan) as of each such date. If a Series B Financing occurs and your service with the Company has not terminated as of, or immediately prior to, the effective time of the Series B Financing, then, as of the effective time of such Series B Financing, the vesting and exercisability of the Option will be accelerated to the extent of 25% of the total shares underlying the Option. For purposes of this letter, “Series B Financing” means public or private equity financings that close after the date of this letter with cumulative proceeds to Company of at least $100 million; provided that equity financings will not include conversion of convertible notes.
Confidential Information and Company Policies
As a Company employee, you will be expected to abide by Company rules and policies. As a condition of employment, you must sign and comply with the attached Employee Confidential Information and Inventions Assignment Agreement which prohibits unauthorized use or disclosure of the Company’s proprietary information, among other obligations.
By signing this letter you are representing that you have full authority to accept this position and perform the duties of the position without conflict with any other obligations and that you are not involved in any situation that might create, or appear to create, a conflict of interest with respect to your loyalty or duties to the Company. You specifically warrant that you are not subject to an employment agreement or restrictive covenant preventing full performance of your duties to the Company. You agree not to bring to the Company or use in the performance of your responsibilities at the Company any materials or documents of a former employer that are not generally available to the public, unless you have obtained express written authorization from the former employer for their possession and use. You also agree to honor all obligations to former employers during your employment with the Company.
At-Will Employment and Exempt Status
Your employment with the Company will be “at-will.” You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company. Likewise, the Company may terminate your employment at any time, with or without cause or advance notice. Your employment at-will status can only be modified in a written agreement signed by you and by an officer of the Company.
As an exempt salaried employee, you will be expected to work the Company’s normal business hours as well as additional hours as required by the nature of your work assignments, and you will not be eligible for overtime compensation.
Page 2
Conditions, Dispute Resolution, and Complete Agreement
This offer is contingent upon a satisfactory reference check and satisfactory proof of your right to work in the United States. If the Company informs you that you are required to complete a background check, this offer is contingent upon satisfactory clearance of such background check. You agree to assist as needed and to complete any documentation at the Company’s request to meet these conditions.
To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with the Company, you and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, your employment with the Company, or the termination of your employment, shall be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. § 1-16, to the fullest extent permitted by law, by final, binding and confidential arbitration conducted by JAMS or its successor, under JAMS’ then applicable rules and procedures for employment disputes before a single arbitrator (available upon request and also currently available at http://www.jamsadr.com/rules-employment-arbitration/). You acknowledge that by agreeing to this arbitration procedure, both you and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrativeproceeding. In addition, all claims, disputes, or causes of action under this section, whether by you or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration. This paragraph shall not apply to any action or claim that cannot be subject to mandatory arbitration as a matter of law, including, without limitation, claims brought pursuant to the California Private Attorneys General Act of 2004, as amended, the California Fair Employment and Housing Act, as amended, and the California Labor Code, as amended, to the extent such claims are not permitted by applicable law(s) to be submitted to mandatory arbitration and the applicable law(s) are not preempted by the Federal Arbitration Act or otherwise invalid (collectively, the “Excluded Claims”). In the event you intend to bring multiple claims, including one of the Excluded Claims listed above, the Excluded Claims may be filed with a court, while any other claims will remain subject to mandatory arbitration. You will have the right to be represented by legal counsel at any arbitration proceeding. Questions of whether a claim is subject to arbitration under this agreement shall be decided by the arbitrator. Likewise, procedural questions which grow out of the dispute and bear on the final disposition are also matters for the arbitrator. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written statement signed by the arbitrator regarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based. The arbitrator shall be authorized to award all relief that you or the Company would be entitled to seek in a court of law. The Company shall pay all JAMS arbitration fees in excess of the administrative fees that you would be required to pay if the dispute were decided in a court of law. Nothing in this letter agreement is intended to prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.
This letter, together with your Employee Confidential Information and Inventions Assignment Agreement, forms the complete and exclusive statement of your employment agreement with the Company. It supersedes any other agreements or promises made to you by anyone, whether oral or written. Changes in your employment terms, other than those changes expressly reserved to the Company’s discretion in this letter, require a written modification signed by an officer of the Company. If any provision of this offer letter agreement is determined to be invalid or unenforceable, in whole or in part, this determination shall
Page 3
not affect any other provision of this offer letter agreement and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible under applicable law. This letter may be delivered and executed via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and shall be deemed to have been duly and validly delivered and executed and be valid and effective for all purposes.
* * *
Please sign and date this letter, and the enclosed Employee Confidential Information and Inventions Assignment Agreement and return them to me by Monday, April 12, 2021, if you wish to accept employment at the Company under the terms described above.
We look forward to your favorable reply and to a productive and enjoyable work relationship.
| Sincerely, | |
|---|---|
| /s/ Rushton McGarr | |
| Rushton McGarr, CFO | |
| Understood and Accepted: | |
| --- | --- |
| /s/ Paul Lipman | 4/9/2021 |
| Paul Lipman | Date |
Attachment: Employee Confidential Information and Inventions Assignment Agreement
Page 4
EX-10.13
Exhibit 10.13
April 25, 2022
Pranav Gokhale
5346 S Cornell Ave, Apt 1404
Chicago, IL 60615
Dear Pranav:
We are pleased to offer you the position of Vice President of Quantum Software with ColdQuanta, Inc. (“ColdQuanta” or the “Company”) at the Chicago **** location, reporting to Paul Lipman. **** This position is considered exempt for purposes of United States federal wage-hour law, which means that you will not be eligible for overtime pay for hours worked over 40 in each week.
This offer is contingent upon the closing of a Merger Agreement between the Company and Super.tech Labs Inc. (the “Merger Agreement”). If the Merger Agreement does not close, this offer is void, you will not be employed by the Company, and the Company will have no further obligations to you. The date of the closing of the merger contemplated by the Merger Agreement is referred to as the “Merger Closing Date”.
ColdQuanta offers you the following:
| Compensation: | Bi-monthly pay of $8,333.33 (or $200,000 if annualized) |
|---|---|
| Stock Options: | 750,000 options will be recommended to ColdQuanta’s Board of Directors according to ColdQuanta’s Stock Incentive Plan. There will be a modification to the plan in that there will be a 2-year cliff associated with these options. After the 2-year cliff, the options will vest monthly over 2 years, covering the third and fourth years following the Merger<br>Closing Date. |
| Benefits: | You will be eligible to participate in ColdQuanta’s comprehensive benefits program starting June 1, 2022. Our Open Enrollment period will begin April 28, 2022. You will receive a benefits guide at that time, and<br>benefit elections will be effective June 1, 2022. You will also be eligible to participate in the ColdQuanta 401(k) program, subject to the terms of the plan. |
| Personal Time Off (PTO): | ColdQuanta offers an Unlimited Paid Time Off Program. Employees generally may take time off under this program for purposes including vacation, personal and family matters, illness, or other activities or engagements subject to the<br>limitations set forth in the handbook. |
| Bonus: | You will be eligible for a discretionary annual cash bonus with a target of twenty percent (20%) of your then current base salary, subject to review and adjustment from time to time by the Company in its sole discretion, payable<br>subject to standard payroll withholding requirements (“Target Bonus”). Whether or not you earn any bonus will be dependent upon (a) the actual achievement by you and the Company of the applicable individual and corporate performance<br>goals, as determined by the Board in its sole discretion, and (b) your |
| continuous performance of services to the Company through the date any such bonus is paid. The bonus may be greater or lesser than the Target Bonus and may be zero. The annual period over which performance is measured for purposes<br>of this bonus is January 1 through December 31; provided, that for calendar year 2022 any bonus will be prorated based on the number of days between the Start Date and December 31, 2022. The Board will determine in its sole discretion the<br>extent to which you have achieved the performance goals upon which the bonus is based and the amount of the bonus, if any. |
|---|
Your start date will be the Merger Closing Date. On your first day, please bring appropriate documentation as proof that you are presently eligible to work in the United States without sponsorship.
We are excited to welcome you to the ColdQuanta team! We recognize that you retain the option, as does the company, of ending your employment with the company at any time, with or without notice, and with or without Cause (as defined below); provided however that we may not terminate your employment except for Cause before the second anniversary of the Merger Closing Date.
The term “Cause” means any of the following events: (a) your breach of the material terms of any agreement between you and the Company; (b) your unauthorized use or disclosure of the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company; (c) your material failure to comply with the Company’s written policies or rules; (d) your conviction of, or your plea of “guilty”, “no contest/nolo contendere”, to a felony under the Federal or State laws of the United States; (e) your gross negligence or willful misconduct with regard to the Company that is materially injurious to the Company; (f) your continuing failure to perform assigned duties after receiving written notification of the failure from the Company’s Board of Directors; or (g) your failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers, or employees, if the Company has requested your cooperation; provided however than in the case of clauses (a) and (c), the Company provides you with written or email notice of breach or failure, as the case may be, and you are afforded a reasonable opportunity to cure.
As such, subject to the two preceding paragraphs, your employment with the Company is at-will, and neither this letter nor other oral or written representations may be considered a contract for any specific period. Employment is contingent upon completion of a background check and signing a confidentiality agreement.
If you wish to accept the offer, please sign in the space provided below and return it to me within seven days of receipt. **** Again, we look forward to you joining us at ColdQuanta. Should you have any questions, please do not hesitate to contact me. We look forward to your favorable reply!
| /s/ Kathy Crawford |
|---|
| Sincerely, |
| Kathy Crawford |
| Chief People Officer ColdQuanta, Inc. |
Your signature below shows that you have received, understand, and accept this offer.
| Signature: | /s/ Pranav Gokhale |
|---|---|
| Pranav Gokhale |
EX-10.14
Exhibit 10.14
INDEMNIFICATION AGREEMENT
This Indemnification Agreement is dated as of _________, 20[__] (this “Agreement”) and is between Infleqtion,Inc., a Delaware corporation (the “Company”), and [ Name ] (“Indemnitee”).
Background
The Company believes that in order to attract and retain highly competent persons to serve as directors or in other capacities, including as officers, it must provide such persons with adequate protection through indemnification against the risks of claims and actions against them arising out of their services to and activities on behalf of the Company.
The Company desires and has requested Indemnitee to serve as a director and/or officer of the Company and, in order to induce the Indemnitee to serve in such capacity, the Company is willing to grant the Indemnitee the indemnification provided for herein. Indemnitee is willing to so serve on the basis that such indemnification be provided.
The parties by this Agreement desire to set forth their agreement regarding indemnification and the advancement of expenses.
In consideration of Indemnitee’s service to the Company, the covenants and agreements set forth below and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. INDEMNIFICATION.
To the fullest extent permitted by the General Corporation Law of the State of Delaware (the “DGCL”):
(a) The Company shall indemnify Indemnitee if Indemnitee was or is made or is threatened to be made a party to, or is otherwise involved in, as a witness or otherwise, any threatened, pending or completed action, suit or proceeding (brought in the right of the Company or otherwise), whether civil, criminal, administrative, regulatory or investigative and whether formal or informal, including appeals, by reason of the fact that Indemnitee is or was or has agreed to serve as a director and/or officer of the Company, or, while serving in such capacity, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, fiduciary, partner or manager or similar capacity) of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in any such capacity, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement.
(b) The indemnification provided by this Section 1 shall be from and against all loss and liability suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding, including any appeals.
1
(c) If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of any expenses, losses, liabilities, judgments, fines and amounts paid in settlement incurred by Indemnitee, but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for such portion.
Section 2. ADVANCE PAYMENT OF EXPENSES. To the fullest extent permitted by the DGCL, expenses (including attorneys’ fees) incurred by Indemnitee in appearing at, participating in or defending any action, suit or proceeding or in connection with an enforcement action as contemplated by Section 3(e), shall be paid by the Company in advance of the final disposition of such action, suit or proceeding within 30 days after receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances (including any invoices received by Indemnitee, which invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) from time to time. The Indemnitee hereby undertakes to repay any amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee is not entitled under this Agreement to be indemnified by the Company in respect thereof. Such repayment obligation shall be unsecured and shall not bear interest. The Company shall not impose on Indemnitee additional conditions to advancement or require from Indemnitee additional undertakings regarding repayment other than the execution of this Agreement. The Company agrees that for the purposes of any advancement of expenses for which Indemnitee has made a written demand in accordance with this Agreement, all expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable shall be presumed conclusively to be reasonable. This Section 2 shall be subject to Section 3(b) and shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 6 and Section 7.
Section 3. PROCEDURE FOR INDEMNIFICATION; NOTIFICATIONAND DEFENSE OF CLAIM.
(a) Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company hereunder, notify the Company in writing of the commencement thereof. The failure to promptly notify the Company of the commencement of the action, suit or proceeding, or of Indemnitee’s request for indemnification, will not relieve the Company from any liability that it may have to Indemnitee hereunder, except to the extent the Company is actually and materially prejudiced in its defense of such action, suit or proceeding as a result of such failure. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request therefor including such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to enable the Company to determine whether and to what extent Indemnitee is entitled to indemnification.
(b) With respect to any action, suit or proceeding of which the Company is so notified as provided in this Agreement, the Company shall, subject to the last two sentences of this paragraph, be entitled to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any subsequently-incurred fees of separate counsel engaged by Indemnitee with respect to the same action, suit or proceeding unless the employment of separate counsel by Indemnitee has been previously authorized in writing by the Company. Notwithstanding the foregoing, if Indemnitee, based on the advice of his or her counsel, shall have reasonably concluded (with written notice being given to the Company setting forth the basis for such conclusion) that, in the conduct of any such defense, there is or is reasonably likely to be a conflict of interest or position between the Company and Indemnitee with respect to a significant issue, then the Company will not be entitled, without the written consent of Indemnitee, to assume such defense. In addition, the Company will not be entitled, without the written consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Company.
2
(c) To the fullest extent permitted by the DGCL, **** the Company’s assumption of the defense of an action, suit or proceeding in accordance with paragraph 3(b) will constitute an irrevocable acknowledgement by the Company that any loss and liability suffered by Indemnitee and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement by or for the account of Indemnitee incurred in connection therewith are indemnifiable by the Company under Section 1 of this Agreement.
(d) The determination whether to grant Indemnitee’s indemnification request shall be made promptly and in any event within 60 days following the Company’s receipt of a request for indemnification in accordance with Section 3(a). If the Company determines that Indemnitee is entitled to such indemnification or, as contemplated by paragraph 3(c) the Company has acknowledged such entitlement, the Company will make payment to Indemnitee of the indemnifiable amount within such 60 day period. If the Company is not deemed to have so acknowledged such entitlement or the Company’s determination of whether to grant Indemnitee’s indemnification request shall not have been made within such 60 day period, the requisite determination of entitlement to indemnification shall, subject to Section 6, nonetheless be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under the DGCL.
(e) In the event that (i) the Company determines in accordance with this Section 3 that Indemnitee is not entitled to indemnification, in whole or in part, under this Agreement, (ii) the Company fails to respond or make a determination of entitlement to indemnification within 30 days following receipt of a request for indemnification as described above, (iii) payment of indemnification is not made within such 30 day period, (iv) advancement of expenses is not timely made in accordance with Section 2, or (v) the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication in any court of competent jurisdiction of his or her entitlement to such indemnification or advancement of expenses. Indemnitee’s expenses (including attorneys’ fees) incurred in connection with successfully establishing Indemnitee’s right to indemnification or advancement of expenses, in whole or in part, in any such proceeding or otherwise shall also be indemnified by the Company to the fullest extent permitted by the DGCL.
(f) Indemnitee shall be presumed to be entitled to indemnification and advancement of expenses under this Agreement upon submission of a request therefor in accordance with Section 2 or Section 3 of this Agreement, as the case may be. The Company shall have the burden of proof in overcoming such presumption, and such presumption shall be used as a basis for a determination of entitlement to indemnification and advancement of expenses unless the Company overcomes such presumption by clear and convincing evidence.
3
Section 4. INSURANCE ANDSUBROGATION.
(a) The Company may purchase and maintain **** a policy or policies of insurance, providing Indemnitee with coverage for any liability asserted against, and incurred by, Indemnitee or on Indemnitee’s behalf by reason of the fact that Indemnitee is or was or has agreed to serve as a director and/or officer of the Company, or, while serving in such capacity, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, fiduciary, partner or manager or similar capacity) of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, or arising out of Indemnitee’s status as such, whether or not the Company would have the power to indemnify Indemnitee against such liability under the provisions of this Agreement. If the Company has such insurance in effect at the time the Company receives from Indemnitee any notice of the commencement of an action, suit or proceeding, the Company shall give prompt notice of the commencement of such action, suit or proceeding to the insurers in accordance with the procedures set forth in the policy. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policy.
(b) In the event of any payment by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy. Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Company shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.
(c) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines and amounts paid in settlement) if and to the extent that Indemnitee has otherwise actually received such payment under this Agreement or any insurance policy, contract, agreement or otherwise.
Section 5. CERTAIN DEFINITIONS**.** For purposes of this Agreement, the following definitions shall apply:
(a) The term “action, suit or proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action, suit, arbitration, alternative dispute mechanism or proceeding, whether civil, criminal, administrative or investigative.
(b) The term “by reason of the fact thatIndemnitee is or was or has agreed to serve as a director and/or officer of the Company, or, while serving in such capacity, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent (which, forpurposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise” shall be broadly construed and shall include, without limitation, any actual or alleged act or omission to act.
4
(c) The term “expenses” shall be broadly construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements, appeal bonds, other out-of-pocket costs and reasonable compensation for time spent by Indemnitee for which Indemnitee is not otherwise compensated by the Company or any third party), actually and reasonably incurred by Indemnitee in connection with either the investigation, defense or appeal of an action, suit or proceeding or establishing or enforcing a right to indemnification under this Agreement or otherwise incurred in connection with a claim that is indemnifiable hereunder.
(d) The term “judgments, fines and amounts paid in settlement” shall be broadly construed and shall include, without limitation, all direct and indirect payments of any type or nature whatsoever, as well as any penalties or excise taxes assessed on a person with respect to an employee benefit plan).
Section 6. LIMITATION ON INDEMNIFICATION**.** Notwithstanding any other provision herein to the contrary, the Company shall not be obligated pursuant to this Agreement:
(a) ClaimsInitiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to an action, suit or proceeding (or part thereof), however denominated, initiated by Indemnitee, except with respect to an action, suit or proceeding brought to establish or enforce a right to indemnification or advancement of expenses under this Agreement (which shall be governed by the provisions of Section 6(b) of this Agreement), unless such action, suit or proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Company (the “Board”).
(b) Action forIndemnification. To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, unless Indemnitee is successful in such action, suit or proceeding in establishing Indemnitee’s right, in whole or in part, to indemnification or advancement of expenses hereunder (in which case such indemnification or advancement shall be to the fullest extent permitted by the DGCL), or unless and to the extent that the court in such action, suit or proceeding shall determine that, despite Indemnitee’s failure to establish their right to indemnification, Indemnitee is entitled to indemnification for such expenses; provided, however, that nothing in this Section 6(b) is intended to limit the Company’s obligations with respect to the advancement of expenses to Indemnitee in connection with any such action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, as provided in Section 2 hereof.
(c) Certain Exchange Act Claims. To indemnify Indemnitee in connection with any action, suit or proceeding made against Indemnitee for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or similar provisions of state statutory law or common law, (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act) or (iii) any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the compensation committee of the Board, including but not limited to any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act.
5
(d) Fraud or Willful Misconduct. To indemnify Indemnitee on account of conduct by Indemnitee where such conduct has been determined by a final (not interlocutory) judgment or other adjudication of a court or arbitration or administrative body of competent jurisdiction as to which there is no further right or option of appeal or the time within which an appeal must be filed has expired without such filing to have been knowingly fraudulent or constitute willful misconduct.
(e) Prohibited by Law. To indemnify Indemnitee in any circumstance where such indemnification has been determined by a final (not interlocutory) judgment or other adjudication of a court or arbitration or administrative body of competent jurisdiction as to which there is no further right or option of appeal, or the time within which an appeal must be filed has expired without such filing having been made, to be prohibited by law.
Section 7. CERTAIN SETTLEMENTPROVISIONS**.** The Company shall have no obligation to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any action, suit or proceeding without the Company’s prior written consent. The Company shall not settle any action, suit or proceeding in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent. Neither the Company nor Indemnitee will unreasonably withhold his, her, its or their consent to any proposed settlement.
Section 8. SAVINGSCLAUSE**.** If any provision or provisions (or portion thereof) of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee if Indemnitee was or is made or is threatened to be made a party or is otherwise involved in any threatened, pending or completed action, suit or proceeding (brought in the right of the Company or otherwise), whether civil, criminal, administrative or investigative and whether formal or informal, including appeals, by reason of the fact that Indemnitee is or was or has agreed to serve as a director and/or officer of the Company, or, while serving in such capacity, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, from and against all loss and liability suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding, including any appeals, to the fullest extent permitted by any applicable portion of this Agreement that shall not have been invalidated.
Section 9. CONTRIBUTION**.** In order to provide for just and equitable contribution in circumstances in which the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event, the Company shall, to the fullest extent permitted by law, contribute to the payment of all of Indemnitee’s loss and liability suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement reasonably incurred by or on behalf of Indemnitee in connection with any action, suit or proceeding, including any appeals, in an amount that is just and equitable in the circumstances; provided that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to any limitation on indemnification set forth in Section 4(c), 6 (other than clause (e)) or 7 hereof. In determining the amount of such contribution, the Company agrees that Indemnitee’s relative fault shall not be considered except to the extent required by applicable law.
6
Section 10. FORM AND DELIVERYOF COMMUNICATIONS**.** All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand, upon receipt by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier, one day after deposit with such courier and with written verification of receipt, or (d) sent by email or facsimile transmission, with receipt of oral confirmation that such transmission has been received. Notice to the Company shall be directed to Infleqtion, Inc., Attention: Chief Legal Officer at legal@infleqtion.com. Notice to Indemnitee shall be directed to [XXXXXX], email: [XXX@XXX.com], **** facsimile: [(XXX)-XXX-XXXX].
Section 11. NONEXCLUSIVITY**.** The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may have under any provision of law, in any court in which a proceeding is brought, the Company’s certificate of incorporation or by-laws, other agreements or otherwise, and Indemnitee’s rights hereunder shall inure to the benefit of the heirs, executors and administrators of Indemnitee. No amendment or alteration of the Company’s certificate of incorporation or by-laws or any other agreement shall adversely affect the rights provided to Indemnitee under this Agreement.
Section 12. NO CONSTRUCTIONAS EMPLOYMENT AGREEMENT**.** Nothing contained herein shall be construed as giving Indemnitee any right to be retained as a director of the Company or in the employ of the Company. For the avoidance of doubt, the indemnification and advancement of expenses provided under this Agreement shall continue as to the Indemnitee even though Indemnitee may have ceased to be a director or officer of the Company.
Section 13. INTERPRETATION OF AGREEMENT**.** It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by the DGCL.
Section 14. ENTIRE AGREEMENT**.** This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are expressly superseded by this Agreement.
Section 15. MODIFICATION ANDWAIVER**.** No supplement, modification, waiver 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 deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. For the avoidance of doubt, this Agreement may not be terminated by the Company without Indemnitee’s prior written consent.
Section 16. SUCCESSOR ANDASSIGNS**.** All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by written agreement in form and substance reasonably 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.
7
Section 17. SERVICE OF PROCESSAND VENUE**.** 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 Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (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, (c) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably The Corporation Trust Company located at 1209 Orange Street, City of Wilmington, County of New Castle, Zip Code 19801 as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (d) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (e) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 18. GOVERNING LAW**.** This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. If a court of competent jurisdiction shall make a final determination that the provisions of the law of any state other than Delaware govern indemnification by the Company of Indemnitee, then the indemnification provided under this Agreement shall in all instances be enforceable to the fullest extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.
Section 19. COUNTERPARTS**.** This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.
Section 20. HEADINGS AND SECTIONREFERENCES**.** The section and subsection headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Section references are to this Agreement unless otherwise specified.
8
This Indemnification Agreement has been duly executed and delivered to be effective as of the date stated above.
| INFLEQTION, INC. |
|---|
| By |
| Name: |
| Title: |
| INDEMNITEE: |
| Name: |
9
EX-10.15
Exhibit 10.15
Certain identified information has been excluded from this exhibit both because it (i) is not material and (ii) is the type that the issuertreats as private or confidential. Brackets with triple asterisks denote omissions.
EXCLUSIVE LICENSE AGREEMENT
Parties to the Agreement: ColdQuanta, Inc. and the Regents of the University of Colorado, a body corporate
University Case Number: CU2675B, CU5477B and CU5478B
TABLE OF CONTENTS
| ARTICLE 1 | DEFINITIONS | 1 |
|---|---|---|
| ARTICLE 2 | GRANT AND RESERVATION OF RIGHTS | 6 |
| ARTICLE 3 | ECONOMIC CONSIDERATION | 9 |
| ARTICLE 4 | SUBLICENSING | 9 |
| ARTICLE 5 | ARTICLE 5 U.S. GOVERNMENT RIGHTS AND REQUIREMENTS | 11 |
| ARTICLE 6 | REPORTS, RECORDS, AND AUDITS | 11 |
| ARTICLE 7 | CONFIDENTIAL INFORMATION | 12 |
| ARTICLE 8 | EXPORT | 14 |
| ARTICLE 9 | PATENT PROSECUTION | 14 |
| ARTICLE 10 | PATENT ENFORCEMENT | 15 |
| ARTICLE 11 | WARRANTIES, INDEMNIFICATION, AND INSURANCE | 17 |
| ARTICLE 12 | DURATION, CONDITIONS, TERMINATION, AND CONVERSION | 20 |
| ARTICLE 13 | GENERAL | 22 |
| APPENDIX A: | SPECIFIC TERMS AND CONDITIONS | 28 |
| APPENDIX B: | DILIGENCE REPORT | 33 |
| APPENDIX C: | FORM OF ROYALTY REPORT | 35 |
| EXHIBIT D: | CU1833B-04 AGREEMENT | 36 |
-i-
This EXCLUSIVE LICENSE AGREEMENT is between the Regents of the University of Colorado, a body corporate, for the University of Colorado Boulder, having an office at 4845 Pearl East Circle, Suite 200, Boulder, Colorado 80301 (“University”) and ColdQuanta, Inc., a Colorado corporation having its principal office at 1600 Range Street, Suite 103, Boulder, CO 80301 (“Licensee”).
BACKGROUND
| 1. | University and Licensee are co-owners of the Licensed Patents<br>(“Licensed Patents” has the meaning assigned to it in Article 1) related to University Case Number(s) CU5477B and CU5478B. |
|---|---|
| 2. | University wants the invention(s) described in the Licensed Patents developed and marketed as soon as possible<br>so that the resulting products may be available for public use and benefit. |
| --- | --- |
| 3. | Licensee desires to license the Licensed Patents for the purpose of developing and commercializing products<br>covered by the Licensed Patents. |
| --- | --- |
| 4. | University and Licensee have previously entered into a non-exclusive<br>license agreement on February 2, 2012, as amended (“CU1833B-04 Agreement”) and attached to this Agreement as Appendix D. University and Licensee do not intend to amend or supersede the CU1833B-04 Agreement with this Agreement. |
| --- | --- |
| 5. | University and Licensee have previously entered into an exclusive software license agreement dated<br>October 29, 2010 (“Software License Agreement”), identified as CU Agreement No CU2675B-01, and University and Licensee intend to terminate and replace the Software License Agreement<br>with this Agreement. |
| --- | --- |
Accordingly, the parties agree as follows:
GENERAL TERMS AND CONDITIONS
Article 1 Definitions
1.1 Definitions. The terms defined in the Preamble above have their assigned meanings and the following terms, whether used in the singular or plural, have the meanings assigned to them.
| (a) | “Agreement” means this Exclusive License Agreement, as amended from time to time.<br> | |
|---|---|---|
| (b) | “CU1833B-04 Agreement” has the meaning assigned to<br>it in the Background. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 1 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (c) | “Derivative Work” means any work developed or made by either party which is a<br>“derivative work” of the Licensed Software as that term is defined under 17 U.S.C. § 101. | |
| --- | --- | |
| (d) | “Diligence Report” means the report described in Appendix B. | |
| --- | --- | |
| (e) | “Effective Date” means the date of last signature of the parties to this Agreement.<br> | |
| --- | --- | |
| (f) | “Fair Market Value” means the cash price that would be paid in an arm’s length<br>transaction between two unrelated parties. | |
| --- | --- | |
| (g) | “Field of Use” has the meaning assigned to it in Appendix A. | |
| --- | --- | |
| (h) | “Government Sales” means Net Sales made directly to the United States Government, excluding<br>sales in connection with any United States Government contract entered into prior to the Effective Date under which the University has been or will be compensated as a subcontractor. | |
| --- | --- | |
| (i) | “Improvement” means any invention the practice of which would also require the practice of a<br>Valid Claim and which is a modification of the inventions covered by a Valid Claim made solely by one or more of Dana Anderson and University researchers working in the laboratory, and under the supervision, of Dana Anderson at the University, so<br>long as Dana Anderson is an employee of University and is actively participating in Licensee as a consultant or board member, but not solely as a shareholder. | |
| --- | --- | |
| (j) | “Insolvency” means | |
| --- | --- | |
| (i) | having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide<br>dispute; | |
| --- | --- | |
| (ii) | being unable to pay debts as they become due; or | |
| --- | --- | |
| (iii) | being insolvent within the meaning of federal bankruptcy law. | |
| --- | --- | |
| (k) | “Jointly-Owned Licensed Patents” means | |
| --- | --- | |
| (i) | The United States and foreign patent(s), nonprovisional patent application(s) or provisional patent<br>applications listed in Appendix A, Section 1(a)(ii) “Jointly-Owned Licensed Patents,” the patents issued therefrom, including any reissues, reexaminations, extensions of such patents, and any registrations, supplementary<br>protection certificates and renewals of any such patents or patent applications, and all rights and priorities in any of the foregoing. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 2 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (ii) | All divisional and continuation patent applications that take priority from those patents and patent<br>applications listed in Appendix A, Section 1(a)(ii) “Jointly-Owned Licensed Patents,” and the patents issued therefrom, including any reissues, reexaminations, extensions of such patents, and any registrations, supplementary<br>protection certificates and renewals of any such patents or patent applications, and all rights and priorities in any of the foregoing. | |
| --- | --- | |
| (iii) | Claims of any<br>continuation-in-part applications that take priority from those patents and patent applications listed in (i) and (ii) and resulting patents to the extent they are<br>directed to subject matter described in the patents and patent applications listed in (i) and (ii), and any registrations, supplementary protection certificates and renewals of any such patents or patent applications, and all rights and<br>priorities in any of the foregoing. | |
| --- | --- | |
| (l) | “Licensed Patents” means the Jointly-Owned Licensed Patents. | |
| --- | --- | |
| (m) | “Licensed Product” means | |
| --- | --- | |
| (i) | any product, service, or process, or part thereof, the making, use, offer for sale, sale, importation or<br>rendering of which would infringe one or more Valid Claims in the country in which it is made, used, sold, offered for sale, imported, or rendered; or any product, or part thereof, that is manufactured, or any service, or part thereof, that is<br>rendered using a process that would infringe one or more Valid Claims in the country in which it is made, used, sold offered for sale, imported, or rendered. | |
| --- | --- | |
| (ii) | any product (or part thereof), method, service or process that contains or utilizes the Licensed Software or<br>University Created Derivative Work(s) (“Licensed Software Product”). | |
| --- | --- | |
| (n) | “Licensed Software” means the Computer Control Software for BEC experiments owned by<br>University as it existed and was described to University as of October 29, 2010, or, in other words, the effective date of the Software License Agreement. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 3 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (o) | “Net Sales” means the amount of gross revenue payable on sales or from practice of any<br>Licensed Product by or on behalf of Licensee or Sublicensees. Net Sales excludes the following items, but only to the extent they pertain to the sale or practice of Licensed Products, are included in gross revenue, are separately stated on purchase<br>orders, invoices, or other documents, and are reported on the relevant Royalty Report: | |
| --- | --- | |
| (i) | Customary trade, quantity, or cash discounts and non-affiliated<br>brokers’ or agents’ commissions actually allowed and taken. | |
| --- | --- | |
| (ii) | Amounts repaid or credited by reason of rejection or return. | |
| --- | --- | |
| (iii) | Taxes levied on, excise duties, and other governmental charges made as to production, sale, transportation,<br>delivery or use and paid by or on behalf of Licensee or Sublicensee, as applicable. | |
| --- | --- | |
| (iv) | Packing costs, insurance costs and freight out as to production, sale, transportation, delivery or use and paid<br>by or on behalf of Licensee or Sublicensee, as applicable. | |
| --- | --- |
Net Sales also includes the Fair Market Value of any non-cash consideration received by Licensee and Sublicensees, for the sale or other disposition of Licensed Products.
For the absence of doubt, where the sale is between Licensee and Sublicensees, Net Sales only includes the sale of Licensed Products where the purchaser is the end user, and, where such sales to Sublicensees are not final sales, Net Sales only includes the downstream sale to third party customers and distributors.
| (p) | “New Invention” means any invention in the field of ultra-cold matter and related devices<br>and applications made solely by one or more of Dana Anderson, in his laboratory at the University, and University researchers working in the laboratory, and under the supervision, of Dana Anderson at the University, so long as Dana Anderson is an<br>employee of University and is actively participating in Licensee as a consultant or board member, but not solely as a shareholder. | |
|---|---|---|
| (q) | “Non-Government Sales” means all Net Sales that are<br>not Government Sales. | |
| --- | --- | |
| (r) | “Notice Date” has the meaning assigned to it in Article 13.2. | |
| --- | --- | |
| (s) | “Option Period” has the meaning assigned to it in Article 2.4. | |
| --- | --- | |
| (t) | “Option Rights” has the meaning assigned to it in Article 2.4. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 4 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (u) | “Recipient” means a party who receives information from the other party to this Agreement.<br> | |
| --- | --- | |
| (v) | “Royalty Report” is included as Appendix C and described in Article 6.1.<br> | |
| --- | --- | |
| (w) | “Senior Executive” means a person with authority to contractually bind the party.<br> | |
| --- | --- | |
| (x) | “Software License Agreement” has the meaning assigned to it in the Background.<br> | |
| --- | --- | |
| (y) | “Sublicense” means a grant of rights by Licensee to a third party to make, have made, use,<br>sell, offer to sell, import, have imported, export, or have exported Licensed Product. | |
| --- | --- | |
| (z) | “Sublicensee” means the third party granted a Sublicense from Licensee.<br> | |
| --- | --- | |
| (aa) | “Sublicense Income” means all consideration received by Licensee from a third party as<br>consideration for the grant of a Sublicense or an option for a Sublicense. Such consideration includes any upfront, license initiation, or signing fees; license maintenance fees; milestone payments; unearned portion of any minimum annual royalty<br>payment; payments associated with an acquisition or liquidation of the assets of the Sublicensee that may be deferred or trailing payments; and the Fair Market Value of any equity and any other non-cash<br>consideration paid to Licensee for the Sublicense. | |
| --- | --- |
Sublicense Income excludes (i) sums received as royalties on Net Sales by the Sublicensees, such Net Sales being subject to the royalty on Net Sales in Appendix A, (ii) amounts paid for equity of Licensee up to and including its Fair Market Value, and (iii) payments for research and development of Licensed Products that do not exceed the actual cost of performing such research and development, where such actual costs for scientific consulting will reflect a commercially reasonable FTE charge, as separately reported and supported by appropriate documentation.
| (bb) | “Term” has the meaning assigned to it in Article 12.1. | |
|---|---|---|
| (cc) | “Territory” has the meaning assigned to it in Appendix A. | |
| --- | --- | |
| (dd) | “Third Party Software” means the [***] software application, made available by[***] as of<br>the Effective Date, which software application is required to run the Licensed Software. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 5 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (ee) | “University Created Derivative Works” means Derivative Work(s) created by employees of<br>University, or otherwise assignable to University and made, within three (3) years after the Effective Date. | |
| --- | --- | |
| (ff) | “University Indemnitees” includes the Regents of the University of Colorado, a body<br>corporate, its regents, employees, students, officers, agents, affiliates, representatives, and inventors. | |
| --- | --- | |
| (gg) | “Valid Claim” means a pending or issued and unexpired claim of a Licensed Patent so long as<br>the claim has not been irrevocably abandoned or declared to be invalid through no fault of Licensee in a non-appealable decision of a court or other government agency of competent jurisdiction.<br> | |
| --- | --- |
1.2 Other Definitional Provisions.
| (a) | All references to statutes and related regulations include: |
|---|---|
| (i) | any past and future amendments of those statutes and related regulations; and |
| --- | --- |
| (ii) | any successor statutes and related regulations. |
| --- | --- |
| (b) | The words “including,” “includes,” and “include” are deemed to be followed<br>by the words “without limitation.” |
| --- | --- |
1.3 All references to currency in this Agreement such as “Dollars” or “$” refer to the lawful currency of the United States of America.
Article 2 Grant and Reservationof Rights
2.1 Licenses. Subject to the terms and conditions of this Agreement, University hereby grants to Licensee, and Licensee hereby accepts,
| (a) | an exclusive license, subject to the rights of the federal government as set forth in Article 5 and the rights<br>reserved by University under Article 2.2, under the University’s rights to the Licensed Patents to make, have made, use, import, offer to sell, sell, render, and practice the Licensed Products in the Field(s) of Use and the Territory.<br> | |
|---|---|---|
| (b) | an exclusive license, subject to the rights of the federal government as set forth in Article 5 and the rights<br>reserved by University under Article 2.2, to (i) make Derivative Works and (ii) reproduce, sell, and distribute copies of the Licensed Software and Licensee-created Derivative Work(s) in object code or source code form in the Field of Use<br>and the Territory. For the purposes of this Article 2.1(b) only, | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 6 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| “Derivative Work” means a work based upon the Licensed Software, such as but not limited to a revision, modification, translation, abridgement, condensation, expansion,<br>collection, compilation, or any other form in which such Licensed Software may be recast, transformed or adapted. | ||
| --- | ||
| (c) | an exclusive license, subject to the rights of the federal government as set forth in Article 5 and the rights<br>reserved by University under Article 2.2, to reproduce, modify, distribute, transmit, create derivative works from, publicly display and publicly perform the University Created Derivative Works in order to make, have made, offer to sell, sell,<br>market, distribute, import and export Licensed Products, including any incorporated portion of the University Created Derivative Works in the Field of Use and Territory. | |
| --- | --- |
2.2 Reservation of Rights. The licenses granted under Article 2.1 are expressly made subject to: (a) University’s reservation, on behalf of itself, future not-for-profit employers of the inventors of the Licensed Patents, and all other not- for-profit academic and research institutions, of the right to practice the Licensed Products under the Licensed Patents for educational, research, clinical, or other non-commercial purposes, including industry sponsored research and (b) University’s reservation, on behalf of itself, future not-for-profit employers of the authors of the Licensed Software and University Created Derivative Works, and all other not-for-profit academic and research institutions, of the right to use, reproduce, distribute, transmit, create derivative work(s) from, publicly display and publicly perform the Licensed Software and University Created Derivative Works (and derivative works thereof) for educational, research, clinical, or other non- commercial purposes without any accounting to Licensee.
2.3 Limitation on Rights. This Agreement confers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of University other than the Licensed Patents, regardless of whether such patents are dominant or subordinate to the Licensed Patents.
2.4 Improvements. For a period of three (3) years from the Effective Date and unless this Agreement is earlier terminated, University hereby grants to Licensee an option to acquire an exclusive license, including the right to sublicense, in all Improvements, provided that University is not contractually precluded from granting such option (the “OptionRights”). For a period of three (3) years from the Effective Date and unless this Agreement is earlier terminated, University shall disclose each Improvement to Licensee in reasonable written detail after University’s Venture Partners office receives notification from the inventor of such Improvement. As to each such Improvement, the Option Rights terminate one- hundred and twenty (120) days from the date such written disclosure of such Improvement is provided to Licensee by University (the “Option Period”). At any
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 7 of 37 | CU Case Number CU5477B-01 |
|---|
time during the Option Period, Licensee may exercise its Option Rights to the Improvement by so notifying University in writing before the expiration of the Option Period. Each Improvement will be added to this Agreement by a written amendment, and Licensee shall reimburse University for any patent expenses previously incurred by the University associated with such Improvement. For the sake of clarity, any Licensed Products based on the Improvements added under this Agreement will be subject to the same obligations regarding the payment of royalties and milestones as any other Licensed Products but, other than reimbursement of patent expenses as provided in the preceding sentence, Licensee will owe no additional consideration in connection with any amendment to add an Improvement under this Agreement. In the event Licensee does not exercise its Option Rights to any Improvement during the Option Period, then neither party will be under any further obligation to the other with respect to that particular Improvement, and to the extent an Improvement is jointly owned by the parties, University may license its interest in the Improvement without any further accounting or notification to Licensee. In the event an Improvement under this Agreement would also be considered an Improvement under the CU1833B-04 Agreement, the Improvement will be added only under this Agreement and will not be deemed an Improvement under the CU1833B-04 Agreement.
2.5 New Inventions. For a period of three (3) years from the Effective Date, University shall disclose each New Invention to Licensee in reasonable written detail after University’s Venture Partners office receives a written disclosure of the New Invention from the inventor(s) of such New Invention, which disclosure will be treated as University’s confidential information under Article 7.
2.6 Derivative Works.
| (a) | Licensee Created Derivative Works. Licensee will own exclusively all elements of Derivative Works<br>created solely by Licensee and that are not Licensed Software. Licensee grants University a non-exclusive, worldwide, fully paid license to such elements of Derivative Works that are not Licensed Software, for<br>educational, research (including industry sponsored research), and other non-commercial purposes. | |
|---|---|---|
| (b) | University Created Derivative Works. University will own exclusively all University Created Derivative<br>Works. For three years from the Effective Date, University shall deliver to Licensee at least once per calendar year any University Created Derivative Works made and disclosed to Venture Partners during that year in source or non- machine language code form, as available. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 8 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
2.7 Third Party Software.
| (a) | Licensee shall not remove or modify the copyright, trademarks, or other proprietary notices and disclaimers<br>related to the Third Party Software as they may appear in the Licensed Software. |
|---|---|
| (b) | In order to use the Licensed Software, Licensee must maintain a valid license to the development version of the<br>Third Party Software for each computer on which the Licensed Software will be used. Licensee’s use of the Third Party Software is subject to the terms and conditions of the Third-Party Software provider. |
| --- | --- |
| (c) | Licensee shall distribute the Licensed Software and any Derivative Work in accordance with the terms and<br>conditions of the Third Party Software provider. |
| --- | --- |
Article 3 Economic Consideration
3.1 As consideration for the license and rights granted under this Agreement, Licensee shall pay to University the economic consideration specified in Appendix A.
Article 4 Sublicensing
4.1 Sublicenses Permitted. Licensee may grant Sublicenses under the rights granted in Article 2.
4.2 Sublicensee Royalties. Licensee shall do the following:
| (a) | Pay royalties on Net Sales by Sublicensees and on Sublicense Income as specified in Appendix A.<br> |
|---|---|
| (b) | Include in all Sublicense agreements royalty payment terms that are consistent with and do not conflict with<br>this Agreement. |
| --- | --- |
| (c) | Retain all responsibility for the performance of all Sublicensees under any Sublicense agreement as if the<br>performance were carried out by Licensee itself, including the payment to University of any Net Sales royalties, regardless of whether the Sublicensee pays Licensee. |
| --- | --- |
| (d) | Require payment of cash consideration only from Sublicensees unless University has expressly consented in<br>writing and in advance to other consideration. |
| --- | --- |
4.3 Required Provisions. Licensee shall include the following provisions for the benefit of University in all Sublicense agreements: Article 2.2 Reservation of Rights, Article 3 Economic Consideration, Article 5 U.S. Government Rights, Article 6 Reports, Records, and Audits (including University’s direct right to audit the Sublicensees), Article 8 Export, and Article 11 Warranties, Indemnification, and Insurance.
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 9 of 37 | CU Case Number CU5477B-01 |
|---|
4.4 Sublicensee Conduct. Licensee shall cause the Sublicensees to covenant to do the following:
| (a) | Not to further sublicense the Licensed Patents. |
|---|---|
| (b) | Submit to University and Licensee: |
| --- | --- |
| (i) | Diligence Reports including at least the same level of detail as set forth in Appendix B; and<br> |
| --- | --- |
| (ii) | Royalty Reports in the form set forth in Appendix C. |
| --- | --- |
| (c) | Agree to the equivalent of Article 7 Confidential Information and Article 13.14 Survival.<br> |
| --- | --- |
4.5 Termination of Licenses or Sublicense.
| (a) | Licensee shall cause all Sublicenses to be subject to the termination of this Agreement; provided, however,<br>that a Sublicense is not subject to the termination of this Agreement if Licensee and Sublicensee comply with Article 4.5(b) below. |
|---|---|
| (b) | Notwithstanding Article 4.5(a), in the event this Agreement is terminated pursuant to Articles 12.2, 12.3 or<br>12.5, Licensee and each Sublicensee may agree to assign the Sublicense to University so long as the Sublicensee complies with Article 4, the Sublicensee is not in breach of its Sublicense, and University is not obligated to incur any obligations or<br>make any representations or warranties in excess of those contained in this Agreement. |
| --- | --- |
| (c) | Licensee shall require the automatic termination of any Sublicense in the event the Sublicensee institutes a<br>legal action challenging the validity of any Licensed Patent. |
| --- | --- |
4.6 Copy of Sublicense. Licensee shall submit to University a copy of each fully executed Sublicense agreement and any amendments to Sublicense agreements entered into by Licensee under this Agreement. A copy of such Sublicense agreements and amendments must be received by University within 30 days of their execution.
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 10 of 37 | CU Case Number CU5477B-01 |
|---|
Article 5 Article 5 U.S. Government Rights and Requirements
5.1 The Bayh-Dole Act. This Agreement is subject to all of the terms and conditions of 35 U.S.C. §§ 200-212, (“The Bayh-Dole Act”) and 37 C.F.R. § 401. Accordingly, Licensee shall, and shall require the Sublicensees to, take all reasonable action necessary to enable University to satisfy its obligations under The Bayh-Dole Act including the use of commercially diligent efforts to cause any Licensed Products to be manufactured substantially in the United States. Licensee may obtain a waiver of this manufacturing requirement from the appropriate federal agency.
5.2 Licensed Software.
| (a) | Licensed Software. The Licensed Software was developed under a funding agreement(s) with the Government<br>of the United States of America. This Agreement is explicitly made subject to the Government’s rights and requirements under such agreement(s) and any applicable law or regulation. |
|---|---|
| (b) | University Created Derivative Works. University Created Derivative Works may be developed under a<br>funding agreement with the Government of the United States of America and may be subject to the terms and conditions of such funding agreement. This Agreement is explicitly made subject to the Government’s rights and requirements under any<br>such funding agreement and any applicable law or regulation. To the extent that there is a conflict between any such funding agreement or any applicable law or regulation and this Agreement, the terms of such Government agreement or applicable law<br>or regulation control. Licensee shall take all reasonable action necessary to enable University to satisfy its obligations with the Government relating to any University Created Derivative Works. |
| --- | --- |
Article 6 Reports, Records, and Audits
6.1 Reports. Licensee shall submit the following reports to University via email attachment and writing:
| (a) | Diligence Reports as set forth in Appendix B. |
|---|---|
| (b) | Quarterly Royalty Reports as set forth in Appendixes A and C for each calendar quarter regardless of any Net<br>Sales beginning in the calendar quarter of the first commercial sale. |
| --- | --- |
If the first reporting period is not a complete year or quarter, Licensee shall, or shall cause each Sublicensee to, report partial periods.
6.2 Records. Licensee shall do the following:
| (a) | Keep accurate records and cause all Sublicensees to keep accurate records in sufficient detail to reflect its<br>operations under this Agreement and to enable the royalties accrued and payable under this Agreement to be determined. | |
|---|---|---|
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 11 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (b) | Retain the records for at least three years after the close of the period to which they pertain, or for such<br>longer time as may be required to resolve any question or discrepancy raised by University. | |
| --- | --- |
6.3 Audit byUniversity.
| (a) | Upon the request of University, with reasonable notice, but not more frequently than once a calendar year,<br>Licensee shall permit an independent public accountant selected and paid by University to have access during regular business hours to records, reports and other information relating to any Sublicense or this Agreement as may be necessary to verify<br>the accuracy of payments made or payable under this Agreement. |
|---|---|
| (b) | The accountant will disclose information it acquires through such audit to University only to the extent that<br>it should properly have been contained in the Royalty Reports required under this Agreement, it shows compliance or noncompliance by Licensee with the terms and conditions of this Agreement, or the accountant believes it materially relates to<br>Article 6 of this Agreement. |
| --- | --- |
| (c) | If an inspection or audit shows an underreporting or underpayment in excess of [***], then Licensee shall,<br>within sixty (60) days of its receipt of the results of the inspection or audit, reimburse University for the cost of the inspection or audit and pay the amount of the underpayment including any interest as required by this Agreement.<br> |
| --- | --- |
6.4 Licensee Self-Audit. Licensee shall conduct, at its sole expense, an independent audit of sales and royalties owed under this Agreement at least every 2 calendar years beginning in the calendar year that annual sales of Licensed Product are over [***]. The audit will address, at a minimum, the amount of gross sales by or on behalf of Licensee and Sublicensees during the audit period, the amount of funds owed to University under this Agreement, and whether the amount owed has been paid to University and is reflected in the records of Licensee. Licensee shall submit the auditor’s report promptly to University upon completion.
Article 7 Confidential Information
7.1 Responsibilities. The parties shall protect all confidential information disclosed by the other party under this Agreement from disclosure to third parties using the same degree of care that the Recipient uses to protect its own confidential and proprietary information, but no less than a reasonable degree of care, and in accordance with this Article 7.1. The parties shall not make
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 12 of 37 | CU Case Number CU5477B-01 |
|---|
disclosures of the other party’s confidential information without the written permission of the other party. To protect University confidential information, Licensee shall adopt security measures commonly observed in industries that rely on confidential information. These measures include restricted access to such information and the selective destruction of sensitive materials. The obligations under this Article 7 will expire 5 years after the termination or expiration of this Agreement.
7.2 Ownership. All written documents containing confidential information and other material in tangible form received by the Recipient under this Agreement remains the property of the disclosing party. Upon request of the disclosing party, the Recipient shall return such documents to the disclosing party or provide evidence of their destruction.
7.3 Future Information and Inventions. All invention disclosures, scientific data, diligence reports, and proprietary business information disclosed by either party including the Sublicensees under this Agreement are considered confidential information of the disclosing party.
7.4 Exceptions. Confidential information does not include the following:
| (a) | Information that, at the time of disclosure, had been previously published or was otherwise publicly available<br>through no fault of Recipient. |
|---|---|
| (b) | Information that becomes public knowledge after disclosure unless such knowledge results from a breach of this<br>Agreement. |
| --- | --- |
| (c) | Information that was already in Recipient’s possession prior to the time of disclosure as evidenced by<br>written records kept in the ordinary course of business or by proof of actual use. |
| --- | --- |
| (d) | Information that is independently developed without use of the confidential information. |
| --- | --- |
| (e) | Information that is required to be disclosed by law, court order, or government regulation.<br> |
| --- | --- |
7.5 CORA. University is subject to the Colorado Open Records Act, C.R.S. §§ 24-72-201, et seq. (CORA). All plans and reports marked “Confidential” by Licensee shall be treated by University as confidential to the extent permitted under § 24-72-204. Certain categories of information, including trade secrets and information implicating legal privileges, are not required to be released in response to requests for information under CORA.
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 13 of 37 | CU Case Number CU5477B-01 |
|---|
Article 8 Export
8.1 Export Compliance. Licensee shall, and shall require the Sublicensees to, comply with all applicable United States laws and regulations controlling the export of licensed commodities and technical data relating to this Agreement. (For the purpose of this paragraph, “technical data” means tangible or intangible technical information that is subject to U.S. export regulations, including blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions and “licensed commodities” means any article, material or supply but does not include information.) Among other things, these laws and regulations may prohibit or require a license for the export or retransfer of certain commodities and technical data to specified countries, entities and persons. Licensee understands that it may be held responsible for any violation of such laws and regulations by itself or any Sublicensee.
8.2 Applicable Laws. Applicable laws and regulations may include but are not limited to the Export Administration Regulations (15 CFR 730-774), the International Traffic in Arms Regulations (22 CFR 120-130), and the economic sanctions regulations administered by the U.S. Department of the Treasury (31 CFR 500-600).
8.3 Termination for Violation of Export Control Laws. University may terminate this Agreement under Article 12.3(d) if Licensee is determined or found by any United States regulatory authority to have violated any of the United States export control laws or regulations related to this Agreement.
Article 9 Patent Prosecution
9.1 Licensee’s Responsibilities. Licensee shall assume primary responsibility for preparing, filing, prosecuting and maintaining patent claims of appropriate scope (e.g., including both broad claims and claims directed to commercial embodiments) for the Jointly-Owned Licensed Patents (including any interference or reexamination actions) for University’s and Licensee’s benefit. Licensee shall engage one or more patent counsel in independent practice to prepare, file, prosecute, and maintain the Licensed Patents, and within 30 days of the Effective Date, Licensee shall provide University written notice of the name of Licensee’s patent counsel and a copy of the engagement letter with patent counsel. Licensee shall inform University before transferring legal representation related to the Licensed Patents to other counsel. Further, Licensee shall assume primary responsibility for all patent activities, including all costs, associated with the preparation, filing, prosecution, and maintenance of the Licensed Patents. Licensee shall, or shall instruct its patent counsel to, provide University with (i) copies of all official documents and correspondence relating to the inventorship, prosecution, maintenance, and validity of the Licensed Patents received from the relevant government patent office promptly after receipt and (ii) copies of all official documents and correspondence relating to the inventorship, prosecution, maintenance, and validity of the Licensed Patents prior to the filing of such
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 14 of 37 | CU Case Number CU5477B-01 |
|---|
documents sufficiently in advance of any due date to allow University to review and provide comments. Licensee shall provide sufficient notice and describe the proposed action to University before taking any substantive actions in prosecuting the claims, and, for the Jointly-Owned Licensed Patents, Licensee shall reasonably consider any feedback provided by University. To aid Licensee in this process, University shall provide information, execute and deliver documents and do other acts as Licensee may occasionally reasonably request. Licensee shall reimburse University for University’s reasonable costs in complying with such requests. Licensee may not abandon prosecution or maintenance of any patent application or patent within the Licensed Patents without first notifying University of Licensee’s intention and reason therefor at least 90 days prior to any bar date and providing University with reasonable opportunity to assume responsibility for prosecution and maintenance of such patent applications and patents.
9.2 On-Going Patent Prosecution. If Licensee does not pursue patents in the U.S. or a foreign jurisdiction where patent protection may be available, Licensee shall notify University 90 days prior to any patent prosecution bar date in the U.S. or foreign jurisdiction so that University may prosecute patents in that jurisdiction if University desires. If University pursues such U.S. or foreign patent protection, then from that time forward all such patent applications and any patents arising therefrom will not be considered Licensed Patents under this Agreement and Licensee forfeits all rights under this Agreement to such patent applications and any patents arising therefrom. University is responsible for all costs associated with those patent applications and patents it decides to pursue and maintain.
9.3 IntellectualProperty Management Plan. In the event this Agreement is terminated pursuant to Article 12 of this Agreement or the exclusive license granted until Article 2.1(a) is converted to a non-exclusive license pursuant to Article 12.4 of this Agreement, Licensee or any successor in interest under relevant Jointly Owned Licensed Patents as applicable, shall meet with University to negotiate, in good faith, an intellectual property management plan for the continued prosecution of the Jointly-Owned Licensed Patents.
Article 10 Patent Enforcement
10.1 Notice of Infringement. University and Licensee shall each inform the other party promptly in writing of any suspected infringement of the Licensed Patents by a third party. The parties shall include in the notice all evidence of infringement possessed by the suspecting party. Upon such notice and before proceeding with any action (e.g., cease and desist notice), the parties shall consult with each other.
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 15 of 37 | CU Case Number CU5477B-01 |
|---|
10.2 Licensee’s Right To Institute Suit. Licensee has the first right to institute suit to enforce the Licensed Patents based on any suspected infringement of the Licensed Patents. University may be named as a party plaintiff only if:
| (a) | Such action is necessary to achieve standing; |
|---|---|
| (b) | University is not the first named party in the action; and |
| --- | --- |
| (c) | The pleadings and any public statements about the action state that Licensee is pursuing the action and that<br>Licensee has the right to join University as a party. |
| --- | --- |
Licensee shall keep University reasonably apprised of the status and progress of any litigation. Licensee shall bear the entire cost of such litigation. Any recovery or settlement in excess of reasonable attorney’s fees for outside counsel and court costs incurred in litigation related to patent enforcement shall be shared [***] between Licensee and University, respectively. If University is named as a party plaintiff in an enforcement action under this Article 10.2, University, at its option, may be represented by separate counsel of its own selection, the fees for which shall be paid by University.
10.3 Joint Suit. If University and Licensee agree to institute suit jointly to enforce the Licensed Patents, the suit shall be brought in both their names, the out- of-pocket costs thereof shall be borne equally, and any recovery or settlement shall be shared equally. University and Licensee will agree to the manner in which they will exercise control over such suit. Each party, at its option, may be represented by separate counsel of its own selection, the fees for which shall be paid by each such party. If Licensee names University as a party plaintiff under Article 10.2, such a suit is not a joint suit under this Article 10.3.
10.4 University Suit. In the absence of a Licensee suit pursuant to Article 10.2 or absent an agreement to institute a suit jointly under Article 10.3, University may institute suit to enforce the Licensed Patents. Licensee may be joined as a party plaintiff and shall give University reasonable assistance and authority to file and prosecute the suit. If University decides to institute suit, it shall provide written notice to Licensee within 90 days of the date when it receives notice that Licensee will not institute suit. If within 15 days of such notice, Licensee does not notify University in writing that it will jointly prosecute the suit under Article 10.3, Licensee shall assign and hereby does assign to the University all rights, causes of action, and damages resulting from the alleged infringement. During such action Licensee may not grant Sublicenses without University’s permission, and University has full authority to settle on such terms as University determines. University shall bear the entire cost of the litigation and will retain the entire amount of any recovery or settlement. Licensee hereby waives any claim to any recovery or settlement obtained by University.
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 16 of 37 | CU Case Number CU5477B-01 |
|---|
Article 11 Warranties, Indemnification, and Insurance
11.1 Disclaimer of Warranties.
| (a) | UNIVERSITY MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND ASSUMES<br>NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO USE, SALE, OR OTHER DISPOSITION BY LICENSEE OR ITS SUBLICENSEE(S) OR VENDEES OR OTHER TRANSFEREES OF LICENSED PRODUCTS OR ANY OTHER PRODUCTS OR PROCESSES INCORPORATING OR MADE BY USE OF THE LICENSED<br>PATENTS, LICENSED SOFTWARE, OR UNIVERSITY CREATED DERIVATIVE WORKS. | |
|---|---|---|
| (b) | THERE ARE NO EXPRESS OR IMPLIED WARRANTIES, AND NO INVESTIGATION HAS BEEN MADE, OF MERCHANTABILITY OR FITNESS<br>FOR A PARTICULAR PURPOSE, OR THAT THE USE OR SALE OF LICENSED PRODUCTS OR ANY OTHER PRODUCTS, PROCESSES, OR SERVICES INCORPORATING OR MADE OR RENDERED BY USE OF THE LICENSED PATENTS, LICENSED SOFTWARE, OR UNIVERSITY CREATED DERIVATIVE WORKS WILL NOT<br>INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, SERVICE MARK, OR OTHER RIGHTS. | |
| --- | --- | |
| (c) | Third Party Software. Licensee’s access and use of the Third Party Software is subject to the<br>terms and conditions of the Third Party Software provider. UNIVERSITY MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH THE RESPECT TO USE, INABILITY TO USE, OR<br>THE RESULTS OF USE, OF THE THIRD PARTY SOFTWARE. | |
| --- | --- | |
| (d) | Nothing in this Agreement may be construed as: | |
| --- | --- | |
| (i) | a warranty or representation by University as to the validity or scope of any of the rights included in the<br>Licensed Patents, Licensed Software, or University Created Derivative Works; | |
| --- | --- | |
| (ii) | a warranty or representation that the Licensed Patents , Licensed Software, University Created Derivative<br>Works, or anything made, used, sold or otherwise disposed of or rendered under this Agreement will or will not infringe patents, copyrights or other rights; | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 17 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (iii) | an obligation to furnish any know-how not agreed to in this Agreement<br>or to provide any services other than those specified in this Agreement, or | |
| --- | --- | |
| (iv) | an obligation by University to bring or prosecute actions or suits against third parties for infringement.<br> | |
| --- | --- | |
| (e) | Licensed Software is provided by University without any obligation to provide technical support, telephone,<br>email or otherwise, including but not limited to modifications, improvements, customizations, patches, bug fixes. Licensee is solely responsible for obtaining any technical support for itself and its end users. | |
| --- | --- |
11.2 Indemnification. Licensee shall indemnify, defend, and hold University Indemnitees harmless from and against all liability, demands, damages, losses, and expenses (including attorney fees and other costs and expenses of litigation), for death, personal injury, illness, property damage, noncompliance with applicable laws and any other claim, proceeding, demand, expense and liability of any kind whatsoever in connection with or arising out of any of the following:
| (a) | The use by or on behalf of Licensee, any Sublicensees, or their respective directors, officers, employees, or<br>third parties (including the end users of Licensed Products) of any Licensed Patents, Licensed Software, or University Created Derivative Works; | |
|---|---|---|
| (b) | The design, manufacture, production, distribution, importation, exportation, advertisement, consumption, sale,<br>lease, sublicense or use of any Licensed Products by Licensee, or other products or processes developed in connection with or arising out of the Licensed Patents, Licensed Software, or University Created Derivative Works; or | |
| --- | --- | |
| (c) | For the consequences of any violation by Licensee or any Sublicensee of any applicable export control laws or<br>regulations relating to this Agreement. | |
| --- | --- | |
| (d) | Any right or obligation of Licensee or Sublicensee under this Agreement. | |
| --- | --- | |
| (e) | Defense of University. | |
| --- | --- | |
| (i) | Colo. Rev. Stat.<br>Section 23-20-110 states that the Colorado Attorney General, acting through University’s Office of University Counsel, must represent University in all<br>actions. Licensee shall, at its own expense, provide attorneys reasonably acceptable to the Colorado Attorney General to defend against any actions brought or filed against any University Indemnitee hereunder with respect to the subject of indemnity<br>contained herein, whether or not such actions are rightfully brought (any such action a “Claim”). | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 18 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (ii) | In the event the Colorado Attorney General does not agree to legal counsel selected by Licensee, the Colorado<br>Attorney General will represent University and University shall pay for its own representation. | |
| --- | --- | |
| (iii) | Neither Licensee nor University may settle a Claim without the prior written consent of the other, which<br>consent shall not be unreasonably withheld. Licensee may take control of the defense of such Claim with counsel of its choice; provided, however, that: | |
| --- | --- | |
| (A) | University at its own expense may participate and appear (on an equal footing) with Licensee in the defense of<br>the Claim, | |
| --- | --- | |
| (B) | University may undertake and control such defense in the event of the material failure of Licensee to undertake<br>and control the same. | |
| --- | --- |
11.3 Insurance. Licensee represents and warrants that it now maintains and shall continue to maintain comprehensive general liability insurance, including product liability insurance to the extent available on commercially reasonable terms, and any other insurance customary in the industry, and that such insurance coverage lists the University Indemnitees as additional insureds. Licensee’s insurance shall be primary coverage; any insurance that University may purchase is excess and noncontributory. Licensee’s insurance shall be written to cover claims incurred, discovered, manifested, or made during or after the expiration of this Agreement. Within 90 days after the execution of this Agreement and thereafter on University’s request, Licensee shall present evidence to University that the coverage is maintained with the University Indemnitees listed as additional insureds. In addition, Licensee shall provide University with at least 30 days prior written notice of any change in or cancellation of insurance coverage. Licensee shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during:
| (a) | The period that any Licensed Product is being commercially distributed or sold by Licensee, an agent of<br>Licensee, or a Sublicensee; and | |
|---|---|---|
| (b) | A reasonable period after the period referred to in (a) above, which in no event will be less than [***].<br> | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 19 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
Article 12 Duration, Conditions, Termination, and Conversion
12.1 Term. This Agreement is effective as of the Effective Date and expires on the expiration date of the last-to-expire patent or last-to-be-abandoned patent application within the Licensed Patents, whichever is later, unless earlier terminated pursuant to Article 12.2, 12.3, or 12.5.
12.2 Termination of Agreement by Licensee. Licensee may terminate this Agreement at any time on 60 days prior written notice to University, if Licensee does all of the following:
| (a) | Pays all amounts due as well as all non-cancelable costs to University<br>through the termination date. |
|---|---|
| (b) | Submits final payments as provided in Appendix A and a final report of the type described in Article 6 Reports,<br>Records and Audits. |
| --- | --- |
| (c) | Returns any confidential information provided to Licensee by University in connection with this Agreement.<br> |
| --- | --- |
| (d) | Suspends its use and sales of the Licensed Software Products; provided however, that subject to making the<br>payments required by Article 3 and the reports required by Article 6, Licensee may, for a period of [***] after the effective date of such termination, sell any Licensed Software Products that are incorporated in Licensed Products that are in<br>inventory. |
| --- | --- |
12.3 Termination by University. University may terminate this Agreement if Licensee does and fails to cure, within [***] (or [***] in the case of delinquent payment) of written notice, any of the following:
| (a) | Is delinquent on any report or payment that is not in dispute. | |
|---|---|---|
| (b) | Is in breach of the diligence obligations described in Appendix A, including the milestone requirements and<br>such missed milestone is not otherwise excused pursuant to the terms of this Agreement. | |
| --- | --- | |
| (c) | Provides any false report, as determined between the parties pursuant to Article 13.9(a) of this Agreement, or<br>is in breach of any other material provision of this Agreement. | |
| --- | --- | |
| (d) | Violates any laws or regulations of applicable governmental entities that have a material adverse effect on the<br> | |
| --- | --- | |
| (i) | University; or, | |
| --- | --- | |
| (ii) | Licensee’s ability to perform its obligations under this Agreement. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 20 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (e) | Ceases to carry on development activities pertaining to the Licensed Patents. | |
| --- | --- | |
| (f) | Institutes a legal action challenging the validity of any Licensed Patent. | |
| --- | --- | |
| (g) | Fails to maintain insurance as provided for in Article 11. | |
| --- | --- |
12.4 Conversion to Non-Exclusive License. University may at its reasonable discretion convert the license under Article 2.1(a) to a non-exclusive license if Licensee does any of the following:
| (a) | Ceases to continue operating its material business. |
|---|---|
| (b) | Does not use commercially reasonable efforts to develop the Licensed Patents including efforts consistent with<br>the diligence milestones and obligations in Appendix A. |
| --- | --- |
| (c) | After beginning commercial sales of the Licensed Products stops selling any Licensed Product for two<br>consecutive calendar quarters, except where a Sublicensee is selling Licensed Products or where such discontinuation of sales is due to a force majeure event or other circumstances beyond the Licensee’s reasonable control, such as action of<br>regulatory authorities or a supply or manufacturing interruption, and Licensee notifies University promptly in the event such circumstances arise, giving an indication of the likely extent and duration thereof, and uses commercially reasonable<br>efforts to resume commercial sales as soon as practicable. |
| --- | --- |
12.5 Automatic Termination. This Agreement immediately terminates in the event that:
| (a) | Licensee seeks liquidation, reorganization, dissolution or winding-up<br>of itself, is insolvent or evidence exists as to its Insolvency, or Licensee makes any general assignment for the benefit of its creditors; | |
|---|---|---|
| (b) | A petition is filed by or against Licensee, or any proceeding is initiated by or against Licensee, or any<br>proceeding is initiated against Licensee as a debtor, under any bankruptcy or insolvency law, unless the laws then in effect void the effectiveness of this provision or unless any such action filed or initiated against Licensee is dismissed within<br>[***]; | |
| --- | --- | |
| (c) | A receiver, trustee, or any similar officer is appointed to take possession, custody, or control of all or any<br>part of Licensee’s assets or property; or | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 21 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (d) | Licensee adopts any resolution of its Board of Directors or stockholders for the purpose of effecting any of<br>the foregoing. | |
| --- | --- |
In the case of a bankruptcy, this Agreement does NOT pass to a trustee in bankruptcy nor may the Agreement be held as an asset of said bankrupt.
12.6 Data and Regulatory Filings. In the event of an early termination of this Agreement under this Article 12, Licensee shall promptly, but no less than 30 days after the effective date of termination, provide to University a copy of any and all data, results, and technical information and all documents and other materials filed by or on behalf of Licensee with any U.S. or foreign government agency, made, developed, or obtained by Licensee during the term of this Agreement and directly related to the Licensed Patents or Licensed Products. University may use, reference, cross-reference, review, have access to, and incorporate any of the foregoing documents and information for any purpose including sharing with third parties, provided that any such information that is marked confidential and that is not directly related to the Licensed Patents or Licensed Products shall be treated as confidential information of Licensee. University recognizes that portions of filings made by a Sublicensee using Licensed Products or Licensed Patents may contain Sublicensee’s confidential and proprietary information that is unrelated to Licensed Products or Licensed Patents, and nothing in this Agreement grants University any rights related to such information, nor obligates Licensee or Sublicensee to disclose such information.
12.7 Survival. The provisions of Articles 3 Economic Consideration; 6 Reports, Records, and Audits; 7 Confidential Information; 11 Warranties, Indemnification, and Insurance; 12.2(d); 12.6 Data and Regulatory Filings; 13.4 Use of Names and Marks; 13.8 Choice of Law; 13.9 Dispute Resolution; 13.10 Merger and Modification of Agreement; 13.11 Severability; 13.13 Preservation of Immunity; 13.14 Headings; 13.16 Survival; Appendix A, Section 2 Financial Conditions; and any other provision of this Agreement that by its nature is intended to survive, will survive any termination or expiration of this Agreement.
Article 13 General
13.1 Assignment. This Agreement is binding upon and inures to the benefit of the respective successors and permitted assigns of the parties to this Agreement.
| (a) | Assignment by Licensee. Subject to Articles 13.1 (b) and (c), Licensee may assign this Agreement as part<br>of a sale of Licensee’s entire business, regardless of whether such a sale occurs through an asset sale, stock sale, merger or other combination. | |
|---|---|---|
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 22 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (b) | Conditions of Assignment. Prior to any assignment, the following conditions must be met:<br>(i) Licensee must provide University 10 days prior written notice of the assignment, including the new assignee’s contact information; and (ii) the new assignee must agree in writing with University to be bound by this Agreement.<br> | |
| --- | --- | |
| (c) | Bankruptcy Petition. In the event Licensee informs University that Licensee is considering filing a<br>bankruptcy petition, Licensee may assign this Agreement if University determines in its sole discretion that the party has provided or can provide adequate assurance of future performance, including diligent development and sales, of the Licensed<br>Patents. | |
| --- | --- | |
| (d) | Any Other Assignment by Licensee. Any other attempt by Licensee to assign this Agreement or any of<br>Licensee’s rights under this Agreement, or to delegate any of Licensee’s obligations under this Agreement, is null and void. | |
| --- | --- |
13.2 General Notice. Notice under this Agreement is sufficiently given and effective upon
| (a) | the date of delivery if delivered in person, or national overnight delivery service, or |
|---|---|
| (b) | five days after mailing, if mailed by first-class or certified mail, postage paid, |
| --- | --- |
(the “Notice Date”) to the respective addresses below or to such other address as either party will designate by written notice given to the other party.
University shall mail all general notices to Licensee to the following address:
ColdQuanta, Inc.
3030 Sterling Circle
Boulder, CO 80301
Attn: CFO
Licensee and Sublicensees shall mail all general notices to University to the following address:
License Administrator, CU Case # CU5477B-01.
Venture Partners
University of Colorado Boulder 589 UCB
4845 Pearl Circle East, Suite 200
Boulder, CO 80301
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 23 of 37 | CU Case Number CU5477B-01 |
|---|
Notwithstanding the other provisions in this Article 13, University may email financial invoices to Licensee (i.e., accounting contact) to the following contact person:
Name: Accounting Department
Email: [***]
13.3 Invalidation Notice. Licensee shall provide written notice to University at least 90 days prior to bringing an action seeking to invalidate any Licensed Patent or a declaration of non-infringement. Licensee shall include in such written notice an identification of all prior art it believes invalidates any claim of the patent.
13.4 Use of Names and Marks. Licensee shall not identify University in any promotional advertising, press releases, sales literature or other promotional materials to be disseminated to the public or any portion thereof without University’s prior written consent in each case, except that Licensee may state that it has a license for the Licensed Patents from University. University may state that it has licensed the Licensed Patents to Licensee. Licensee further shall not use the name of University or any University faculty member, inventor, employee or student or any trademark, service mark, trade name, copyright or symbol of University, without the prior written consent of University, entity or person whose name is sought to be used.
13.5 Marking.
| (a) | Licensee shall cause Licensed Products sold under this Agreement to be marked with the notice of the patent<br>numbers or patent pending, as may be appropriate. |
|---|---|
| (b) | Licensee shall include the following copyright notices for Licensed Software Products in the About Box (if<br>applicable) and in any applicable written documentation or, if no such documentation exists, in a “read me” or other .txt file distributed with each copy of the Licensed Software Products: |
| --- | --- |
Copyright (c) 2010 National Instruments Corporation. All Rights Reserved.
Copyright (c) 2010 The Regents of the University of Colorado, a body corporate.
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 24 of 37 | CU Case Number CU5477B-01 |
|---|
13.6 University Rules and Regulations. Licensee acknowledges that University employees who are engaged by Licensee, whether as consultants, employees, or otherwise, or who possess a material financial interest in Licensee, are subject to University’s rules regarding outside activities and financial interests as set forth in University’s intellectual property policy and related policies regarding conflicts of interest and outside consulting, as may be amended from time to time. Any term or condition of an agreement between Licensee and a University employee that seeks to vary or override such employee’s obligations to University may not be enforced against such employee or University without the express written consent of the Principal Technology Transfer Officer, as well as University of Colorado Medicine (formerly University Physicians, Inc.), as applicable.
13.7 Compliance with the Law. Licensee shall comply with all commercially material local, state, federal, and international laws and regulations relating to its obligations under this Agreement regarding the development, manufacture, use, and sale of Licensed Products.
13.8 Choice of Law. This Agreement is governed by and will be construed in accordance with the laws of Colorado.
13.9 Dispute Resolution. In the event of any dispute arising out of or relating to this Agreement, the affected party shall promptly provide notice to the other party, and the parties shall attempt in good faith to resolve the matter.
| (a) | Any disputes not so resolved shall be referred to the Principal Technology Transfer Officer for University and<br>to Licensee’s Senior Executives with settlement authority, who shall meet at a mutually acceptable time and location within 30 days of the Notice Date and shall attempt to negotiate a settlement. |
|---|---|
| (b) | If the Senior Executives fail to meet within 30 days of the Notice Date, or if the matter remains unresolved<br>for a period of 60 days after the Notice Date, either party may pursue any remedy allowed by law or this Agreement, provided that the state and federal courts located in the State of Colorado will have exclusive jurisdiction over any dispute arising<br>under this Agreement, and Licensee hereby irrevocably submits to the exclusive jurisdiction of a court of competent jurisdiction in Colorado, and, by execution and delivery of this Agreement, Licensee (i) accepts, generally and unconditionally,<br>the jurisdiction of this court and any related appellate court, and (ii) irrevocably waives any objection it may now or hereafter have as to the venue of any such suit, action or proceeding brought in the court or that the court is an<br>inconvenient forum. |
| --- | --- |
13.10 Merger and Modification of Agreement. The terms and provisions contained in this Agreement constitute the entire agreement between the parties and supersede all previous communications, representations, agreements or understandings, either oral or written, between the parties with respect to the subject matter, and no agreement or understanding varying or extending this
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 25 of 37 | CU Case Number CU5477B-01 |
|---|
Agreement will be binding upon either party to this Agreement, unless in a written amendment signed by duly authorized officers or representatives of the respective parties, and the provisions of this Agreement not specifically amended thereby remain in full force and effect according to their terms. For the sake of clarity, this Agreement supersedes the Software License Agreement, which is hereby terminated.
13.11 Severability. The provisions and clauses of this Agreement are severable, and in the event that any provision or clause is determined to be invalid or unenforceable under any controlling body of the law, such invalidity or unenforceability will not in any way affect the validity or enforceability of the remaining provisions and clauses.
13.12 Scope. This Agreement does not establish a joint venture, agency or partnership between the parties, nor create an employer/employee relationship. Neither party has the right, ability or authority to legally bind the other party.
13.13 Preservationof Immunity. Nothing in this Agreement is intended or may be construed as a waiver, either express or implied, of any of the immunities, rights, benefits, defenses or protections provided to University under governmental or sovereign immunity laws from time to time applicable to University, including the Colorado Governmental Immunity Act (C.R.S. § 24-10- 101, et seq.) and the Eleventh Amendment to the United States Constitution.
13.14 Headings. The headings are included for convenience only and may not be used to construe this Agreement.
13.15 Force Majeure. Noncompliance by either party with the obligations of this Agreement due to force majeure, (laws or regulations of any government, war, civil commotion, destruction of production facilities and materials, fire, flood, earthquake or storm, labor disturbances, shortage of materials, failure of public utilities or common carriers), or any other causes beyond the reasonable control of the applicable party, does not constitute breach of this Agreement and such party shall be excused from performance hereunder to the extent and for the duration of such circumstances, provided it first notifies the other party in writing of such circumstances, giving an indication of the likely extent and duration thereof, and uses commercially reasonable efforts to resume performance of its obligations as soon as practicable
13.16 Counterparts. This Agreement may be executed in one or more counterparts and by electronically transmitted signatures, each of which is hereby deemed an original, but all of which together constitute one and the same document. In making proof of this Agreement, it will not be necessary to produce or account for more than one such counterpart executed by the party against whom the enforcement of this Agreement is sought.
{Signature Page Follows}
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 26 of 37 | CU Case Number CU5477B-01 |
|---|
To evidence the parties’ agreement to this Agreement, the parties have executed it and delivered it on the Effective Date.
| UNIVERSITY | ||
|---|---|---|
| By: | /s/ Brynmor Rees | |
| Name: | Brynmor Rees | |
| Title: | Managing Director, Venture Partners<br><br><br>at CU Boulder and Assistant Vice Chancellor<br> <br>for Research and<br>Innovation | |
| Date: | 6/28/2021 | |
| LICENSEE | ||
| By: | /s/ Rushton McGarr | |
| Name: | Rushton McGarr | |
| Title: | Chief Financial Officer | |
| Date: | ||
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 27 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
APPENDIX A: SPECIFIC TERMS AND CONDITIONS
| 1. | Licensed Patents; Field of Use; Territory: | |||
|---|---|---|---|---|
| (a) | The Licensed Patents are as follows: | |||
| --- | --- | |||
| (i) | Jointly-Owned Licensed Patents | |||
| --- | --- | |||
| Internal ID | Country | Serial No/Patent No | Title | Inventor |
| --- | --- | --- | --- | --- |
| CU5477B-US1 | United States | US 16/576,067 | Microwave Sensor Using Rydberg Particles | Evan Salim, Dana Anderson, Zoya Popovic, Farhad Majdeteimouri, and Jayson Denney |
| CU5478B-US1 | United States | US 16/687,193 | Quantum Tunneling Matter-Wave Transistor System | Dana Anderson, Brad Anthony Dinardo |
| (b) | Field of Use: All Fields | |||
| --- | --- | |||
| (c) | Territory: Worldwide | |||
| --- | --- | |||
| 2. | Financial Conditions: | |||
| --- | --- | |||
| (a) | Licensee shall pay the following: | |||
| --- | --- | |||
| (i) | Patent Fees and Costs. Licensee shall reimburse University for patenting expenses incurred by University<br>for the Licensed Patents. As of the Effective Date, unreimbursed patent expenses are [***]. With respect to expenses incurred by University after the Effective Date, Licensee shall reimburse University within 30 days of receiving an invoice from<br>University. | |||
| --- | --- | |||
| (ii) | License Fee. Licensee shall pay a license fee of [***] due thirty (30) days from the Effective<br>Date. | |||
| --- | --- | |||
| (iii) | Reserved. | |||
| --- | --- | |||
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 28 of 37 | CU Case Number CU5477B-01 | ||
| --- | --- | --- | ||
| (iv) | License Maintenance Fee. Licensee shall pay University an annual License Maintenance Fee in the amount<br>[***] due on each anniversary of the Effective Date starting on the first anniversary of the Effective Date. The License Maintenance Fees are creditable against royalties on Net Sales due for the same calendar year. | |||
| --- | --- | |||
| (v) | Royalty on Net Sales. Licensee shall pay University an earned royalty at: | |||
| --- | --- | |||
| (A) | Non-Government Sales: [***] of Net Sales of Licensed Products that are<br>not Licensed Software Products | |||
| --- | --- | |||
| (B) | Government Sales of Licensed Products: | |||
| --- | --- | |||
| (I) | [***] of Net Sales of Licensed Products that are not Licensed Software Products, when Licensee’s annual<br>Government Sales of Licensed Products that are not Licensed Software Products are less than [***] of Licensee’s total Net Sales of Licensed Products that are not Licensed Software Products, or | |||
| --- | --- | |||
| (II) | [***] of Net Sales of Licensed Products that are not Licensed Software Products, when Licensee’s annual<br>Government Sales of Licensed Products that are not Licensed Software Products are [***] or more of Licensee’s total Net Sales of Licensed Products that are not Licensed Software Products | |||
| --- | --- | |||
| (C) | Licensed Products that Are Also Licensed Products Under the CU1833B-04<br>Agreement. If Licensee is required to pay a royalty on Net Sales of a Licensed Product under the CU1833B-04 Agreement, then Licensee may credit the royalties paid under the<br>CU1833B-04 Agreement against royalties owed under this Agreement for the same Net Sales. For the sake of clarity, the maximum royalty payable by Licensee on a product, service or process, or part thereof, that<br>constitutes a Licensed Product under both the CU1833B-04 Agreement and this Agreement is [***] or [***] of Net Sales, as the case may be. | |||
| --- | --- | |||
| (D) | [***] of Net Sales of Licensed Software Products | |||
| --- | --- | |||
| (vi) | Royalty on Sublicense Income. Licensee shall pay University an earned royalty at [***] of the Sublicense<br>Income. | |||
| --- | --- | |||
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 29 of 37 | CU Case Number CU5477B-01 | ||
| --- | --- | --- | ||
| (b) | Timing or Reporting and Payment Obligations. Licensee shall | |||
| --- | --- | |||
| (i) | prepare a quarterly Royalty Report pursuant to Article 6 Reports, Records and Audits and Appendix C, Form of<br>Royalty Report; and | |||
| --- | --- | |||
| (ii) | submit the earned royalty payment, if any | |||
| --- | --- |
within 30 days after the end of each quarter of the calendar year.
| (c) | No Multiple Royalties. No multiple royalties are payable in the event any Licensed Products are covered<br>by more than one of the Licensed Patents. | |
|---|---|---|
| (d) | Interest. Licensee shall pay past payments including interest at either the rate of one percent per<br>month compounded or the maximum interest rate allowed by applicable law, whichever is less. | |
| --- | --- | |
| (e) | Payments After License Termination. After the Agreement terminates, Licensee shall continue to submit<br>earned royalty payments and reports required by Article 6 of this Agreement, until all Licensed Products made or imported under this Agreement have been sold and until all sublicense payments have been received by Licensee. | |
| --- | --- | |
| (f) | Tax-exempt. All payments due under this Agreement shall be made<br>without deduction for taxes, assessments, or other charges of any kind that may be imposed on University by any government outside of the United States or any political subdivision of such government with respect to any amounts payable to University<br>pursuant to this Agreement. All such taxes, assessments, or other charges shall be assumed by Licensee. Licensee is also responsible for all bank transfer charges for payments. | |
| --- | --- | |
| (g) | Government Registration. If this Agreement or any associated transaction is required by the law of any<br>nation to be either approved or registered with any governmental agency, Licensee assumes all legal obligations to do so. Licensee shall notify University if Licensee becomes aware that this Agreement is subject to a United States or foreign<br>government reporting or approval requirement. Licensee shall make all necessary filings and pay all costs, including fees, penalties, and all other out-of-pocket costs,<br>associated with such reporting or approval process. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 30 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (h) | Payments. All payments due are payable in United States dollars. When Licensed Products are sold for<br>monies other than United States dollars, Net Sales shall first be determined in the foreign currency of the country in which the sale was made and then converted into equivalent United States dollars. The exchange rate will be that rate quoted in<br>the Wall Street Journal on the last business day of the reporting period. | |
| --- | --- |
Licensee shall make, or cause the Sublicensee to make, all payments to University payable to “The Regents of the University of Colorado,” and, except as otherwise provided in this Agreement, within 30 days of receiving an invoice and mail them to the following address:
Venture Partners
University of Colorado Boulder
PO Box 911395
Denver, CO 80291-1395
ATTN: Accounts Receivable
| 3. | Licensee Due Diligence Milestones and Obligations | |
|---|---|---|
| (a) | Due Diligence Milestones. Licensee shall use commercially reasonable efforts to develop, manufacture,<br>sublicense, market and sell the Licensed Products in the Fields of Use and the Territory in accordance with the milestones defined here. | |
| --- | --- | |
| (i) | Submission of the Royalty Report and payment of the Net Sales royalty for any Net Sales invoiced prior to the<br>Effective Date within 60 days of the Effective Date. | |
| --- | --- | |
| (ii) | Secure an aggregate of at least [***] in third party financing by June 1, 2022. | |
| --- | --- | |
| (iii) | Develop at least one prototype of a Licensed Product that is not solely a Licensed Software Product by<br>December 31, 2024. | |
| --- | --- | |
| (iv) | Achieve [***] in cumulative Net Sales of Licensed Products and/or Sublicense Income by December 31, 2026.<br> | |
| --- | --- | |
| (v) | Achieve [***] in cumulative Net Sales of Licensed Products and/or Sublicense Income by December 31, 2028.<br> | |
| --- | --- | |
| (vi) | Achieve [***] in cumulative Net Sales of Licensed Products and/or Sublicense Income by December 31, 2031.<br> | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 31 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
Once Licensee has achieved all of the foregoing milestones, Licensee shall use commercially reasonable efforts to continue to develop, manufacture, market and sell or sublicense the Licensed Products in the Fields of Use and the Territory consistent with those utilized by companies of similar size and type that have successfully developed products and services similar to Licensed Products. In determining commercially reasonable efforts with respect to a particular Licensed Product, Licensee may not reduce such efforts due to the competitive, regulatory, or other impact of any other product or method that it owns, licenses, or is developing or commercializing.
University acknowledges and agrees that all due diligence milestones hereunder may be achieved by Licensee or by any Sublicensees.
Notwithstanding anything to the contrary herein, a failure of Licensee to meet any of the above Milestones is not a breach of this Agreement and shall be deferred as reasonably necessary in the event that the failure to reach the Milestone(s) is solely due to a force majeure event, provided that Licensee provides notice to University promptly in the event such circumstances arise, giving an indication of the likely extent and duration thereof, and uses commercially reasonable efforts to resume performance of its obligations as soon as practicable.
| (b) | Mandatory Sublicensing. If Licensee is unable or unwilling to serve or develop a potential market or market<br>territory for which there is a company willing to be a Sublicensee, Licensee shall at University’s request negotiate in good faith a Sublicense with any such Sublicensee. |
|---|
Licensee acknowledges University’s interest in ensuring that Licensed Products are developed and commercialized to the fullest extent possible for the benefit of the public.
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 32 of 37 | CU Case Number CU5477B-01 |
|---|
APPENDIX B: DILIGENCE REPORT
- Diligence Reports General. Pursuant to Article 6 of this Agreement, Licensee is obligated to submit Diligence Reports. Licensee shall submit the following:
| (a) | An annual Diligence Report within 30 calendar days of the end of each calendar year that is consistent with<br>Section 2, below. |
|---|
- Diligence Report Details. Licensee shall include the following items in the Diligence Report:
| (a) | Development Report (4-8 paragraphs) | |
|---|---|---|
| (i) | Activities completed since last report, including the object and parameters of the development, when initiated,<br>when completed and the results. | |
| --- | --- | |
| (ii) | Activities currently under investigation, i.e., ongoing activities including object and parameters of such<br>activities, when initiated, and projected date of completion. | |
| --- | --- | |
| (b) | Future development activities (4-8 paragraphs) | |
| --- | --- | |
| (i) | Activities to be undertaken before next report, including the type and object of any studies conducted and<br>their projected starting and completion dates. | |
| --- | --- | |
| (ii) | Estimated total development time remaining before a product will be commercialized. | |
| --- | --- | |
| (c) | Changes to initial development plan (2-4 paragraphs)<br> | |
| --- | --- | |
| (i) | Reasons for changes. | |
| --- | --- | |
| (ii) | Variables that may cause additional changes. | |
| --- | --- | |
| (iii) | Rationale for delay in or termination of development plans or product lines, including financial, strategic,<br>and legal reasons. | |
| --- | --- | |
| (iv) | Rationale for non-termination of this Agreement or retention of the<br>Field of Use and, if the Agreement includes more than one patent family under the Licensed Patents, retention of all of the patent families under the Licensed Patents. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 33 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
| (d) | Additional items to be provided: | |
| --- | --- | |
| (i) | If Licensee receives funding from the State of Colorado, including funds received through University, a summary<br>of capital investments and an employee growth chart (# of FTEs, employee positions and all related information). | |
| --- | --- | |
| (ii) | Information relating to the Licensed Products that have become publicly available, e.g., published articles,<br>competing products, patents, etc. | |
| --- | --- | |
| (iii) | Development work being performed by third parties other than Licensee to include name of third party, reasons<br>for use of third party, planned future uses of third parties including reasons why and type of work. | |
| --- | --- | |
| (iv) | Update of competitive information trends in industry and government compliance. | |
| --- | --- | |
| (v) | Updates to the market plan. | |
| --- | --- | |
| (vi) | Information and copies of relevant materials evidencing the status of any patent applications or other<br>protection relating to the Licensed Products or the Licensed Patents. | |
| --- | --- | |
| (vii) | If changed, the name and current address of Licensee’s patent counsel responsible for the Licensed<br>Patents. | |
| --- | --- | |
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 34 of 37 | CU Case Number CU5477B-01 |
| --- | --- | --- |
APPENDIX C: FORM OF ROYALTY REPORT
| Licensee Name: | |||
|---|---|---|---|
| Sublicensee Name (for Sublicensee reports): | |||
| --- | |||
| CU Case No.: | Patent No. | ||
| --- | --- | ||
| Period Covered: From: | / / | Through: | / / |
| --- | --- | --- | --- |
| Prepared By: | Date: | ||
| --- | --- | ||
| Approved By: | Date: |
Licensee shall, or shall require by contract each and every individual Sublicensee to, report gross sales, Net Sales and Net Sales exclusions separately for each product line or catalog number using the format located below. For the sake of clarity, if the Licensed Product covers several product lines or product catalog numbers, Licensee and every individual Sublicensee shall prepare a separate report for each individual product.
Product Name:
Product catalog no.:
Applicable Licensed Patents:
Net Sales Royalties (Note: Licensee shall report Net Sales by each Sublicensee separately.)
| Country (list each<br>separately | CU1833B-<br><br><br>04* | Gross<br><br><br>Sales | Authorized<br>Exclusions** | Net Sales | Royalty Rate | Royalty Amount<br>Owed |
|---|---|---|---|---|---|---|
| United States | ||||||
| TOTAL: |
Sublicense Income (Note: Licensee shall report Sublicense Income for each Sublicensee separately.)
| Type (Source)<br><br><br>of Sublicense Income | CU1833B-<br><br><br>04* | Total<br><br><br>Amount<br> <br>Received | Authorized<br>Exclusions** | Sublicense Income<br>Royalty Rate | Sublicense<br><br><br>Income Royalty<br> <br>Amount<br>Owed |
|---|---|---|---|---|---|
| TOTAL: | |||||
| * | This column is used to indicate whether a Licensed Product is covered by the<br>CU1833B-04 License as described in Appendix A Section 2(a)(v)(C) | ||||
| --- | --- | ||||
| ** | Authorized exclusions are defined in Article 1.1, Net Sales and Sublicense Income definitions, of this<br>Agreement. If Licensee or Sublicensee makes any deductions whatsoever, then Licensee shall, or shall cause the Sublicensee to, submit an itemized list and detailed explanation of such deductions at that same time of this Royalty Report.<br> | ||||
| --- | --- | ||||
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 35 of 37 | CU Case Number CU5477B-01 | |||
| --- | --- | --- |
EXHIBIT D: CU1833B-04 AGREEMENT
[Attached]
| Exclusive License Agreement<br> <br>[Rev.<br>2020] | Page 36 of 37 | CU Case Number CU5477B-01 |
|---|
EX-10.16
Exhibit 10.16
Certain identified information has been excluded from this exhibit both because it (i) is not material and (ii) is the type that theissuer treats as private or confidential. Brackets with triple asterisks denote omissions.
NON-EXCLUSIVE LICENSE AGREEMENT
This Non-Exclusive License Agreement (the “Agreement”) is made and entered into this 2 of February, 2012, (the “Effective Date”) by and between the Regents of the University of Colorado, a body corporate, having its principal office at 1800 Grant Street, 8th Floor, Denver, CO 80203 (hereinafter “University”) and ColdQuanta, Inc., a Colorado corporation having its principal office at 1600 Range Street, Suite 103, Boulder, CO 80301 (hereinafter “Licensee”).
WHEREAS, University previously was the co-owner with Sarnoff Corporation of certain Patent Rights (as later defined herein), and Sarnoff Corporation’s ownership interest in such Patent Rights were assigned to SRI International, Inc (“SRI”) in connection with SRI’s acquisition of Sarnoff Corporation (“Sarnoff”); and
WHEREAS, SRI is the sole owner of certain Patent Rights that were previously solely owned by Sarnoff; and
WHEREAS, University and Sarnoff entered into an inter-institutional agreement (the “IIA”) pursuant to which the University obtained the right to grant to Licensee the license rights granted herein for the Patent Rights co-owned by University and SRI and the Patent Rights solely owned by SRI; and
WHEREAS, Sarnoff assigned its rights in the IIA to SRI in connection with SRI’s acquisition of Sarnoff; and
WHEREAS, in accordance with the IIA, SRI has reviewed and approved this Agreement; and
WHEREAS, Licensee is interested in licensing and further developing the Patent Rights for commercial applications, and;
WHEREAS, University desires to have the Patent Rights developed and commercialized to benefit the public and is willing to grant a license hereunder,
NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
For the purposes of this Agreement, the following words and phrases shall have the following meanings:
| 1.1 | “Affiliate(s)” shall mean every corporation or entity, which, directly or indirectly, or through<br>one or more intermediaries, controls, is controlled by, or is under common control with Licensee, as well as every officer, director, agent and representative of any such corporation or entity. For the purposes of this definition, the term<br>“control” means (a) beneficial ownership of at least fifty percent (50%) of the voting securities of a business organization with voting securities, or (b) a fifty percent (50%) or greater interest in the net assets or profits<br>of a partnership or business organization without voting securities | |
|---|---|---|
| ColdQuanta Non-Exclusive License Agreement | 1 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
| 1.2 | “Field of Use” shall mean the fields of use identified in Exhibit A.<br> | |
| --- | --- | |
| 1.3 | “Improvement” shall mean any invention, the practice of which would also require the practice of an<br>invention claimed in or covered by the Patent Rights and which is a modification of the inventions claimed in or covered by the Patent Rights, made by Dana Anderson in his capacity as an employee of the University, or University researchers working<br>in the laboratory of Dana Anderson. | |
| --- | --- | |
| 1.4 | “Know-How” shall mean, and be limited to,<br>University’s proprietary information which has been created, developed, and fixed in any tangible medium of expression and which is directly related to the use of, or desirable for the practice of, the Patent Rights. | |
| --- | --- | |
| 1.5 | “Licensed Process(es)” shall mean any process, art, or method which is covered in whole or in part<br>by an issued, unexpired claim or a pending claim contained in the Patent Rights such that, but for this license, the use of the process would infringe on one or more claims of the Patent Rights. | |
| --- | --- | |
| 1.6 | “Licensed Product(s)” shall mean any: | |
| --- | --- | |
| a. | product or part thereof that is covered in whole or in part by an issued, unexpired claim or a pending claim<br>contained in the Patent Rights in the country in which any such product or part thereof is made, used or sold; or | |
| --- | --- | |
| b. | product, apparatus, or part thereof that is manufactured or discovered by using a process or is employed to<br>practice a process which is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Patent Rights in the country in which any Licensed Processes is used or in which such product or part thereof is used or sold.<br> | |
| --- | --- | |
| 1.7 | “Net Sales” shall mean the total gross receipts for sales of Licensed Products or practice of<br>Licensed Processes by or on behalf or Licensee and its Affiliates, and from leasing, renting, or otherwise making Licensed Products available to others without sale or other dispositions, whether invoiced or not, less returns and allowances, packing<br>costs, insurance costs, freight out, taxes or excise duties imposed on the transaction (if separately invoiced and paid), and wholesaler and cash discounts in amounts customary in the trade to the extent actually granted. No deductions shall be made<br>for commissions, or for the costs of collections. Net Sales shall also include the fair market value of any non-cash consideration received by Licensee and its Affiliates, for the sale, lease, or transfer of<br>Licensed Products or Licensed Processes. | |
| --- | --- | |
| 1.8 | “Patent Rights” shall mean all of the following University intellectual property:<br> | |
| --- | --- | |
| a. | the United States and foreign patents and/or patent applications and/or provisional patent applications listed<br>in Exhibit B; | |
| --- | --- | |
| b. | United States and foreign patents issued from the applications listed in Exhibit B and from<br>divisionals and continuations of these applications; | |
| --- | --- | |
| c. | claims of U.S. and foreign<br>continuation-in-part applications, and of the resulting patents, which are directed to subject matter specifically described in the U.S. and foreign applications listed<br>in Exhibit B; | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 2 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
| d. | claims of all foreign patent applications, and of the resulting patents, which are directed to subject matter<br>specifically described in the United Slates patents and/or patent applications described in this Subsection: and | |
| --- | --- | |
| e. | any reissues of United States patents described in this Subsection. | |
| --- | --- | |
| 1.9 | “Territory” shall mean the geographical area identified in Exhibit A.<br> | |
| --- | --- |
SECTION 2. GRANT OF LICENSE
| 2.1 | University hereby grants and Licensee accepts, during the term and subject to the terms and conditions of this<br>Agreement, and further subject to University’s right to do so without incurring liability to third parties, |
|---|---|
| a. | a non-exclusive, royalty-bearing license to use the Know-How in the Territory and within the Fields of Use; and |
| --- | --- |
| b. | a non-exclusive, royalty-bearing license to the Patent Rights in the<br>Territory to make, use, sell, lease, offer to sell, and import any Licensed Products in the Fields of Use and to practice any Licensed Processes In the Fields of Use*,* provided, however, that with respect to the University’s interests in<br>the Patent Rights, the license shall be exclusive. |
| --- | --- |
| 2.2 | All Know-How due under this Agreement shall be delivered to Licensee<br>prior to or on the Effective Date in written, oral or other form of communication. No additional Know-How shall be due after the Effective Date, except as provided in Section 3. |
| --- | --- |
| 2.3 | This Agreement confers no license or rights by implication, estoppel, or otherwise under any patent<br>applications or patents of University or SRI other than the Patent Rights, regardless of whether such patents are dominant or subordinate to the Patent Rights. |
| --- | --- |
SECTION 3. IMPROVEMENTS & INDEPENDENT INVENTIONS
| 3.1 | University Improvements: In the event that University develops any Improvements to the inventions<br>claimed in the Patent Rights or to any other preexisting patent application or patent that is dominated by the Patent Rights, then each such Improvement will be considered part of this Agreement for no additional consideration.<br> | |
|---|---|---|
| 3.2 | University Independent Inventions: | |
| --- | --- | |
| a. | Provided that Dana Anderson is at the time obligated to assign intellectual property to University and is<br>voluntarily involved as an employee, board member, or consultant to Licensee, in the event that Dana Anderson, or anybody working in a laboratory under the supervision or direction of Dana Anderson, makes any invention in the field of ultra-cold<br>matter and related devices and applications, the practice of which would not require the practice of an invention claimed in or covered by the Licensed Patent Rights (“Independent Invention”), then provided such Independent<br>Invention is not subject to any prior contractual or legal obligations precluding the University from licensing the independent Invention to Licensee, the University hereby grants to Licensee an exclusive option (“Option”) to obtain the<br>exclusive (or non-exclusive, if Licensee so desires), worldwide, commercial rights to each Independent Invention on terms and conditions to be negotiated in good faith by the parties following the exercise by<br>Licensee of the Option. | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 3 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
| b. | University shall disclose each Independent Invention to Licensee in reasonable written detail after the<br>University’s Technology Transfer Office receives notification from the inventor(s) that such Independent Invention has been made, and Licensee shall have ninety (90) days (the “Option Period’) following receipt of such<br>invention disclosure to exercise the Option with respect to such Independent Invention by delivering to University written notice indicating that Licensee desires to exercise the Option. Upon such notice, the parties shall negotiate in good faith<br>for a period of up to ninety (90) days commercially reasonable terms and conditions for **** a license under the intellectual property rights relating to such Independent Invention. | |
| --- | --- |
SECTION 4. SUBLICENSING
| 4.1 | Upon prior written approval by University, such approval not to be unreasonably withheld or delayed. Licensee<br>may sublicense to one or **** more third parties, the rights granted in Section 2 subject to the following limitations: |
|---|---|
| a. | Licensee agrees that any sublicenses granted by it shall impose restrictions and conditions upon sublicensees<br>equivalent in scope to those imposed upon Licensee; |
| --- | --- |
| b. | Licensee agrees that, in the event University terminates this Agreement pursuant to Subsection 13.2(b), any<br>sublicenses granted, in **** University’s sole discretion, shall be directly enforceable by University; |
| --- | --- |
| c. | Licensee agrees that any sublicenses granted shall **** adequately protect University’s and SRI’s<br>security and property interest in University’s Know-How and the Patent Rights; and |
| --- | --- |
| d. | Any sublicenses granted by Licensee shall provide only for cash consideration from sublicensees unless****University has expressly consented otherwise in writing in advance. |
| --- | --- |
| 4.2 | Licensee agrees to forward **** to University a copy of each fully executed sublicense agreement postmarked<br>within thirty (30) days of the execution of such agreement. |
| --- | --- |
| 4.3 | Licensee shall pay to University royalties on all **** revenue received by Licensee from sublicensees of the<br>Patent Rights as provided in the attached Exhibit C. |
| --- | --- |
SECTION 5. RETAINED RIGHTS
| 5.1 | Government Rights: | |
|---|---|---|
| a. | Licensee understands that this Agreement is subject to all of the terms and conditions of Title 35 U.S.C.<br>§§ 200-204, et seq., (“Bayh-Dole Act”) and **** 37 C.F.R. 401, as such may be amended. | |
| --- | --- | |
| b. | Further, **** Licensee agrees to take all reasonable action necessary to enable University and/or SRI to<br>satisfy its obligations hereunder. | |
| --- | --- | |
| 5.2 | University and SRI Rights: | |
| --- | --- | |
| a. | University **** shall have the right to practice the Patent Rights and<br>Know-How for its own research and education, including sponsored research. Such right shall be transferable to other nonprofit or educational institutions if, and only if, the Inventor named above moves his<br>principal place of research to such other institution or if required to effectuate a collaboration between Dana Anderson and researchers at another institution, SRI shall have the right to use the Patent Rights for any purpose, including commercial,<br>educational and research purposes. | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 4 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
| b. | University shall have the right to publish any Information included in the Patent Rights and the Know-How provided that University takes reasonable steps to avoid the loss of any patent rights as a result of University exercising its rights under this Paragraph. | |
| --- | --- |
SECTION 6. FEES & ROYALTIES
| 6.1 | As consideration for the disclosure of University’s Know-How as<br>well as the licenses and rights under the Patent Rights, |
|---|---|
| a. | Licensee agrees to pay a noncreditable, nonrefundable, up-front license<br>fee as set forth in Exhibit C within thirty (30) days from the Effective Date of this Agreement; |
| --- | --- |
| b. | Licensee agrees to pay University royalties as set forth in Exhibit C; |
| --- | --- |
| 6.2 | No multiple royalties shall be payable because any Licensed Products or Licensed Processes are covered by more<br>than one of the Patent Rights. |
| --- | --- |
| 6.3 | On sales of Licensed Products by Licensee to sublicensees or on sales made in other than arm’s-length transactions, the value of the Net Sales attributed under this Section to such a transaction shall be that which would have been received in an<br>arm’s-length transaction, based on a like transaction at that time. |
| --- | --- |
| 6.4 | Payment Due Date: |
| --- | --- |
| a. | Unless otherwise provided herein, all payments required under this Agreement shall be due within thirty<br>(30) days of written notice from University. |
| --- | --- |
| b. | Payments past due shall bear interest at the rate of [***] per month compounded, or the maximum interest rate<br>allowed by applicable law, whichever is less. |
| --- | --- |
SECTION 7. REPORTS. RECORDS, AND AUDITS
| 7.1 | Reports: | |
|---|---|---|
| a. | Licensee shall, without request by University, render to University written reports for each calendar quarter<br>of the Net Sales of Licensed Products and/or Licensed Processes subject to royalty hereunder made during the prior three (3) month period and shall simultaneously pay to University the royalties due on such Net Sales, if any, in United States<br>Dollars. | |
| --- | --- | |
| b. | The written report shall be in the form of the report of Exhibit D. | |
| --- | --- | |
| 7.2 | Records: | |
| --- | --- | |
| a. | Licensee shall keep accurate records and shall compel its affiliates and sublicensees to keep accurate records,<br>in sufficient detail to reflect its operations under this Agreement and to enable the royalties accrued and payable under this Agreement to be determined. | |
| --- | --- | |
| b. | Such records shall be retained for at least three (3) years after the close of the period to which they<br>pertain, or for such longer time as may be required to finally resolve any question or discrepancy raised by University during such 3-year period. | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 5 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
| 7.3 | Audits: | |
| --- | --- | |
| a. | Upon the request of University, with reasonable notice, but not more frequently than once a year, Licensee<br>shall permit an independent public accountant selected and paid by University to have access during regular business hours to such records as may be necessary to verify the accuracy of royalty payments made or payable hereunder.<br> | |
| --- | --- | |
| b. | Said accountant shall disclose information acquired to University only to the extent that it should properly<br>have been contained in the royalty reports required under this Agreement. | |
| --- | --- | |
| c. | If an inspection shows an underreporting or underpayment in excess of [***] for any twelve (12) month<br>period, then Licensee shall reimburse University for the cost of the inspection and pay the amount of the underpayment including any interest as required by this Agreement. | |
| --- | --- |
SECTION 8. CONFIDENTIAL INFORMATION
| 8.1 | Both University and Licensee (hereinafter, “Party” or “Parties”) shall vigilantly<br>protect the confidential information related to the Patent Rights and Know-How from disclosure to third parties; and no such disclosure shall be made without the disclosing Party’s written permission.<br> |
|---|---|
| 8.2 | All written documents containing confidential information and other material in tangible form received by<br>either Party under this Agreement shall remain the property of the disclosing Party, and such documents and materials, together with copies of excerpts thereof, shall promptly be returned to disclosing Party upon request, except one copy may be<br>retained for archival purposes. |
| --- | --- |
| 8.3 | Licensee acknowledges that University is subject to the Colorado Open Records Act (C.R.S. § 24-72-201, et seq.). All plans and reports marked “Confidential” shall be treated by University as confidential to the extent permitted under § 24-72-204. |
| --- | --- |
SECTION 9. LICENSEE DUEDILIGENCE OBLIGATIONS
| 9.1 | Licensee shall use commercially reasonable efforts to bang Licensed Products and Licensed Processes to market<br>through a thorough, vigorous and diligent program for exploitation of the Patent Rights, to develop manufacturing capabilities, to continue active, diligent marketing efforts, and to satisfy the needs of such market with the Licensed Products and<br>Licensed Processes throughout the life of this Agreement. |
|---|
SECTION 10. PATENT ADMINISTRATION
| 10.1 | In consideration of the exclusive license granted under Section 2.1(b), Licensee shall reimburse<br>University the fees and costs, including attorney fees, incurred by it to date in connection with the preparation, filing, and prosecution of all patent applications and maintenance of patents corresponding to the Patent Rights, including, but not<br>limited to, interferences and reexaminations (collectively “Patent Costs”), and (b) all Patent Costs incurred by University on or after the date of this Agreement. Such fees and costs shall be paid to University within thirty<br>(30) days after receipt of invoicing. Patent Costs incurred prior to Effective Date shall be invoiced as follows: [***] of such fees may be invoiced August 1, 2011 and the remaining [***] may be invoiced on the first anniversary of the<br>Effective Date. The Patent Costs incurred as of May 11, 2011 are approximately [***]. | |
|---|---|---|
| 10.2 | University Rights: University and SRI shall control the preparation, filing, prosecution, and<br>maintenance of any and all patent applications or patents included in the Patent Rights on or after the Effective Date and shall furnish copies of relevant patent-related documents to Licensee. Licensee shall have fifteen (15) business days to<br>review and comment on patent-related documents prior to the filing of said documents. | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 6 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
SECTION 11. PATENT ENFORCEMENT
| 11.1 | University and Licensee agree to inform the other Party promptly in writing of any suspected infringement of<br>the Patent Rights by a third party, and University also shall so notify SRI. In accordance with the IIA, University and SRI shall confer with the intent of reaching mutual agreement on whether and in what manner to enforce the rights of the parties<br>thereto, whether by appropriate legal proceedings or otherwise. University shall keep Licensee fully apprised of such discussions, and shall to the extent possible include Licensee’s counsel in such discussions and to align University’s<br>positions with the recommendations and interests of Licensee. |
|---|
SECTION 12. WARRANTIES, INDEMNIFICATIONS, ANDINSURANCE
| 12.1 | Negation of Warranties: | |
|---|---|---|
| a. | UNIVERSITY AND SRI MAKE NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND<br>ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO USE, SALE, OR OTHER DISPOSITION BY LICENSEE. SUBLICENSEE(S), OR THEIR VENDEES OR OTHER TRANSFEREES OF LICENSED PRODUCTS OR LICENSED PROCESSES INCORPORATING OR MADE BY USE OF THE PATENT RIGHTS.<br>THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OR SALE OF SUCH PRODUCTS OR PROCESSES WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, SERVICE MARK, OR OTHER RIGHTS.<br> | |
| --- | --- | |
| b. | Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall be construed as<br> | |
| --- | --- | |
| i. | A warranty or representation by University or SRI as to rights in<br>Know-How or the validity or scope of any of the Patent Rights; | |
| --- | --- | |
| ii. | A warranty or representation that the Patent Rights or anything made, used, sold or otherwise disposed of under<br>the license granted under this Agreement will or will riot infringe patents, copyrights or other rights of third parties; or | |
| --- | --- | |
| iii. | An obligation to furnish any know-how or technology not agreed to in<br>this Agreement, to bring or prosecute actions or suits against third parties for infringement, or to provide any services other than those specified in this Agreement. | |
| --- | --- | |
| 12.2 | Indemnification: Licensee shall indemnify, defend, and hold University, SRI, its regents, directors,<br>employees, students, officers, agents, affiliates, and representatives harmless from and against all liability, demands, damages, losses, and expenses (including attorney fees), for death, personal injury, illness, property damage, noncompliance<br>with applicable laws and any other claim, proceeding, demand, expense and liability of any kind whatsoever in connection with of arising out of: | |
| --- | --- | |
| a. | the use by or on behalf of Licensee, its sublicensees, Affiliates, directors, officers, employees, or third<br>parties of any Patent Rights; or | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 7 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
| b. | the design, manufacture, production, distribution, advertisement, consumption, sale, lease, sublicense or use<br>of any Licensed Product(s), Licensed Process(es) or materials by Licensee, or other products or processes developed in connection with or arising out of the Patent Rights; or | |
| --- | --- | |
| c. | any right or obligation of Licensee under this Agreement. | |
| --- | --- | |
| 12.3 | Insurance: Licensee shall obtain general liability insurance, including product liability insurance to<br>the extent available on commercially reasonable terms, on such terms and in such amounts as are reasonable and customary within its industry. | |
| --- | --- |
SECTION 13. DURATION, TERMINATION, AND **** CONVERSION
| 13.1 | This Agreement shall become effective as of the Effective Date and shall expire on the expiration date of the<br>last to expire patents within Patent Rights. | |
|---|---|---|
| 13.2 | Termination of Agreement: | |
| --- | --- | |
| a. | Licensee may terminate this Agreement at any time on sixty (60) days written notice to University, if<br>Licensee | |
| --- | --- | |
| i. | pays all amounts due as well as all non-cancelable costs to University<br>through the termination date | |
| --- | --- | |
| ii. | submits a final report of the type described in Section 7; | |
| --- | --- | |
| iii. | returns any confidential materials provided to Licensee by University in connection with this Agreement<br> | |
| --- | --- | |
| iv. | suspends its use and sales of the Licensed Product(s) and Licensed Process(es); provided however, that subject<br>to making the payments required by Section 6 and the reports required by Section 7, Licensee may, for a period of ninety (90) days after the effective date of such termination, sell all Licensed Products which may be in inventory; and<br> | |
| --- | --- | |
| v. | provides University the right to access any regulatory information filed with any U.S. or foreign government<br>agency with respect to Licensed Products and Licensed Processes. | |
| --- | --- | |
| b. | University may terminate this Agreement in the event that: | |
| --- | --- | |
| i. | Licensee fails to pay University any amounts when due to University hereunder and Licensee fails to make such<br>payment within thirty (30) days written notice | |
| --- | --- | |
| ii. | Licensee becomes insolvent, files a petition in bankruptcy, or has such a petition filed against it that<br>remains undismissed after 90 days; or | |
| --- | --- | |
| iii. | Licensee is in breach or default of this Agreement other than those occurrences listed in this Subsection and<br>Licensee fails to cure the breach or default within thirty (90) days of written notice of the breach or default. Events constituting a breach or default shall include, but are not limited to, the following: | |
| --- | --- | |
| 1. | operation, manufacture, use of or sale of the Licensed Products or Licensed Processes outside the Fields of Use<br>or Territory; | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 8 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
| 2. | failure to keep adequate records or permit inspection or audit. | |
| --- | --- | |
| iv. | The exclusive license granted by this Agreement shall immediately revert to University upon Licensee’s<br>dissolution, liquidation, insolvency, or bankruptcy. The exclusive license shall NOT pass to a trustee in bankruptcy or be held as an asset of said bankruptcy. | |
| --- | --- |
SECTION 14. GENERAL
| 14.1 | Assignment: This Agreement shall be binding upon and inure to the benefit of the respective successors<br>and assigns of the Parties hereto. | |
|---|---|---|
| a. | Assignment by Licensee. Subject to Section 14.1 (c), Licensee may assign this Agreement as part of<br>a sale, regardless of whether such a sale occurs through an asset sale, stock sale, merger or other combination, or any other transfer of (i) Licensee’s entire business; or (ii) that part of Licensee’s business that exercises<br>all rights granted under this Agreement. | |
| --- | --- | |
| b. | Any Other Assignment by Licensee. Any other attempt to assign this Agreement by Licensee is null and<br>void. | |
| --- | --- | |
| c. | Conditions of Assignment. Prior to any assignment, the following conditions must be met:<br>(i) Licensee must give University ten (10) days prior written notice of the assignment, including the new assignee’s contact information; and (ii) the new assignee must agree in writing to University to be bound by this<br>Agreement. | |
| --- | --- | |
| d. | Bankruptcy. In the event of a bankruptcy, assignment is permitted only to a party that can provide<br>adequate assurance of future performance, including diligent development and sales, of Licensed Patents. | |
| --- | --- | |
| 14.2 | Notice: Notice hereunder shall be deemed sufficient if given by registered mail, postage prepaid, and addressed<br>to the Party to receive such notice at the address given below, or such other address as may hereafter be designated by notice in writing. | |
| --- | --- | |
| University: | Licensee: | |
| --- | --- | |
| License Administrator | Rainer Kunz | |
| Office of Technology Transfer | ColdQuanta, Inc. | |
| University of Colorado, 588 SYS | 1600 Range Street, Suite 103 | |
| Suite 100, 4740 Walnut Street | Boulder, CO 80301 | |
| Boulder, CO 80309 | 303-440-1284 | |
| 14.3 | Use of Names and Marks: Licensee agrees not to identify University or SRI in any promotional<br>advertising, press releases, sales literature or other promotional materials to be disseminated to the public or any portion thereof without University’s or SRI’s (as applicable) prior written consent in each case, except that Licensee<br>may state that it has a license for the Patent Rights from University, and that Licensee and University work together in a variety of fields. Licensee further agrees not to use the name of University. SRI, or any University or SRI faculty member,<br>inventor, employee or student or any trademark, service mark, trade name, copyright or symbol of University or SRI, without the prior written consent of the entity or person whose name is sought to be used. | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 9 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
| 14.4 | Marking: Licensee agrees to: | |
| --- | --- | |
| a. | Cause Licensed Products or the product of Licensed Processes sold under this license to be marked with the<br>notice of the patent numbers or patent pending, as may be appropriate. | |
| --- | --- | |
| b. | Comply with all laws and regulations of the United States and any other country as appropriate concerning or<br>controlling the import or export of the Licensed Products, data, software, laboratory prototypes or other commodities. University makes no representation that a license or consent for export will not be required by applicable governmental agencies,<br>or if required, that it will be issued. | |
| --- | --- | |
| c. | Comply with all applicable statutes, regulations, and guidelines, including applicable governmental<br>regulations, policies and guidelines in its use of any University-supplied materials. Licensee agrees not to use the materials for research involving human subjects or clinical trials in the United States without complying with 21 C.F.R. Part 50 and<br>45 C.F.R. Part 46 (as those regulations may be amended from time to time). Licensee agrees not to use the materials for research involving human subjects or clinical trials outside of the United States without notifying University in writing, of<br>such research or trials and complying with the applicable regulations of the appropriate national control authorities. Written notification to University of research involving human subjects or clinical trials outside of the United States shall be<br>given no later than sixty (60) days prior to commencement of such research or trials. | |
| --- | --- | |
| 14.5 | Manufacturing: Licensee shall, to the extent commercially feasible, cause an Licensed Products to be<br>manufactured in the United States. | |
| --- | --- | |
| 14.6 | Compliance with the Law: Licensee shall comply with all commercially material local, state, federal, and<br>international laws and regulations relating to its obligations under this Agreement regarding the development, manufacture, use, and sale of Licensed Products and Licensed Processes. | |
| --- | --- | |
| 14.7 | Choice of Law: This Agreement shall be governed by and construed in accordance with the laws of the<br>State of Colorado. | |
| --- | --- | |
| 14.8 | Dispute Resolution: In the event of any dispute arising out of or relating to this Agreement, the<br>affected Party shall promptly notify the other Party (‘Notice Dates”), and the Parties shall attempt in good faith to resolve the matter. | |
| --- | --- | |
| a. | Any disputes not so resolved shall be referred to senior executives, who shall meet at a mutually acceptable<br>time and location within thirty (30) days of the Notice Date and shall attempt to negotiate a settlement. | |
| --- | --- | |
| b. | If the senior executives fail to meet within thirty (30) days of the Notice Date, or if the matter remains<br>unresolved for a period of sixty (60) days after the Notice Date, the Parties hereby irrevocably submit to the jurisdiction of a court of competent jurisdiction in the State of Colorado, and, by execution and delivery of this Agreement, each<br>(i) accepts, generally and unconditionally, the jurisdiction of such court and any related appellate court, and (ii) irrevocably waives any objection it may now or hereafter have as to the venue of any such suit, action or proceeding<br>brought in such court or that such court is an inconvenient forum. | |
| --- | --- | |
| 14.9 | Merger and Modification of Agreement: The terms and provisions contained in this Agreement constitute<br>the entire Agreement between the Parties and shall supersede all previous communications, representations, agreements or understandings, either oral or written, between the Parties hereto with respect to the subject matter hereof, and no agreement<br>or understanding varying or extending this Agreement will be binding upon either Party hereto, unless in writing which specifically refers to this Agreement, signed by duly authorized officers or representatives of the respective Parties, and the<br>provisions of this Agreement not specifically amended thereby shall remain in full force and effect according to their terms. | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 10 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
| 14.10 | Severability: The provisions and clauses of this Agreement are severable, and in the event that any<br>provision or clause is determined to be invalid or unenforceable under any controlling body of the law, such invalidity or unenforceability will not in any way affect the validity or enforceability of the remaining provisions and clauses hereof.<br> | |
| --- | --- | |
| 14.11 | Scope: This Agreement does not establish a joint venture, agency or partnership between the Parties, nor<br>create an employer—employee relationship. | |
| --- | --- | |
| 14.12 | Preservation of Immunity: The Parties agree that nothing in this Agreement is intended or shall be<br>construed as a waiver, either express or implied, of any of the immunities, rights, benefits, defenses or protections provided to University under governmental or sovereign immunity laws from time to time applicable to University, including, without<br>limitation, the Colorado Governmental Immunity Act (C.R.S. § 24-10-101, et seq.) and the Eleventh Amendment to the United States Constitution.<br> | |
| --- | --- | |
| 14.13 | Headings: Headings are included herein for convenience only and shall not be used to construe this<br>Agreement. | |
| --- | --- | |
| 14.14 | The provisions of Sections 6 and 10, and Subsections 7.1, 7.2, 12.1, 12.2, 14.3. 14.7–14.10, and 14.12,<br>and any other provision of this Agreement that by its nature is intended to survive, shall survive any termination or expiration of this Agreement. | |
| --- | --- |
Signature Page Follows
| ColdQuanta Non-Exclusive License Agreement | 11 of 18 | CU Case Number CU1833B |
|---|
IN WITNESS WHEREOF the parties hereto have caused this Agreement, to be executed in duplicate by their respective duly authorized officers.
| University: | Licensee: | ||
|---|---|---|---|
| By: | /s/ David Allen | By: | /s/ Rainer Kunz |
| David N. Allen | Rainer Kunz | ||
| Title: | Associate VP, Technology Transfer Office | Title: | President and Chief Executive Officer |
| Date: | 23 Jan 2021 | Date: | 2/2/2012 |
| Office of Technology Transfer<br><br><br>University of Colorado, 588 SYS<br> <br>Suite 100, 4740 Walnut Street<br><br><br>Boulder, CO 80309 | Cold Quanta, Inc.<br> <br>1600 Range<br>Street, Suite 103<br> <br>Boulder, CO 80301 | ||
| ColdQuanta Non-Exclusive License Agreement | 12 of 18 | CU Case Number CU1833B | |
| --- | --- | --- |
EXHIBIT A
FIELD OF USE and TERRITORY
Field of Use: All fields
Territory: Worldwide
| ColdQuanta Non-Exclusive License Agreement | 13 of 18 | CU Case Number CU1833B |
|---|
EXHIBIT B
PATENT RIGHTS
B.1. Co-owned by University and SRI:
| Internal ID | Country | Serial No | File Date | Title |
|---|---|---|---|---|
| CU1831B-PCT1 | PCT | PCT/<br>US2008/064149 | 05/19/2008 | Channel Cell<br>System |
| CU1831B-US1 | United<br>States | 12/600,825 | 04/20/2010 | Channel Cell<br>System |
| CU1832B-US1 | United<br>States | 12/121,068<br> <br>(patent no.<br>7,955,551) | 5/15/2008<br> <br>(issued<br>6/7/2011) | Alkaline<br>Metal<br>Dispensers<br>and Uses for<br>Same |
| CU1833B-PPA1 | United<br>States | 60/941,861 | 06/04/2007 | Portable,<br>Miniature<br>Multichamber<br>Ultracold-<br>Matter<br>Vacuum<br>System |
| CU1833B-PCT1 | PCT | PCT/<br>US2008/064150 | 05/19/2008 | Ultracold-<br>Matter<br>Systems |
| CU1833B-US1 | United<br>States | 12/600,821 | 04/20/2010 | Ultracold-<br> Matter<br>Systems |
| CU2729B-PPA1 | United<br>States | 61/030,335 | 02/21/2008 | Minaturized<br>Intergrated<br>Atom System |
| CU2729B-US1 | United<br>States | 12/390.669<br> <br>(patent no.<br>8,080,778) | 2/23/2009<br>(issued<br>12/20/2011) | Channel Cell<br>System |
B.2. Soley owned by SRI:
US patent 7470971
Title: Anodically bonded ultra-high-vacuum cell
Inventors: Sterling Eduardo McBride
US patent 7807509
Title: Anodically bonded ultra-high-vacuum cell
Inventors: Sterling Eduardo McBride
| ColdQuanta Non-Exclusive License Agreement | 14 of 18 | CU Case Number CU1833B |
|---|
EXHIBIT C
CONSIDERATION
In accordance with Section 6, Licensee shall pay the following consideration to University:
C.1 Contractual obligation in lieu of a license issue fee:
After the Effective Date, in lieu of a license issue fee, Licensee will pay University a fee equal to [***]. Such fee shall be paid after only the first to occur of either a Liquidation Event or Initial Public Offering. The respective fees, when and if payable, shall be paid upon closing of the event; except for Trailing Consideration which shall be payable within thirty (30) days after the actual receipt of such Trailing Consideration by the Licensee or its security holders.
For a Liquidation Event, the fees shall be payable in the form of the proceeds payable to either Licensee or its security holders, whether in cash, securities or other property, and in the same proportion such form of consideration is payable to the Licensee or its security holders. Notwithstanding the foregoing, in the event the form of consideration includes securities for which there is not an active public market, in lieu of paying that portion of the fee with such securities, the Licensee will make a cash payment to University equal to the fair market value of such securities. The valuation of such securities shall be determined in accordance with the definition of “Aggregate Consideration.”
For an Initial Public Offering, the fee shall be payable in the form of cash.
“Liquidation Event” means a (i) a merger, share exchange or other reorganization (“Merger”), (ii) the sale by one or more stockholders of a majority of the voting power of the Licensee (“Stock Sale”) or (iii) a sale of all or substantially all of the assets of the Licensee (or that portion of its assets related to the subject matter of this Agreement) (“Asset Sale”) in which for (i), (ii), and (iii) above, the stockholders of the Licensee prior to such transaction do not own a majority of the voting power of the acquiring, surviving or successor entity, as the case may be. Notwithstanding the foregoing, a Liquidation Event shall not include a bona fide financing transaction in which voting control of the Licensee transfers to one or more persons or entities who acquire shares of Licensee capital stock from Licensee in exchange for either an investment in Licensee or the cancellation of indebtedness owed by Licensee, or a combination thereof.
“Trailing Consideration” means any payments due for any deferred or contingent consideration payable to Licensee or its security holders including, without limitation, any post-closing milestone payment, escrow or holdback of consideration.
“Aggregate Consideration” means the amount equal to:
| (i) | in the case of an Asset Sale, the sum of (a) all cash, and the fair market value of all securities or<br>other property transferred to the Licensee at the time of the transaction, less all current and long-term liabilities (but not contingent liabilities) of the Licensee that are not discharged or assumed by the buyer (or its affiliates) in connection<br>with the Asset Sale. and (b) all cash, and the fair market value of all securities and other property for Trailing Consideration payable to the Licensee, when and if, actually paid; or | |
|---|---|---|
| (ii) | in the case of a Merger or Stock Sale, the sum of (a) all cash, and the fair market value of all<br>securities and other property transferred to the stockholders of the Licensee (and any option holders or warrant holders) in return for their stock (or options or warrants) in the Licensee at the time of the transaction, and (b) all cash, and<br>the fair market value of all securities and other property transferred to the stockholders of the Licensee (and any option holders or warrant holders) for Trailing Consideration payable to the holders of Licensee’s securities, when and if<br>actually paid. | |
| --- | --- | |
| ColdQuanta Non-Exclusive License Agreement | 15 of 18 | CU Case Number CU1833B |
| --- | --- | --- |
The valuation of any securities or other property shall be determined by reference to the operative transaction agreement for a respective Merger, Stock Sale or Asset Sale, provided that, if no such valuation is readily determinable from such operative transaction agreement, then for securities for which there is an active public market:
| (a) | if traded on a securities exchange or the NASDAQ Stock Market, the value shall be deemed to be the average of<br>the closing prices of the securities on such exchange or market over the 30-period ending three days prior to the closing of such transaction; or |
|---|---|
| (b) | if actively traded<br>over-the-counter, the value shall be deemed to be the average of the closing bid prices over the 30-day period ending three days<br>prior to the closing of such transaction. |
| --- | --- |
The method of valuation of securities subject to investment letters or other similar restrictions on free marketability shall take into account an appropriate discount from the market value as determined pursuant to clause (a) or (b) above so as to reflect the approximate fair market value thereof.
For securities for which there is no active public market, the value shall be the fair market value thereof as either (i) determined in good faith by the Board of Directors of Licensee, (ii) approved by University, such approval not to be unreasonably withheld, or (iii) determined by a third party appraiser appointed and paid for by Licensee.
“Initial Public Offering” means the effectiveness of a registration statement for the first sale of Licensee’s common stock in a firm commitment underwritten public offering registered under the Securities Act of 1933, as amended.
“Pre-Money Valuation” means the amount equal to the product of (i) the price per share of common stock sold in the Initial Public Offering and (ii) the total number of outstanding shares of common stock of Licensee immediately prior to the closing of the Initial Public Offering, determined on a fully diluted, as converted into common stock basis, giving effect to any stock split, stock dividend, stock combination, recapitalization or similar action impacting Licensee’s capitalization that occurs, or is deemed to occur, upon consummation of the Initial Public Offering.
C.2. Earned royalty:
Licensee agrees to pay an earned royalty of [***] of Net Sales. For Net Sales made directly to the United States Government (“Government Safes”), Licensee will pay:
| • | an earned royalty of [***] of Government Sales when Licensee’s annual Government Sales are less than [***]<br>of Licensee’s total Net Sales; and |
|---|---|
| • | an earned royalty of [***] of Government Sales when Licensee’s annual Government Sales are equal to or<br>greater than [***] of Licensee’s total Net Sales. |
| --- | --- |
Licensee shall ensure the annual Government Sales are reconciled, reported and paid in the fourth quarter royalty payment.
In the event of an assignment as defined in Section 14.1(a), University agrees to negotiate in good faith a royalty buyout option (i.e.. royalty monetization) with Licensee (including the assignee of this Agreement). if such a buyout is desired by Licensee or such assignee.
| ColdQuanta Non-Exclusive License Agreement | 16 of 18 | CU Case Number CU1833B |
|---|
C.3. Sublicensing Royalties:
Licensee agrees to pay the following percentages of consideration in any form (“Sublicense Revenue”) received by Licensee or Affiliates in connection with a grant of a sublicense to any third party (a “Sublicensee”). Sublicense Revenue shall include without limitation, upfront fees, maintenance fees, milestone payments, royalties on Sublicensee net sales, the unearned portion of any minimum royalties. equity, and research and development funding in excess of the costs of performing such research and development. A Sublicensee shall mean any third party sublicensed by Licensee to make, have made, use, have used, sell, have sold, import, have imported, exported. or have exported Licensed Products or to practice or have practiced any Licensed Process.
[***] of all Sublicense Revenue received under sublicense agreements executed during the first year after the Effective Date.
[***] of all Sublicense Revenue received under sublicense agreements executed during the second year after the Effective Date.
[***] of all Sublicense Revenue received under sublicense agreements executed during the third year after the Effective Date and each year thereafter until this Agreement is terminated or expires.
| ColdQuanta Non-Exclusive License Agreement | 17 of 18 | CU Case Number CU1833B |
|---|
EXHIBIT D
FORM OF ROYALTY REPORT
| Licensee: | CU Case No.: |
|---|---|
| Inventor: | Patent No. |
| Period Covered: From: / / | Through: / / |
| Prepared By: | Date: |
| Approved By: | Date: |
If license covers several major product lines, please prepare a separate report
for each line. Then combine all product lines into a summary report.
| Report Type: | ____ Single Product Line Report:<br><br> <br>____<br>Multiproduct Summary Report. Page 1 of ______Pages<br> <br>____ Product Line Detail. Line:_______________ Trademark:______________ | |||||
|---|---|---|---|---|---|---|
| Pages:_____ | ||||||
| Category | Gross Sales | * Less:<br><br><br>Allowances | Net<br><br><br>Sales | Royalty Rate | Period Royalty Amount | |
| --- | --- | --- | --- | --- | --- | --- |
| This Year | Last Year | |||||
| Governments | ||||||
| Other | ||||||
| TOTAL: |
Sublicense Income this quarter: $ ________ (attach page showing names, addresses, and telephone numbers; amount and type of fees received; territory; field of use; description of any non-cash consideration)
Total Payments: $________
The following payment forecast is non-binding and for University internal planning purposes only:
Payment Forecast Under This Agreement:
Next Quarter:________ Q2:________ Q3: ________ Q4:________
| ColdQuanta Non-Exclusive License Agreement | 18 of 18 | CU Case Number CU1833B |
|---|
EX-10.17
Exhibit 10.17
FIRST AMENDMENT TO THE NON-EXCLUSIVE LICENSE AGREEMENT
This First Amendment to the Non-Exclusive License Agreement (the “FirstAmendment”) is made and entered into by and between the Regents of the University of Colorado, a body corporate, for and on behalf of the University of Colorado Boulder, having an office at 4845 Pearl East Circle, Suite 200, Boulder, Colorado 80301 (“University”), and ColdQuanta, Inc., a Colorado corporation having its principal office at 1600 Range Street, Suite 103, Boulder, CO, 80301 (“Licensee”).
Background
| A. | The parties entered into a Non-Exclusive License Agreement on<br>February 2, 2012 (the “Agreement”). |
|---|---|
| B. | The parties wish to amend the Agreement to incorporate a three year time limit to the Improvement rights<br>granted to Licensee. |
| --- | --- |
| C. | The parties wish to amend the Agreement to modify the Independent Invention rights granted to Licensee.<br> |
| --- | --- |
| D. | The parties wish to amend the Agreement to limit Licensee’s right to assign this Agreement only as part<br>of a sale of Licensee’s entire business. |
| --- | --- |
Accordingly, the parties agree as follows:
Article 1 Amendment
1.1 Any capitalized terms not defined in this First Amendment have the same meaning as set forth in the Agreement.
1.2 Section 3 of the Agreement is hereby revised to read in its entirety as follows:
SECTION 3. IMPROVEMENTS & INDEPENDENT INVENTIONS
| 3.1 | Improvements: In the event that University develops any Improvements, then for a period of three<br>(3) years from the First Amendment Effective Date, each such Improvement will be added to this Agreement for no additional consideration, provided that the Improvement will be subject to the terms and conditions of this Agreement including<br>reimbursement of patent expenses previously incurred by University associated with such Improvement. For the sake of clarity, any Licensed Product(s) or Licensed Process(es) based | |
|---|---|---|
| First Amendment to Non-Exclusive License Agreement | 1 of 3 | CU Case No. CU1833B-05 |
| --- | --- | --- |
| on the Improvements added under this Agreement will be subject to the same obligations regarding the payment of royalties and milestones as any other Licensed Product(s) or Licensed Process(es),<br>respectively. The Improvement will be added to this Agreement by a written amendment executed by both parties. For a period of three (3) years from the First Amendment Effective Date, University shall disclose each new Improvement to Licensee<br>in reasonable written detail after University’s Venture Partners office receives notification from the inventor of such Improvement. If Licensee notifies University in writing that it does not want to add the Improvement to this Agreement or<br>if the parties fail to execute the written amendment within one-hundred twenty (120) days from the date written disclosure of the Improvement was provided to Licensee, then neither party will be under any<br>further obligation to the other with respect to that particular Improvement, and to the extent an Improvement is jointly owned by the parties, University may license its interest in the Improvement without any further accounting or notification to<br>Licensee. | ||
| --- | ||
| 3.2 | Independent Inventions: In the event that Dana Anderson in his laboratory at the University, or anybody<br>while working in a University laboratory under the supervision or direction of Dana Anderson, makes any invention in the field of ultra-cold matter and related devices and applications (“Independent Invention”), then, for a period<br>of three (3) years from the First Amendment Effective Date, to the extent it is legally able to do so University shall disclose each Independent Invention to Licensee in reasonable written detail after University’s Venture Partners office<br>receives notification from the inventor(s) that such Independent Invention has been made, which disclosure will be treated as University’s confidential information under Section 8. | |
| --- | --- |
1.3 Section 14.1(a) of the Agreement is hereby revised to read in its entirety as follows:
| a. | Assignment by Licensee. Subject to Sections 14.1(c) and (d), Licensee may assign this Agreement as part<br>of a sale of Licensee’s entire business, regardless of whether such a sale occurs through an asset sale, stock sale, merger or other combination. | |
|---|---|---|
| First Amendment to Non-Exclusive License Agreement | 2 of 3 | CU Case No. CU1833B-05 |
| --- | --- | --- |
Article 2 Miscellaneous
2.1 This First Amendment is effective as of the date of the last signature of the parties to this First Amendment (the “FirstAmendment Effective Date”).
2.2 Except as expressly amended by this First Amendment, all provisions of the Agreement remain in full force and effect.
2.3 This First Amendment is governed by and must be construed in accordance with the laws of the State of Colorado.
2.4 This First Amendment together with the Agreement contains the entire understanding and agreement between the parties respecting the subject matter thereof and supersedes all prior understandings and agreements.
2.5 The provisions and clauses of this First Amendment are severable, and in the event that any provision or clause is determined to be invalid or unenforceable under any controlling body of the law, such invalidity or unenforceability will not in any way affect the validity or enforceability of the remaining provisions and clauses hereof.
2.6 This First Amendment may be executed in one or more counterparts and by electronically transmitted signatures, each of which is hereby deemed an original, but all of which together constitute one and the same document. In making proof of this First Amendment, it will not be necessary to produce or account for more than one such counterpart executed by the party against whom the enforcement of this First Amendment is sought.
To evidence the parties’ agreement to this First Amendment, the parties have executed it in duplicate and delivered it on the First Amendment Effective Date.
| University | Company | |
|---|---|---|
| /s/ Brynmor Rees | /s/ Rushton McGarr | |
| Brynmor Rees | Name: Rushton McGarr | |
| Managing Director, Venture Partners at CU Boulder and Assistant Vice Chancellor for Research & Innovation | Title: Chief Financial Officer | |
| 6/28/2021 | June 24, 2021 | |
| Date | Date | |
| First Amendment to Non-Exclusive License Agreement | 3 of 3 | CU Case No. CU1833B-05 |
| --- | --- | --- |
EX-10.18
Exhibit 10.18
Certain identified information has been excluded from this exhibit both because it (i) is not material and (ii) is the type that the issuertreats as private or confidential. Brackets with triple asterisks denote omissions.
Agreement No. 19-00399
EXCLUSIVE LICENSE AGREEMENT
This Exclusive License Agreement (“Agreement”) is made effective on the latest date signed by the parties as set forth on the signature page hereto (“Effective Date”), by and between Wisconsin Alumni Research Foundation (“WARF”), a nonstock, nonprofit Wisconsin corporation, and ColdQuanta, Inc. (“Licensee”), a corporation organized and existing under the laws of Delaware.
WHEREAS, WARF owns certain Licensed Patents, as defined below, and is willing to grant a license to Licensee under them pursuant to the terms of this Agreement herein below; and
WHEREAS, WARF and Licensee have entered into a Research License and Option Agreement (“Option Agreement”) pertaining to the Licensed Patents, WARF Agreement No. 19-00045, which expires on December 31, 2019.
WHEREAS, WARF and Licensee would each like to terminate the Option Agreement upon the full execution of this Agreement; and
WHEREAS, Licensee has committed financial support to the University of Wisconsin-Madison (“University”) pursuant to a separate Standard Research Agreement with the University, dated November 29, 2018 (“University Agreement”), and WARF agrees to abide by the intellectual property terms in the University Agreement.
NOW, THEREFORE, in consideration of the representations, covenants, warranties and agreements set forth below, the parties agree as follows:
Section 1. Definitions.
For the purpose of this Agreement, the Appendix A definitions will apply.
Section 2. Grant.
A. License.
WARF hereby grants to Licensee an exclusive license under the Licensed Patents to make, have made, use, have used, offer for sale, sell, have sold and import Products solely in the Licensed Field and Licensed Territory.
B. Sublicenses.
(i) Sublicensing Right. Licensee may grant to third parties written nonexclusive sublicenses, without the right to further sublicense (except with the prior written consent of WARF), under Licensee’s rights under Section 2A. All such sublicenses shall contain terms and conditions no less restrictive than, no less protective of WARF’s rights than, and consistent with those set forth in this Agreement, shall identify WARF as a third party beneficiary thereof, and shall state that the sublicense is subject to the termination of this Agreement; provided, that Licensee may include in the sublicense an option for the sublicensee, upon termination of this Agreement (so long as the sublicensee is in good standing and not in material breach of the sublicense and Licensee is not in material breach of this
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 1 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
Agreement by action or inaction of the sublicensee) to enter into good faith negotiations with WARF toward the grant of a direct license by WARF to the sublicensee having a scope substantially similar to that of the sublicense, financial terms substantially similar to those of this Agreement, and other terms consistent with, and no less protective of WARF than, those of this Agreement. For clarity, the rights to “have made,” “have used” and “have sold” will include the right for sublicensees to subcontract with other third parties to perform such activities, solely to the extent conducted for or on behalf of the sublicensee in accordance with applicable law, and any such subcontracting shall not be deemed further sublicensing. No sublicense shall purport to grant any rights that extend beyond the scope of rights granted to Licensee under this Agreement. Licensee shall have the same responsibility for the activities of any sublicensee as if the activities were directly those of Licensee; any act or omission of a sublicensee which would be a breach of this Agreement if performed by Licensee shall be deemed to be a breach by Licensee.
(ii) Access to Sublicensing Information. Licensee shall promptly provide WARF with the name, contact information, and address of each sublicensee, as well as information regarding the number of full-time employees of each such sublicensee to allow WARF to determine whether it can maintain its small entity filing status for patent prosecution and maintenance purposes. Thereafter, Licensee shall deliver to WARF semi-annual reports, within thirty (30) days after each June 30th and December 31st during the term of this Agreement, summarizing the business and activities of each sublicensee relating to the Licensed Patents containing sufficient details regarding the sublicensees’ business relating to the Licensed Patents to assess when, whether, and the extent to which each sublicensee may be practicing its sublicensed rights. In addition, upon WARF’s written request Licensee shall provide to WARF copies of each sublicense agreement and any amendments thereto, each of which shall be the Confidential Information of Licensee and subject to the obligations of confidentiality under Section 16. Licensee will ensure that WARF has audit rights for each sublicense agreement of the same scope as provided in Section 6 hereof with respect to Licensee, and shall include appropriate terms providing for such audit rights in all sublicense agreements.
C. Reservation of Rights.
In addition to the United States Government Rights identified in Section 14, WARF hereby reserves the right to grant non-profit research institutions and governmental agencies non-exclusive licenses to practice and use the inventions of the Licensed Patents for Non-Commercial Research Purposes. WARF, the University of Wisconsin, and the inventors of the Licensed Patents will have the right to publish any information included in the Licensed Patents.
D. Improvements.
Licensee hereby grants and shall require its sublicensee(s) to grant to WARF, the University of Wisconsin, the inventors of the Licensed Patents, and all non-profit research institutions and governmental agencies a covenant not to sue under any Improvement for Non-Commercial Research activities. “Improvements” shall mean any patented modification or new use of an invention described in the Licensed Patents that (1) incorporates, employs, or requires an invention of the Licensed Patents; or (2) if not for the license granted under this Agreement, would infringe one or more claims of the Licensed Patents. For clarity, this Section 2D shall not be construed as requiring Licensee to disclose Improvements to, or otherwise enable the use of Improvements by, the foregoing parties.
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 2 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
Section 3. Development.
A. Licensee agrees to, represents that it intends to, and warrants that it will use commercially reasonable efforts to diligently develop, seek any necessary regulatory approval for, manufacture, market, and sell Products throughout the term of this Agreement, including, without limitation, using commercially reasonable efforts to perform those activities listed in Licensee’s Development Plan attached hereto as Appendix E, as the same may be adjusted from time to time. Licensee agrees as of the Effective Date that said Development Plan is reasonable and that it will take all commercially reasonable steps to meet the development program as set forth therein.
B. Beginning in December, 2019 and until the Date of First Commercial Sale, Licensee will provide WARF with a written Development Report summarizing its development activities since the last Development Report and any necessary adjustments to the Development Plan. Licensee will submit Development Reports on a semi-annual basis within thirty (30) days of June 30 and December 31 of each calendar year and include sufficient detail to enable WARF to determine Licensee’s progress toward the Development Plan. Licensee’s books and records regarding its development activities with respect to the Licensed Patents will be subject to the obligations and audit procedures set forth in Section 6.
Section 4. Consideration.
A. License Fee.
Licensee agrees to pay to WARF a license fee of [***], to be paid in two installments. [***] of this license fee will be credited from the option fee paid by Licensee to WARF under the Option Agreement. The first installment of [***] will be due to WARF [***] of the Effective Date; the second installment of [***] will be due to WARF on or before the second anniversary of the Effective Date.
B. Royalty.
In addition to the Section 4A license fee, Licensee agrees to pay to WARF as “earned royalties” a royalty calculated as a percentage of the Selling Price of Products in accordance with the terms and conditions of this Agreement. The royalty will remain fixed while this Agreement is in effect at the rate of [***] of the Selling Price of any Product that is made, used, imported, sold or offered for sale in a given country in which there is one or more Licensed Patent that Covers such Product (with the term “Cover” meaning that, but for the license granted hereunder, the making, using, importing, sale or offering for sale of such Product would infringe such Licensed Patents). Such royalty will be earned, on a country-by-country and Product-by-Product basis, until the date of expiration of the last-to-expire Licensed Patent that Covers a given Product in a given country. The royalty is deemed earned as of the earliest of the date (i) the Product is sold, leased, provided, or otherwise transferred for consideration, (ii) an invoice is sent by Licensee or its sublicensee(s) with respect to such Product, or (iii) the Product is transferred or provided to or a third party without charge or at a discount.
C. Sublicensing Royalties and Fees.
(i) With respect to sublicenses granted by Licensee under Section 2B, Licensee will pay to WARF the earned royalties payable under Section 4B on the Selling Price of Products sold by sublicensees in the amount equal to what Licensee would have been required to pay to WARF had Licensee sold the amount of Products sold by such sublicensees.
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 3 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
(ii) In addition, if Licensee receives any fees, minimum royalties, or other payments in consideration for any rights granted under a sublicense, or option to sublicense, or other similar rights under sublicenses granted by Licensee under Section 2 (such payments, subject to the exceptions below, hereinafter “Sublicense Fees”), then Licensee will pay WARF (a) [***] of such Sublicense Fees received under a sublicense agreement executed on or before December 31, 2022 or (b) [***] of such Sublicense Fees received under a sublicense agreement executed after December 31, 2022, in each case within [***] of receipt of such Sublicense Fees, and otherwise in the manner specified in Section 4F, with the amounts due to WARF being deemed earned as of the date the Sublicense Fees are received by Licensee. Licensee will not receive from its sublicensees anything of value in lieu of cash payments in consideration for any sublicense granted under this Agreement without the express prior written consent of WARF. Additionally, Licensee will not agree to postpone the payment date of any Sublicense Fee in exchange for any payment or other consideration not itself accounted for as part of the Sublicense Fee. No payments owed for Sublicense Fees will be prorated, whether the sublicense to the Licensed Patents is bundled with other licenses or sublicenses or not, without WARF’s written consent, not to be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Sublicense Fees will not include (1) payments made to Licensee for Non-Commercial Research activities performed or services provided by Licensee, (2) payments made for materials supplied or produced by Licensee, where no Licensed Patent Covers such materials, (3) amounts received by Licensee as the purchase price, at fair market value, for equity securities of Licensee (including stock of whatever class or series, and including the purchase price for warrants and the exercise price under such warrants, or as convertible debt, and the like), (4) amounts received by Licensee for patent prosecution costs and expenses related to any patent rights that are being sublicensed, provided such amounts reflect actual patent prosecution costs and expenses incurred by Licensee in filing, prosecuting, and maintaining the Licensed Patents and do not exceed what Licensee paid to WARF under Section 4E, (5) amounts received by Licensee in the form of a loan (but not convertible debt), to the extent such loan is not forgiven in contemplation of any rights under the Licensed Patents, and (6) payments based directly upon the amount or value of Products sold by the sublicensee (because any such amounts are owed already under Section 4B).
D. Minimum Royalty.
Licensee further agrees to pay to WARF a minimum royalty of [***] per calendar year or part thereof during which this Agreement is in effect, the first of which will be due for calendar year 2023, against which any earned royalty paid for the same calendar year will be credited. The minimum royalty for a given year will be due at the time payments are due for the calendar half ending on December 31. It is understood that the minimum royalties will apply on a calendar year basis, and that sales of Products requiring the payment of earned royalties made during a prior or subsequent calendar year will have no effect on the annual minimum royalty due to WARF for any other given calendar year.
E. Patent Prosecution and Costs.
(i) Licensee agrees to reimburse WARF [***] towards the costs incurred by WARF in filing, prosecuting, and maintaining the Licensed Patents (“Patent Costs”). Such Patent Costs will be paid to WARF in five equal installments, to be paid annually. The first installment of [***] will be due to WARF on December 31, 2019. The remaining installments will be due to WARF on December 31
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 4 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
of each year. For each patent application or patent added as a Licensed Patent to Appendix B after the Effective Date, Licensee will pay to WARF the applicable Patent Costs identified in Appendix F. Additional invoices will be sent for Licensed Patents added to Appendix B after the Effective Date. If Licensee fails to pay any amount owed under this Section 4E by the invoice due date, WARF will have, at its sole discretion, the right to abandon the applicable filed Licensed Patents and/or remove it from the Licensed Patents.
(ii) WARF is not obligated to make or maintain any foreign filing or continuing United States application of the Licensed Patents; provided that, WARF shall provide Licensee timely notice of an upcoming deadline or decision date to the extent practicable. If Licensee wants WARF to make or maintain such foreign filings or continuing U.S. application, Licensee must (1) notify WARF in writing indicating those countries in which Licensee wants WARF to pursue foreign patent protection or the type of continuing U.S. application Licensee wants WARF to file and (2) pay to WARF the amounts set forth in Appendix F for the selected countries.
(iii) WARF reserves the exclusive right to file, prosecute, maintain, reexamine, and reissue all patent applications, at its own expense, in any countries not requested by Licensee pursuant to this Section 4E. Such patent applications and any resulting patents will not be included in the Licensed Patents. Licensee acknowledges that if the United States Government (through any of its agencies or otherwise) has funded research, during the course of or under which any of the inventions of the Licensed Patents were conceived or made, the United States Government is entitled, as a right, under the provisions of 35 U.S.C. § 200-212 and applicable regulations of Chapter 37 of the Code of Federal Regulations, to make and maintain foreign filings in those countries not selected by Licensee and/or WARF.
(iv) Unless Licensee is in breach of any term or condition of this Agreement, including, without limitation, for failure to timely reimburse WARF for Patent Costs hereunder,WARF will prosecute all applications it files at Licensee’s request pursuant to this Section 4E until WARF reasonably determines that continued prosecution is unlikely to result in the issuance of a relevant and valuable patent. Licensee shall have the right to review and comment on any significant prosecution actions and correspondence received from the relevant patent office pertaining to the filing, prosecution, and maintenance of the Licensed Patents. WARF shall forward a copy of such actions and received correspondence to Licensee upon their receipt by WARF, or as soon thereafter as reasonably practicable under the circumstances. WARF shall review and consider in good faith the opinions and proposals submitted by Licensee if such opinions and proposals are provided to WARF within fourteen (14) days from the date WARF provided the copy of the action or received correspondence to Licensee. If WARF decides to abandon prosecution or maintenance of any patent or patent application under the Licensed Patents, WARF shall provide Licensee notice of WARF’s intent to abandon such patent or application and the parties will determine in good faith how to proceed, taking into account the Patent Costs already expended; provided that so long as Licensee and it sublicensee(s) are and remain current with respect to all obligations owed to WARF (including without limitation the payment of all Patent Costs) and not otherwise in breach of this Agreement, WARF will not abandon the applicable patent or patent application unless the parties so agree.
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 5 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
F. Accounting; Payments.
(i) Amounts owing to WARF under Sections 4B and 4C will be paid on a semi-annual basis, with such amounts due and received by WARF within thirty (30) days of the end of the calendar half ending on June 30 or December 31 in which such amounts were earned. A full accounting showing how such amounts have been calculated will be submitted to WARF on the date of each such payment. For royalties, such accounting will be on a per country and product line, model, or tradename basis and will be summarized on the form shown in Appendix C of this Agreement, which will include a semi-annual royalty forecast. In the event no payment is owed to WARF, a statement setting forth that fact will be supplied to WARF. Any payments not made when due will bear interest at the lower of (a) [***], or (b) the maximum rate permitted by law. However, in no event will this interest provision be construed as a grant of permission for any payment delays.
(ii) Except as otherwise directed, all amounts owing to WARF under this Agreement will be paid in U.S. dollars using the address provided in Section 15(a) or paid via wire transfer if agreed upon. All royalties and fees stated in currencies other than U.S. dollars will be converted at the rate that is the arithmetic average of the rate shown in the Wall Street Journal, New York Edition on the last business day of each month of the calendar half on the day preceding the payment due date. WARF is exempt from paying income taxes under U.S. law. Therefore, all payments due under this Agreement will be made without deduction for taxes, assessments, or other charges of any kind which may be imposed on WARF by any government outside of the United States or any political subdivision of such government with respect to any amounts payable to WARF pursuant to this Agreement. All such taxes, assessments, or other charges that may reduce WARF’s net royalties, such as bank transfer fees, will be assumed by Licensee or its sublicensee(s).
Section 5. Certain Warranties.
A. WARF warrants that except as otherwise provided under Section 14 of this Agreement with respect to U.S. Government interests, it is the owner of the Licensed Patents or otherwise has the right to grant the licenses granted to Licensee in this Agreement. However, nothing in this Agreement will be construed as: (i) a warranty or representation by WARF as to the validity or scope of any of the Licensed Patents; (ii) a warranty or representation that any product or process made, used, sold, or otherwise disposed of under or in association with the license granted in this Agreement is or will be free from any claim of infringement or misappropriation of any intellectual property rights other than the Licensed Patents; or (iii) an obligation to furnish any know-how not provided in the Licensed Patents or any services other than those specified in this Agreement.
B. EXCEPT AS SET FORTH IN SECTION 5A, WARF MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING NO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, MARKETABILITY, REGULATORY APPROVAL, SAFETY, OR ACCURACY. WARF ASSUMES NO RESPONSIBILITIES AND MAKES NO PROMISES WHATSOEVER WITH RESPECT TO THE USE, SALE, OR OTHER DISPOSITION BY LICENSEE, ITS SUBLICENSEE(S), OR THEIR VENDEES OR OTHER TRANSFEREES, OF PRODUCTS OR ANY OTHER PRODUCTS OR SERVICES EMPLOYING, EMPLOYED IN, INCORPORATING, OR MADE BY USE OF INVENTIONS LICENSED UNDER THIS AGREEMENT.
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 6 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
C. Unless a valid waiver is obtained from the applicable funding agency at Licensee’s written request, Licensee represents and warrants that all Products that are used or sold in the United States under the license granted herein (or any sublicense thereunder) will be manufactured substantially in the United States to the extent required by 35 U.S.C § 204 and applicable regulations of Chapter 37 of the Code of Federal Regulations.
Section 6. Recordkeeping.
A. Licensee and its sublicensee(s) will keep books and records sufficient to verify the accuracy and completeness of Licensee’s and its sublicensee(s)’s commercialization activities and accounting referred to above, including, without limitation, invoices for the following, to the extent applicable: studies advancing the development of Products, laboratory notebooks, internal job cost records, inventory, purchase, and invoice records relating to the Products or their development or manufacture. Such books and records will be preserved for a period not less than six (6) years after they are created during and after the term of this Agreement.
B. Licensee and its sublicensee(s) will take all steps necessary so that WARF may, via a WARF employee, attorney or registered CPA designee, in each case who is bound by confidentiality obligations no less restrictive than those set forth in Section 16, and upon reasonable notice and during regular business hours within thirty (30) days of its request, review and copy all the books and records at a single U.S. location to allow WARF to verify the accuracy of Licensee’s royalty reports and Development Reports, the royalty reports of its sublicensee(s), and any applicable Sublicense Fees. If a payment deficiency is determined, Licensee and its sublicensee(s), as applicable, will pay the deficiency outstanding within thirty (30) days of receiving written notice thereof, plus interest on outstanding amounts as described in Section 4F. In cases where the deficiency exceeds the lesser of [***] of the royalties paid for that year or [***], then Licensee or its sublicensee(s) will be responsible for paying WARF’s out-of-pocket expenses incurred with respect to such review.
Section 7. Term and Termination.
A. The term of this license and Agreement will begin on the Effective Date and continue until the earliest of the date that: (1) this Agreement is terminated as provided for herein; (2) no Licensed Patent remains pending, enforceable, or appealed anywhere in the Licensed Territory; or (3) the payment of earned royalties under Sections 4B and 4C, once begun, ceases for more than one calendar year.
B. Licensee may terminate this Agreement at any time by giving at least ninety (90) days’ written and unambiguous notice of such termination to WARF, which will include a statement of the reasons for termination.
C. WARF may terminate this Agreement or amend this Agreement to convert the license grant under Section 2A to be non-exclusive, at WARF’s option, upon ninety (90) days’ written notice to Licensee specifying whether WARF intends to terminate or amend the license grant (“Triggering Event Notice”) if any one or more of the following occurs (each, a “Triggering Event”):
(i) [***].
(ii) [***].
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 7 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
However, the parties recognize that there may be circumstances beyond Licensee’s reasonable control that result in one or more Triggering Event(s) despite Licensee’s use of commercially reasonable efforts to diligently develop, manufacture, market and sell Products. Such circumstances may include that a governmental agency imposes additional and unforeseeable obligations or withholds or delays regulatory approval or other required regulatory decision or action that causes the one or more Triggering Event(s), or Licensee encounters unanticipated technical problems that have been reported to WARF in Licensee’s Development Reports promptly after Licensee knew of the technical problems and that Licensee has been unable to overcome despite its continued and uninterrupted commercially reasonable efforts, or other causes beyond Licensee’s reasonable control. Accordingly, if a Triggering Event occurs then, during the ninety (90) day period following the Triggering Event Notice, Licensee shall have the right (a) to cure the applicable deficiency or (b) to show cause why this Agreement should not be terminated or the license granted under Section 2A should not be converted to non-exclusive (e.g., if the Triggering Event occurs as a result of circumstances beyond Licensee’s reasonable control), and if Licensee does so, WARF will not have the right to terminate this Agreement or convert the license granted under Section 2A to non-exclusive. If Licensee fails to do so in such 90-day period and the parties are unable to resolve the matter through negotiation, WARF may terminate this Agreement or amend this Agreement to convert the license grant under Section 2A to be non-exclusive upon written notice to Licensee.
Notwithstanding any of the foregoing, if Licensee is not otherwise in breach of this Agreement and provides evidence to WARF that it has been and is using commercially reasonable efforts to diligently develop and/or commercialize Products and meet the applicable deadlines above, Licensee shall have the right, upon providing written notice to WARF prior to the occurrence of a Triggering Event, to extend the applicable deadline(s) above by one (1) additional year by paying an extension fee of [***].
D. If Licensee at any time defaults in the timely payment of any monies due to WARF hereunder, fails to timely provide to WARF any Development Report in accordance with Section 3B or provides any false information with respect thereto, fails to actively pursue the Development Plan using commercially reasonable efforts in accordance with Section 3A, or commits any material breach of any other covenant, representation, or warranty herein contained, and Licensee fails to remedy any such breach or default within ninety (90) days after written notice thereof by WARF, or if Licensee commits any act of bankruptcy, becomes insolvent, is unable to pay its debts as they become due, files a petition under any bankruptcy or insolvency act, or has any such petition filed against it which is not dismissed within sixty (60) days, or if Licensee or its sublicensee(s) offer any component of the Licensed Patents to their creditors, WARF may, at its option, terminate this Agreement immediately by giving notice of termination to Licensee.
E. Upon the effective termination of this Agreement, Licensee and its sublicensee(s) will remain obligated to provide an accounting for and to pay to WARF within thirty (30) days of termination all amounts owed under this Agreement, including without limitation royalties earned up to the date of the termination, and any minimum royalties due, which amount will be prorated as of the date of termination by the number of days elapsed in the applicable calendar year.
F. Waiver by either party of a single breach or default, or a succession of breaches or defaults, will not deprive such party of any right to terminate this Agreement in the event of any subsequent breach or default.
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 8 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
Section 8. Assignability.
Licensee shall not assign or transfer this Agreement, nor any of the rights granted herein, except pursuant to a Change of Control Event, without the prior written consent of WARF. In the case of any assignment pursuant to a Change of Control Event, the acquiring entity must agree in writing (naming WARF a third party beneficiary) to assume all obligations and liabilities, past and future, of Licensee under this Agreement. Within thirty (30) days after the occurrence of any Change of Control Event, Licensee shall notify WARF in writing of such Change of Control Event and shall pay to WARF a transfer fee of [***] to allow the transfer of the license granted herein to the entity to whom control has been transferred in such Change of Control Event.
Section 9. Contest of Validity.
Licensee must provide WARF at least three (3) months prior written notice before filing any proceeding that contests the validity of any Licensed Patent during the term of this Agreement. In the event Licensee files any such proceeding, Licensee agrees to pay to WARF, directly and not into any escrow or other account, all royalties and other amounts due in view of Licensee’s activities under the Agreement during the period of challenge. Should the outcome of such contest determine that any claim of a Licensed Patent challenged by Licensee is valid and, if infringement were at issue in such contest, would be infringed by the sale of Products by Licensee in the absence of the license granted under this Agreement, Licensee will thereafter, and for the remaining term of this Agreement, pay a royalty rate of [***] the royalty rate specified in Section 4B of this Agreement and the entirety of WARF’s legal (including attorney) fees and costs incurred during such proceeding.
Section 10. Enforcement.
WARF intends to protect the Licensed Patents against infringers or otherwise act to eliminate infringement, when, in WARF’s sole judgment, such action may be necessary, proper, and justified and makes reasonable business sense considering all factors. In the event that Licensee or its sublicensee(s) believe there is infringement of any Licensed Patent under this Agreement which is to its substantial detriment, Licensee will provide WARF with notification and reasonable evidence of such infringement. Upon request by WARF, Licensee will provide WARF with such assistance and information as may be useful to WARF in connection with WARF’s taking such action (if the cause of action arose during the term of this Agreement and WARF reimburses Licensee for Licensee’s reasonable out-of-pocket expenses). For clarity, in no event will Licensee or any sublicensee have the right to demand that WARF initiate or join in any suit for infringement. Notwithstanding the foregoing, if any infringement of the Licensed Patents which is to the substantial detriment of Licensee has not been discontinued within six (6) months after written request by Licensee to WARF and (i) WARF has not by the end of such period taken action intended to abate or terminate the infringing action, (ii) Licensee is not in material breach of this Agreement, and (iii) Licensee’s rights are still exclusive hereunder, Licensee may, subject to WARF’s written consent, bring a litigation action to enforce the Licensed Patents. During such litigation Licensee shall act in good faith to preserve WARF’s right, title, and interest in and to the Licensed Patents and shall keep WARF advised as to the status of the litigation, and shall not enter into a settlement of such litigation without first allowing WARF the option of either approving the settlement (such approval not to be unreasonably withheld, conditioned or delayed) or of continuing the litigation at WARF’s expense for WARF’s benefit (upon payment to Licensee of its out-of-pocket costs and expenses of the litigation). In no event shall Licensee
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 9 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
have the right to require WARF, without its consent, to join as a party in any action brought by Licensee. If despite criteria (i)-(iii) being met WARF does not give Licensee its consent to bring such an action, then Licensee may reduce the royalty amounts owed under Section 4B with respect to the country or countries where the infringement is occurring by [***] until such infringement is terminated, abated, or otherwise no longer to Licensee’s substantial detriment. If WARF does bring an infringement suit or action, Licensee may participate in such suit or action at its own expense, and WARF shall keep Licensee advised as to the status of the litigation. Nothing herein shall permit or allow Licensee to commence any action for infringement of the Licensed Patent for any activity allowed under a settlement arrangement entered into by WARF in good faith with a third party infringer in connection with a suit or action taken by WARF to eliminate infringement.
Section 11. Patent Marking.
Licensee and its sublicensee(s) will mark all Products or Product packaging or advertising and invoices in the case of Products that are services with the appropriate patent number reference in compliance with the requirements of 35 U.S.C. § 287.
Section 12. Product Liability; Conduct of Business.
A. Licensee will, at all times during the term of this Agreement and thereafter, indemnify, defend, and hold harmless the inventors of the Licensed Patents, WARF and the University of Wisconsin-Madison, and their respective employees, trustees, contractors, and agents against all third party claims and expenses, including legal expenses and reasonable attorneys’ fees, arising out of the death of or injury to any person or persons or out of any damage to property and against any other third party claim, proceeding, demand, expense, loss, and liability of any kind whatsoever resulting from each of the following: (1) the development, design, production, manufacture, sale, use, lease, consumption, marketing, import/export, or advertisement of Products by or on behalf of Licensee or its sublicensee(s) hereunder, (2) the exercise of any right or the performance or non-performance of any obligation by Licensee or its sublicensee(s) hereunder, or (3) the negligent, reckless, or willful actions or omissions of Licensee. WARF at all times reserves the right to select and retain counsel of its own to defend WARF’s interests.
B. Licensee warrants that it will, on or before the launch of its first Product, maintain and will continue to maintain liability insurance coverage appropriate to the risk involved in marketing the Products subject to this Agreement and that such insurance coverage lists WARF and the inventors of the Licensed Patents as additional insureds. Upon WARF’s request, Licensee will present evidence to WARF that such coverage is being maintained.
Section 13. Use of Names.
Neither Licensee nor its sublicensee(s) will use WARF’s name, or any derivation thereof, the name of any inventor of inventions governed by this Agreement, or the name of the University of Wisconsin in sales promotion, advertising, or any other form of publicity without the prior written approval of the entity or person whose name is being used.
Section 14. United States Government Interests.
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 10 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
It is understood that if the United States Government (through any of its agencies or otherwise) has funded research, during the course of or under which any of the inventions of the Licensed Patents were conceived or made, the United States Government is entitled, as a right, under the provisions of 35 U.S.C. §§ 200-212 and applicable regulations of Chapter 37 of the Code of Federal Regulations, to a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced the invention of such Licensed Patents for governmental purposes. Any license granted under this Agreement to Licensee or any of its sublicensees will be subject to such right.
Section 15. Notices.
Any notice required to be given pursuant to the provisions of this Agreement will be in writing and will be deemed to have been given at the earlier of the time when actually received as a consequence of any effective method of delivery, including but not limited to hand delivery or electronic transmission, i.e., email, transmission by telecopier or delivery by a professional courier service or the time when sent by certified or registered mail addressed to the party for whom intended at the address below or at such changed address as the party will have specified by written notice, provided that any notice of change of address will be effective only upon actual receipt.
| (a) | Wisconsin Alumni Research Foundation |
|---|
Attn: Contract Manager
614 Walnut Street, 13^th^ Fl.
Madison, Wisconsin 53726
Phone: [***]
Email: [***]
| (b) | ColdQuanta, Inc. |
|---|
Attn: Paul Schroeter
3030 Sterling Circle
Boulder, Colorado 80301
Phone: (303) 440-1284
Email: [***]
Section 16. Confidentiality.
A. Each party hereto agrees to keep any Confidential Information of the disclosing party confidential using methods at least as stringent as each party uses to protect its own confidential information. “Confidential Information” will include (i) the terms of this Agreement, (ii) Licensee’s Development Plan and Development Reports, Royalty Reports and forecasts, sublicenses, the Licensed Patents and all information concerning them (including without limitation all know-how, research results and similar information held by WARF) whether or not marked as confidential or proprietary, and (iii) any other information either (a) marked confidential or accompanied by correspondence indicating such information is exchanged in confidence between the parties, or (b) that is, or should be, reasonably understood to be otherwise proprietary or confidential to the disclosing party. Except as may be authorized in advance in writing by the disclosing party, the receiving party will only grant access to the disclosing party’s Confidential Information to (1) with respect to Licensee as the receiving party, its actual and potential sublicensee(s), and (2) those employees, consultants and contractors of the receiving party (and in the case of Licensee as the receiving party, its sublicensee(s)) who have a need to know such information
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 11 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
for purposes contemplated by this Agreement and who are bound by obligations of confidentiality no less restrictive than those set forth in this Section 16. Licensee and its sublicensee(s) will not use any Confidential Information to WARF’s detriment, including, but not limited to, claiming priority to the Licensed Patents in any patent prosecution, and WARF will not use any Confidential Information of Licensee to Licensee’s detriment.
B. The confidentiality obligations set forth above apply to all or any part of the Confidential Information disclosed hereunder except to the extent that: (i) the receiving party can show by competent evidence that it possessed the information prior to its receipt from the disclosing party; (ii) the information was already available to the public or became so through no fault of the receiving party; (iii) the information is subsequently disclosed to the receiving party by a third party that has the right to disclose it free of any obligations of confidentiality; (iv) the information is required by law, rule, regulation, or judicial process to be disclosed (if such requirement arises, the receiving party will, prior to any such disclosure, promptly notify the disclosing party and provide assistance in any reasonable effort to obtain confidential treatment with respect to such disclosure); or (v) five (5) years have elapsed from the expiration or termination of this Agreement.
Section 17. Miscellaneous.
This Agreement will be governed by and construed in all respects in accordance with the laws of the State of Wisconsin. If any provisions of this Agreement are or will come into conflict with the laws or regulations of any jurisdiction or any governmental entity having jurisdiction over the parties or this Agreement, those provisions will be deemed automatically deleted, if such deletion is allowed by relevant law, and the remaining terms and conditions of this Agreement will remain in full force and effect. If such a deletion is not so allowed or if such a deletion leaves terms thereby made clearly illogical or inappropriate in effect, the parties agree to substitute new terms as similar in effect to the present terms of this Agreement as may be allowed under the applicable laws and regulations. The parties hereto are independent contractors and not joint venturers or partners.
Section 18. Integration; Execution.
A. This Agreement constitutes the full understanding between the parties with reference to the subject matter hereof and supersedes all previous and contemporaneous communications, representations, agreements or understandings, either oral or written, between the parties with respect to the subject matter hereof, including the Option Agreement, which is hereby terminated and superseded by this Agreement as of the Effective Date, and no statements or agreements by or between the parties, whether orally or in writing made prior to or at the signing hereof, will vary or modify the written terms of this Agreement. For clarity, this Agreement does not supersede the University Agreement, which remains in full force and effect in accordance with its terms. Neither party will claim any amendment, modification, or release from any provisions of this Agreement by mutual agreement, acknowledgment, or otherwise, unless such mutual agreement is in writing, signed by the other party, and specifically states that it is an amendment to this Agreement.
B. The persons signing on behalf of WARF and Licensee hereby warrant and represent that they have authority to execute this Agreement on behalf of the party for whom they have signed. This Agreement may be executed in one or more counterparts by the parties by signature of a person having authority to bind the party, each of which when executed and delivered by facsimile, electronic
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 12 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
transmission, or by mail delivery, will be an original and all of which will constitute but one and the same Agreement. The parties agree this Agreement may be electronically signed and that the electronic signatures appearing on this Agreement are the same as handwritten signatures for the purposes of validity, enforceability and admissibility. No agreement between the parties will exist unless the duly authorized representatives of Licensee and WARF have signed this document within sixty (60) days of the Effective Date written on the first page of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the dates indicated below, effective as of the Effective Date defined in the preamble paragraph hereof.
| WISCONSIN ALUMNI RESEARCH FOUNDATION | |
|---|---|
| Signature: | /s/ Leigh Cagan |
| Name: Leigh Cagan | |
| Title: Chief Technology Commercialization Officer | |
| Date: 10/1/2019 | |
| COLDQUANTA, INC. | |
| Signature: | /s/ Leigh Cagan |
| Name: Leigh Cagan | |
| Title: Chief Technology Commercialization Officer | |
| Date: 9/30/2019 | |
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 13 of 20 |
| --- | --- |
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
APPENDIX A
DEFINITIONS
A. “Change of Control Event” means:
(i) the sale or disposition of all or substantially all the assets of the Company or its direct or indirect parent corporation;
(ii) the reorganization, merger, consolidation, or similar transaction involving the Company or its direct or indirect parent corporation which results in the voting securities of such entity outstanding immediately prior to that transaction ceasing to represent at least 50% of the combined voting power of the surviving entity immediately after such transaction;
(iii) the acquisition in one or more transactions by any “person,” as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), together with any of such person’s “affiliates” or “associates,” as such terms are used in the Exchange Act, of 40% or more of the outstanding shares of the voting capital stock of the Company or its direct or indirect parent corporation (excluding any employee benefit plan or related trust sponsored or maintained by that entity); or
(iv) any event or series of events in which the individuals who are the directors of the Company or its direct or indirect parent corporation as of the effective date of this Agreement (“Incumbent Directors”) cease for any reason to constitute at least fifty percent (50%) of the board of directors of that entity; provided, however, that if any new director is approved by a vote of at least fifty percent (50%) of the Incumbent Directors, such new director shall be considered an Incumbent Director.
B. “Date of First Commercial Sale” means the date when Licensee’s cumulative earned royalties paid to WARF pursuant to Section 4B exceeds [***].
C. “Development Report” means a written account of Licensee’s progress under the Development Plan having at least the information specified on Appendix D to this Agreement.
D. “Licensed Field” is all fields.
E. “Licensed Patents” means: those patents and patent applications listed on Appendix B attached hereto; any divisional, continuation, continuation-in-part (but only to the extent such continuation-in-part claims an invention claimed in, or is entitled to the priority date of, a patent or patent application listed on Appendix B as of the Effective Date), substitute, or reexamination applications thereof; each patent that issues or reissues from any of the foregoing; each patent that issues or reissues from any patent application added to Appendix B, but solely to the extent Licensee timely reimburses WARF for the Patent Costs related thereto as outlined in Section 4E; and any reissues, reexaminations or extensions of any of the foregoing.
F. “Licensed Territory” is worldwide.
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 14 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
G. “Non-Commercial Research Purposes” means use for academic research purposes or other not-for-profit or scholarly purposes, in each case not involving the performance of services for a fee or the production or manufacture of products for sale to third parties or commercial purposes.
H. “Products” means any and all products and services that incorporate, comprise, employ, or are in any way produced by the practice of an invention claimed in the Licensed Patents in the applicable country; or the manufacture, use, sale, offer for sale, importation, or marketing of which product or service in the country in question would (without the grant of a license) otherwise constitute infringement of any claims of the Licensed Patents.
I. “Selling Price” means, in the case of Products that are sold, leased or otherwise transferred, the invoice price to the end user of Products less any of the following items, but only insofar as these items are commercially reasonable under the circumstances, documented in writing, pertain specifically to the sale of the Products, were actually included on the invoice or accounted for in accordance with Licensee’s or sublicensee’s standard accounting procedures, consistently applied, and were not given in exchange for anything of value (such as data, in-kind consideration, or commitments to purchase other products or services): (a) credits and allowances because of returned Products, damaged goods or rejections, and the actual amount of any write-offs for bad debt (provided that a commercially reasonable attempt was made to collect the same, and any amounts subsequently recovered will be included in the Selling Price), (b) shipping, packaging, freight or insurance costs, (c) customary cash, trade or quantity discounts and/or rebates actually granted or allowed; and (d) taxes (other than income or withholding taxes), duties, tariffs, or other governmental charges levied on the sale of Product, including VAT, excise taxes, sales taxes and use taxes. The foregoing deductions (b)—(d) applicable to a given invoice shall not exceed an aggregate maximum of [***] of that invoice. The “Selling Price” for a Product that is transferred to a third party without charge or at a discount (beyond customary discounts as provided above) will be the average invoice price to the end user of that type of Product during the applicable calendar half.
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 15 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
APPENDIX B
LICENSED PATENTS
| REFERENCE<br><br><br>NUMBER | COUNTRY | APPLICATION<br><br><br>SERIAL NUMBER | FILING DATE | PATENT NUMBER |
|---|
SYSTEM AND METHOD FOR OPTICAL CONFINEMENT OF ATOMIC PARTICLES (Saffman, Lichtman)
| P140422US01 | USA | 14/474702 | 9/2/2014 | 9355750 |
|---|
SYSTEM AND METHOD FOR CONTROLLING PARTICLES USING PROJECTED LIGHT (Saffman)
| P190053US01 | USA | 16/239997 | 1/4/2019 |
|---|---|---|---|
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 16 of 20 | ||
| --- | --- | ||
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
APPENDIX C
WARF ROYALTY REPORT
| Licensee: ColdQuanta, Inc. | Agreement No: 19-00399 |
|---|---|
| Inventor: Saffman | P#: P140422US01, P190053US01 |
| Period Covered: From: | Through: |
| Prepared By: | Date: |
| Approved By: | Date: |
If license covers several major product lines, please prepare a separate report for each line. Then combine all product lines into a summary report.
Report Type:☐ Single Product LineReport:
☐ Multiproduct Summary Report. Page 1 of ______ Pages
☐ Product Line Detail. Line: _________ Tradename: ____________Page: ____
| Country | Gross Sales($) | * Less:Allowances | Net Sales | Royalty Rate | Period RoyaltyAmount | |
|---|---|---|---|---|---|---|
| This Year | Last Year | |||||
| TOTAL: |
Total Royalty: ______________ Conversion Rate: ______________ Royalty in U.S. Dollars: $_______
The following royalty forecast is non-binding and for WARF’s internal planning purposes only:
Royalty Forecast Under This Agreement: Next Half:______ H2:______
| * On a separate page, please indicate the reasons for returns or other adjustments if<br>significant.<br> <br>Also note any unusual occurrences that affected royalty amounts during this period.<br><br><br>To assist WARF’s forecasting, please comment on any significant expected trends in sales volume. | |
|---|---|
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 17 of 20 |
| --- | --- |
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
APPENDIX D
DEVELOPMENT REPORT
A. Date development plan initiated and time period covered by this report.
B. Development Report (4-8 paragraphs).
| 1. | Activities completed since last report including the object and parameters of the development, when initiated,<br>when completed and the results. |
|---|---|
| 2. | Activities currently under investigation, i.e., ongoing activities including object and parameters of such<br>activities, when initiated, and projected date of completion. |
| --- | --- |
C. Future Development Activities (4-8 paragraphs).
| 1. | Activities to be undertaken before next report including, but not limited to, the type and object of any<br>studies conducted and their projected starting and completion dates. |
|---|---|
| 2. | Estimated total development time remaining before a product will be commercialized. |
| --- | --- |
D. Changes to Development Plan submitted to WARF (2-4 paragraphs).
| 1. | Reasons for change. |
|---|---|
| 2. | Variables that may cause additional changes. |
| --- | --- |
E. Items to be provided if applicable:
| 1. | Information relating to Product that has become publicly available, e.g., published articles, competing<br>products, patents, etc. |
|---|---|
| 2. | Development work being performed by third parties other than Licensee to include name of third party, reasons<br>for use of third party, planned future uses of third parties including reasons why and type of work. |
| --- | --- |
| 3. | Update of competitive information trends in industry, government compliance (if applicable) and market plan.<br> |
| --- | --- |
PLEASE SEND DEVELOPMENT REPORTS TO:
Wisconsin Alumni Research Foundation
Attn.: Contract Coordinator
614 Walnut Street
P.O. Box 7365
Madison, WI 53707 7365
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 18 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
APPENDIX E
DEVELOPMENT PLAN
(Attached)
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 19 of 20 |
|---|---|
| Wisconsin Alumni<br>Research Foundation |
Agreement No. 19-00399
APPENDIX F
Patent Costs per Licensed Patent case
| Country | Patent Reimbursement Fee |
|---|---|
| United States | [***] |
| PCT | [***] |
| EPO | [***] |
| Each EPO Country | [***] |
| Each non-EPO Country | [***] |
| ColdQuanta-WARF Exclusive License (with right to sublicense) - 19-00399 | Page 20 of 20 |
| --- | --- |
| Wisconsin Alumni<br>Research Foundation |
EX-10.19
Exhibit 10.19
Certain identified information has been excluded from this exhibit both because it (i) is not material and (ii) is the type that the issuertreats as private or confidential. Brackets with triple asterisks denote omissions.
| Agreement No. 19-00399A |
|---|
AMENDMENT TO EXCLUSIVE LICENSE AGREEMENT
This Amendment to Exclusive License Agreement (“Amendment”) is made effective the 29th day of April, 2020, is by and between the Wisconsin Alumni Research Foundation (“WARF”), a nonstock, nonprofit Wisconsin corporation, and ColdQuanta, Inc. (“Licensee”), a corporation organized and existing under the laws of Wisconsin.
WITNESSETH
WHEREAS, WARF and Licensee previously entered into an Exclusive License Agreement (the “Agreement”), Agreement No. 19-00399, made effective October 1, 2019;
WHEREAS, the Licensee wishes to add the patent rights described in P200138US01, OPTICAL CONTROL OF QUBITS WITH SPATIAL LIGHT MODULATORS FOR QUANTUM COMPUTING AND QUANTUM SIMULATION to the Licensed Patents for a one-time fee;
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth below and in the Agreement, the parties covenant and agree as follows:
Appendix B is hereby replaced in its entirety with the attached Appendix B, which includes P200138US01 in the Licensed Patents.
A one-time fee of [***] will be invoiced and is due within 30 days of executing this Amendment.
Capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Agreement. Except as otherwise provided in this Amendment, all terms and conditions previously set forth in the Agreement shall remain in effect as set forth therein. In the event that this Amendment and the Agreement are inconsistent, the terms and provisions of this Amendment shall supersede the terms and provisions of the Agreement, but only to the extent necessary to satisfy the purpose of this Amendment. Each party hereto represents to the other that it has the full authority to execute, deliver and perform this Amendment in accordance with its terms. The persons signing on behalf of WARF and Licensee hereby warrant and represent that they have authority to execute this Amendment on behalf of the party for whom they have signed.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment on the dates indicated below.
| WISCONSIN ALUMNI RESEARCH FOUNDATION | |||
|---|---|---|---|
| By: | /s/ Michael Falk | Date: | 5/4/2020 |
| Michael Falk, Chief Intellectual Pproperty & Licensing Officer | |||
| COLDQUANTA, INC. | |||
| --- | --- | --- | --- |
| By: | /s/ Paul Schroeter | Date: | 5/4/2020 |
| Paul Schroeter, Chief Operating Officer | |||
| 19-00399A- ColdQuanta, Inc. | Page 1 of 2 | ||
| --- | --- | ||
| Wisconsin Alumni<br>Research Foundation | |||
| Agreement No. 19-00399A | |||
| --- |
APPENDIX B
LICENSED PATENTS
| REFERENCE<br><br><br>NUMBER | COUNTRY | APPLICATION<br><br><br>SERIAL NUMBER | FILING<br><br><br>DATE | PATENT<br> <br>NUMBER |
|---|
SYSTEM AND METHOD FOR OPTICAL CONFINEMENT OF ATOMIC PARTICLES
Mark Saffman, Martin Lichtman
| P140422US01 | UNITED STATES | 14/474702 | 9/2/14 | 9355750 |
|---|
SYSTEM AND METHOD FOR CONTROLLING PARTICLES USING PROJECTED LIGHT
Mark Saffman
| P190053US01 | UNITED STATES | 16/239997 | 1/4/19 | 10559392 |
|---|---|---|---|---|
| P190053WO01 | W.I.P.O. (IS PCT) | PCT/US2020/012228 | 1/3/20 |
OPTICAL CONTROL OF QUBITS WITH SPATIAL LIGHT MODULATORS FOR QUANTUM COMPUTING AND QUANTUM SIMULATION
Mark Saffman, Trent Graham, Robert Williamson
| P200138US01 | UNITED STATES | 16/859743 | 4/27/20 |
|---|---|---|---|
| 19-00399A- ColdQuanta, Inc. | Page 2 of 2 | ||
| --- | --- | ||
| Wisconsin Alumni<br>Research Foundation |
EX-10.20
Exhibit 10.20
Certain identified information has been excluded from this exhibit both because it (i) is not material and (ii) is the type that the issuertreats as private or confidential. Brackets with triple asterisks denote omissions.
| Agreement No. 19-00399B |
|---|
SECOND AMENDMENT TO EXCLUSIVE LICENSE AGREEMENT
This Amendment to Exclusive License Agreement (“Amendment”) is made effective the 22nd day of September, 2023, is by and between the Wisconsin Alumni Research Foundation (“WARF”), a nonstock, nonprofit Wisconsin corporation, and ColdQuanta, Inc. dba Infleqtion (“Licensee”), a corporation organized and existing under the laws of Delaware.
WITNESSETH
WHEREAS, WARF and Licensee previously entered into an Exclusive License Agreement, Agreement No. 19-00399, made effective October 1, 2019; and as amended on May 4, 2020, Agreement No. 19-00399A (together, the “Agreement”);
WHEREAS, the Licensee wishes to add the patent rights described in WARF Ref: P230077US01, MULTI-SCALE ARCHITECTURE FOR OPTICAL ADDRESSING AND CONTROL OF QUBIT ARRAYS to the Licensed Patents; and
WHEREAS, WARF and the Licensee wish to amend certain dates in the Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth below and in the Agreement, the parties covenant and agree as follows:
Appendix B is hereby replaced in its entirety with the attached Appendix B, which includes P230077US01 in the Licensed Patents.
As consideration for this Amendment, a one-time license fee of [***] will be invoiced and is due to WARF within 30 days of executing this Amendment.
The first sentence of Section 4D is hereby replaced with the following:
Licensee further agrees to pay to WARF a minimum royalty of [***] per calendar year or part thereof during which this Agreement is in effect, the first of which will be due for calendar year 2026, against which any royalty earned for the same calendar year will be credited. The minimum royalty for a given year will be due at the time payments are due for the previous calendar half ending on December 31. For clarity, the first minimum royalty payment for 2026 will be due January 30, 2026.
- Section 7C, including sub-Sections 7C(i) &(ii), is hereby deleted in its entirety and replaced with the following:
“C. WARF may terminate this Agreement or amend this Agreement to convert the license grant under Section 2A to be non-exclusive, at WARF’s option, upon ninety (90) days’ written notice to Licensee specifying whether WARF intends to terminate or amend the license grant (“Triggering Event Notice”) if any one or more of the following occurs (each, a “Triggering Event”): [***]
| 19-00399B- ColdQuanta, Inc. dba Infleqtion | Page 1 of 3 |
|---|---|
| Wisconsin Alumni<br>Research Foundation | |
| Agreement No. 19-00399B | |
| --- |
- Capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Agreement. Except as otherwise provided in this Amendment, all terms and conditions previously set forth in the Agreement shall remain in effect as set forth therein. In the event that this Amendment and the Agreement are inconsistent, the terms and provisions of this Amendment shall supersede the terms and provisions of the Agreement, but only to the extent necessary to satisfy the purpose of this Amendment. Each party hereto represents to the other that it has the full authority to execute, deliver and perform this Amendment in accordance with its terms. The persons signing on behalf of WARF and Licensee hereby warrant and represent that they have authority to execute this Amendment on behalf of the party for whom they have signed.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment on the dates indicated below.
| WISCONSIN ALUMNI RESEARCH FOUNDATION | |||
|---|---|---|---|
| By: | /s/ Michael Falk | Date: | 9/28/2023 |
| Michael Falk, Chief IP & Licensing Officer | |||
| INFLEQTION | |||
| By: | /s/ Troy Smith | Date: | September 27, 2023 |
| Name and Title: | Troy Smith, Corporate Counsel, Intellectual Property | ||
| --- | --- | ||
| 19-00399B- ColdQuanta, Inc. dba Infleqtion | Page 2 of 3 | ||
| --- | --- | ||
| Wisconsin Alumni<br>Research Foundation | |||
| Agreement No. 19-00399B | |||
| --- |
APPENDIX B
LICENSED PATENTS
| REFERENCE<br><br><br>NUMBER | COUNTRY | APPLICATION<br><br><br>SERIAL NUMBER | FILING<br> <br>DATE | PATENT<br> <br>NUMBER |
|---|
SYSTEM AND METHOD FOR OPTICAL CONFINEMENT OF ATOMIC PARTICLES
Mark Saffman, Martin Lichtman
| P140422US01 | UNITED STATES | 14/474702 | 9/2/14 | 9355750 |
|---|
SYSTEM AND METHOD FOR CONTROLLING PARTICLES USING PROJECTED LIGHT
Mark Saffman
| P190053US01 | UNITED STATES | 16/239997 | 1/4/19 | 10559392 |
|---|---|---|---|---|
| P190053US02 | UNITED STATES | 17/420542 | 1/3/20 | |
| P190053WO01 | W.I.P.O. (IS PCT) | PCT/US2020/012228 | 1/3/20 | |
| P190053AU01 | Australia | 2020204705 | 1/3/20 | |
| P190053CN01 | China | 202080007894.0 | 1/3/20 | |
| P190053JP01 | Japan | 2021538947 | 1/3/20 | |
| P190053KR01 | Republic of Korea | 1020217024440 | 1/3/20 | |
| P190053EP01 | EPO | 2020736184 | 1/3/20 | |
| P190053CA01 | Canada | 3123899 | 1/3/20 |
OPTICAL CONTROL OF QUBITS WITH SPATIAL LIGHT MODULATORS FOR QUANTUM COMPUTING AND QUANTUM SIMULATION
Mark Saffman, Trent Graham, Robert Williamson
| P200138US01 | UNITED STATES | 16/859743 | 4/27/20 | 11575860 |
|---|---|---|---|---|
| P200138WO01 | W.I.P.O. (IS PCT) | PCT/US2021/029349 | 4/27/21 | |
| P200138EP01 | EPO | 2021796510 | 4/27/21 |
MULTI-SCALE ARCHITECTURE FOR OPTICAL ADDRESSING AND CONTROL OF QUBIT ARRAYS
Mark Saffman, Trent Graham
| P230077US01 | UNITED STATES | 63/427347 | 11/22/22 |
|---|---|---|---|
| 19-00399B- ColdQuanta, Inc. dba Infleqtion | Page 3 of 3 | ||
| --- | --- | ||
| Wisconsin Alumni<br>Research Foundation |
EX-99.1
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Defined terms included below have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K.
Introduction
As previously disclosed, on September 8, 2025, Churchill entered into the Merger Agreement with Merger Sub I, Merger Sub II and Legacy Infleqtion. The Business Combination closed on February 13, 2026.
Churchill is a blank check company formed in order to effect a merger, amalgamation, share exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. Churchill was incorporated under the laws of the Cayman Islands on January 4, 2024.
On May 15, 2025, Churchill consummated its initial public offering of 41,400,000 Churchill public units, including 5,400,000 Churchill public units pursuant to the underwriters’ full exercise of the over-allotment option. The Churchill public units were sold at an offering price of $10.00 per unit, generating gross proceeds to Churchill of $414,000,000. Simultaneously with the consummation of the Churchill IPO and the exercise of the underwriters’ over-allotment option, Churchill consummated the private placement of 300,000 Churchill private placement units to the Sponsor at a price of $10.00 per unit, generating total proceeds of $3,000,000. Transaction costs amounted to $4,638,840, consisting of $3,000,000 of deferred underwriting fees, and $1,638,840 of other offering costs.
Legacy Infleqtion was formed as a Colorado corporation on February 7, 2007, and subsequently converted to a Delaware corporation on June 29, 2018. It develops and commercializes quantum technology as part of an integrated platform, which currently includes offerings such as quantum sensing, quantum computing and software, with technologies actively deployed across a number of sectors today, including defence and security, AI, energy optimization, space and frontier, materials discovery and cybersecurity.
Upon the closing of the Business Combination, Churchill has been renamed as “Infleqtion, Inc.”. Infleqtion, Inc. (referred to herein as the “Post-Closing Company”) is providing the following unaudited pro forma condensed combined financial information to aid in the analysis of the financial aspects of the Business Combination and other events contemplated by the Merger Agreement. The following unaudited pro forma condensed combined financial information presents the combination of the financial information of Churchill and Legacy Infleqtion, adjusted to give effect to the Business Combination and other events contemplated by the Merger Agreement. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.
The unaudited pro forma condensed combined financial statements give effect to the Business Combination and other events contemplated by the Merger Agreement as described in this Current Report on Form 8-K. The unaudited pro forma condensed combined balance sheet as of September 30, 2025 combines the historical unaudited condensed balance sheet of Legacy Infleqtion with the historical unaudited condensed balance sheet of Churchill on a pro forma basis as if the Business Combination and the other events contemplated by the Merger Agreement, summarized below, had been consummated on September 30, 2025. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2025 combines the historical unaudited condensed statement of operations of Legacy Infleqtion for the nine months ended September 30, 2025 and the historical unaudited condensed statement of operations of Churchill for the nine months ended September 30, 2025. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024, combines the historical audited statement of operations of Legacy Infleqtion for the year ended December 31, 2024, with the historical audited statement of operations of Churchill for the period from January 4, 2024 (inception) through December 31, 2024. Although Churchill was incorporated as a Cayman Islands exempted company on January 4, 2024, for purposes of unaudited pro forma condensed combined statements of operation for the nine months ended September 30, 2025 and the year ended December 31, 2024, the Business Combination and other events contemplated by the Merger Agreement have been given effect as if they had been consummated as of January 1, 2024.
1
The unaudited pro forma condensed combined financial statements have been prepared for informational purposes only and are not necessarily indicative of what the Post-Closing Company’s condensed financial position or results of operations actually would have been had the Business Combination been consummated on the dates indicated above, nor are they necessarily indicative of future results of operations. In addition, the unaudited pro forma condensed combined financial statements do not purport to project the future financial position or operating results of the Post-Closing Company.
The unaudited pro forma condensed combined financial information was derived from and should be read in conjunction with the following historical financial statements and the accompanying notes, which are incorporated by reference in this Current Report on Form 8-K:
| • | audited historical financial statements of Churchill for the period from January 4, 2024 (inception) through<br>December 31, 2024; |
|---|---|
| • | unaudited historical condensed financial statements of Churchill as of and for the nine months ended<br>September 30, 2025; |
| --- | --- |
| • | audited historical financial statements of Legacy Infleqtion for the year ended December 31, 2024;<br> |
| --- | --- |
| • | unaudited historical condensed financial statements of Legacy Infleqtion as of and for the nine months ended<br>September 30, 2025; and |
| --- | --- |
| • | other information relating to Churchill and Legacy Infleqtion, including the Merger Agreement and the description<br>of certain terms thereof and the financial and operational condition of Churchill and Legacy Infleqtion. |
| --- | --- |
Description of the BusinessCombination
Pursuant to the Merger Agreement and the related agreements, and upon the terms and subject to the conditions set forth therein, Churchill acquired Legacy Infleqtion and Legacy Infleqtion became a publicly traded company through the Business Combination. The Business Combination consisted of (a) the transfer of the registration of Churchill by way of continuation from the Cayman Islands to the State of Delaware (the “Domestication”), and (b) following the Domestication, the merger of Merger Sub I with and into Legacy Infleqtion, with Legacy Infleqtion continuing as the surviving corporation, and immediately thereafter, the merger of such surviving corporation with and into Merger Sub II, with Merger Sub II continuing as the surviving entity and as a wholly-owned subsidiary of Churchill. Subject to the terms and conditions of the Merger Agreement, the value of the aggregate consideration paid to the Legacy Infleqtion stockholders, holders of outstanding Legacy Infleqtion restricted stock awards and holders of Legacy Infleqtion options was based on a fair market value of $1,800,000,000. At the Effective Time, each share of Legacy Infleqtion common stock issued and outstanding immediately prior to the Effective Time (other than Excluded Shares and Dissenting Shares) was automatically cancelled and converted into the right to receive a number of shares of Common Stock equal to the Exchange Ratio (as defined in the Merger Agreement). The Exchange Ratio is based on the per share Equity Value (calculated in accordance with the Merger Agreement). Subject to the assumptions described herein, as of the date of this Current Report on Form 8-K, shares of Common Stock were issued for each issued and outstanding share of Legacy Infleqtion common stock (after giving effect to the conversion of Legacy Infleqtion preferred stock, including Legacy Infleqtion restricted stock awards into Legacy Infleqtion common stock).
Following the Business Combination and related events and based on the Exchange Ratio of approximately 0.347 the following are outstanding (excluding issuance of shares related to the PIPE Subscription Agreements):
| • | 151,804,988 shares of Common Stock issued to Legacy Infleqtion’s stockholders, including 880,446<br>shares issued in respect of restricted stock awards; |
|---|---|
| • | Infleqtion, Inc. options related to the assumption of Legacy Infleqtion stock options, which will be exercisable<br>for 30,179,087 shares of Common Stock; |
| --- | --- |
| • | 300,000 shares of Common Stock issued in exchange for Churchill private placement shares held by the Sponsor<br>subject to certain provisions under the Sponsor Agreement; |
| --- | --- |
2
| • | 10,350,000 shares of Common Stock in exchange for Churchill Founder Shares held by the Sponsor subject to certain<br>provisions under the Sponsor Agreement; |
|---|---|
| • | 41,362,179 shares of Common Stock held by Churchill public shareholders. |
| --- | --- |
The Business Combination occurred based on the following transactions as contemplated by the Merger Agreement:
| • | the Domestication and related automatic conversion of each Churchill Class A Ordinary Share issued and<br>outstanding immediately prior to the Domestication into one share of Churchill common stock; |
|---|---|
| • | the Merger of Merger Sub I, with and into Legacy Infleqtion, with Legacy Infleqtion as the surviving company, and<br>immediately thereafter, the merger of such surviving corporation with and into Merger Sub II, with Merger Sub II continuing as the surviving entity and as a wholly owned subsidiary of Churchill; |
| --- | --- |
| • | each share of Legacy Infleqtion common stock, including shares of Legacy Infleqtion common stock issued upon the pre-Closing conversion of Legacy Infleqtion preferred stock, was automatically surrendered and ceased to exist, and exchanged for the right to receive, in the aggregate, the Merger Consideration (as defined in the<br>Merger Agreement); and |
| --- | --- |
| • | the assumption of each outstanding and unexercised Legacy Infleqtion option (whether or not vested) by<br>Infleqtion, Inc., which then became an option to purchase shares of Common Stock, on the same terms and conditions (including applicable vesting, exercise and expiration provisions) as applied to each such Legacy Infleqtion option immediately prior<br>to the Effective Time (each an “Exchanged Option”), except that (1) the number of shares of Common Stock subject to such Exchanged Option will equal (a) the number of shares of Legacy Infleqtion common stock that were subject<br>to such option immediately prior to the Effective Time multiplied by (b) the Exchange Ratio, rounded down to the nearest whole share, and (2) the per share exercise price will equal the quotient of (a) the exercise price per share of<br>Legacy Infleqtion common stock at which such option was exercisable immediately prior to the Effective Time, divided by (b) the Exchange Ratio, rounded up to the nearest whole cent. |
| --- | --- |
| • | each outstanding Legacy Infleqtion restricted stock award that is outstanding as of immediately prior to the<br>Effective Time converted into the right to receive a number of shares of Common Stock, based on the agreed upon Exchange Ratio. |
| --- | --- |
Other agreements that are entered in connection with the Business Combination are summarized below:
| • | Subscription Agreements — In connection with the execution of the Merger Agreement, Churchill entered<br>into the PIPE Subscription Agreements with PIPE Investors. Pursuant to the terms of the PIPE Subscription Agreements, Churchill issued and sold to the PIPE Investors and the PIPE Investors purchased, 12,654,760 shares of Churchill common stock at a<br>purchase price of $10.00 per share for aggregate proceeds of $126.5 million. |
|---|---|
| • | Sponsor Agreement — **** Pursuant to the terms of the Sponsor Agreement, 1,500,000 Churchill Founder<br>Shares held by the Sponsor became unvested as of the Closing and will revest on the date on the occurrence of the Triggering Event. If the Triggering Event is not achieved within five years of the Closing, such Churchill Founder Shares will be<br>forfeited in accordance with the terms of the Sponsor Agreement. In the event of a change of control of Churchill prior to the fifth anniversary of the Closing, the Churchill Founder Shares will vest immediately prior to the closing of such change<br>of control if the change of control also constitutes the Triggering Event; otherwise, they will be automatically forfeited immediately prior to the closing for no consideration. |
| --- | --- |
The following summarizes the shares of Common Stock issued and outstanding immediately following the Business Combination, excluding the dilutive effect of the potential issuance of any shares of Common Stock upon exercise of outstanding Legacy Infleqtion options assumed by Infleqtion, Inc. and the potential issuance of shares of Common Stock initially reserved for issuance under the Incentive Plan and the ESPP.
3
| Shares | % Ownership | ||||
|---|---|---|---|---|---|
| Legacy Infleqtion stockholders^(1)^ | 151,804,988 | 70.1 | % | ||
| Sponsor shares^(2)^ | 10,650,000 | 5.0 | % | ||
| Churchill public shareholders | 41,362,179 | 19.1 | % | ||
| PIPE Investors^(3)^ | 12,654,760 | 5.8 | % | ||
| Total | **** | 216,471,927 | **** | 100 | % |
| (1) | Consists of 150,924,542 shares of Common Stock issued in respect of shares of Legacy Infleqtion common stock<br>and Legacy Infleqtion preferred stock, and 880,446 shares of Common Stock issued in respect of Legacy Infleqtion restricted stock awards, which are considered to be legally outstanding as of Closing. | ||||
| --- | --- | ||||
| (2) | Includes 300,000 Churchill private placement shares held by the Sponsor and 10,350,000 Churchill Founder Shares<br>held by the Sponsor. The outstanding amount of Churchill Founder shares includes 1,500,000 shares that became unvested as of the Closing and will revest on the occurrence of the Triggering Event. At Closing, all of the Churchill Founder Shares held<br>by the Sponsor are outstanding and entitled to vote. | ||||
| --- | --- | ||||
| (3) | Pursuant to the terms of the PIPE Subscription Agreements, as described above, Churchill issued and sold to the<br>PIPE Investors, and the PIPE Investors purchased, 12,654,760 shares at a purchase price of $10.00 per share for an aggregate commitment of $126.5 million. | ||||
| --- | --- |
Accounting Treatment for the Transactions
The Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”), because Legacy Infleqtion has been determined to be the accounting acquirer. Under this method of accounting, Churchill, which was the legal acquirer, was treated as the accounting acquiree for financial reporting purposes and Legacy Infleqtion, which was the legal acquiree, is the accounting acquirer for financial reporting purposes. Accordingly, the consolidated assets, liabilities and results of operations of Legacy Infleqtion will become the historical financial statements of Infleqtion, Inc., and Churchill’s assets, liabilities and results of operations will be consolidated with Legacy Infleqtion’s beginning on the acquisition date. For accounting purposes, the financial statements of Infleqtion, Inc. will represent a continuation of the financial statements of Legacy Infleqtion with the Business Combination being treated as the equivalent of Legacy Infleqtion issuing stock for the net assets of Churchill, accompanied by a recapitalization. The net assets of Churchill will be stated at historical costs, which are expected to approximate fair value, and no goodwill or other intangible assets will be recorded. Operations prior to the Business Combination will be presented as those of Legacy Infleqtion in future reports of Infleqtion, Inc.
Legacy Infleqtion was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:
| • | Legacy Infleqtion stockholders comprise a relative majority of greater than 70.1% of the voting power of the<br>Post-Closing Company; |
|---|---|
| • | Legacy Infleqtion nominated a majority of the members of the board of directors of the Post-Closing Company;<br> |
| --- | --- |
| • | Legacy Infleqtion’s operations prior to the Business Combination comprise the only ongoing operations of<br>Post-Closing Company; |
| --- | --- |
| • | Legacy Infleqtion’s senior management comprise the senior management of Post-Closing Company;<br> |
| --- | --- |
| • | The ongoing operations of Legacy Infleqtion became the operations of the Post-Closing Company; and<br> |
| --- | --- |
| • | Legacy Infleqtion’s headquarters became the Post-Closing Company’s headquarters.<br> |
| --- | --- |
The following unaudited pro forma condensed combined balance sheet as of September 30, 2025, and the unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2025 and for the year ended December 31, 2024, are based on historical financial statements of Churchill and Legacy Infleqtion. The unaudited pro forma adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information.
4
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of September 30, 2025
(Dollars in Thousands)
| Legacy Infleqtion(Historical) - | Churchill(Historical) - | HistoricalCombined | Transaction AccountingAdjustments | Pro Forma Combined | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | 26,025 | 419,164 | B | 528,445 | ||||||
| (40,177 | ) | C | ||||||||
| 126,548 | H | |||||||||
| (3,000 | ) | I | ||||||||
| (115 | ) | K | ||||||||
| Available-for-sale<br>securities | 51,415 | — | 51,415 | |||||||
| Accounts receivable | 4,532 | — | 4,532 | |||||||
| Unbilled receivables | 3,789 | — | 3,789 | |||||||
| Inventories | 4,055 | — | 4,055 | |||||||
| Prepaid expenses and other current assets | 6,995 | (4,530 | ) | C | 2,393 | |||||
| (72 | ) | L | ||||||||
| Prepaid insurance | 321 | (321 | ) | L | — | |||||
| Total Current assets | 97,132 | 497,497 | 594,629 | |||||||
| Non-current assets | ||||||||||
| Property and equipment, net | 8,817 | — | 8,817 | |||||||
| Lease right-of-use<br>assets | 5,186 | — | 5,186 | |||||||
| Other assets | 649 | 649 | ||||||||
| Goodwill | 9,315 | — | 9,315 | |||||||
| Cash and marketable securities held in Trust Account | 419,552 | (388 | ) | A | — | |||||
| (419,164 | ) | B | ||||||||
| Prepaid insurance- long term | 188 | (188 | ) | L | — | |||||
| Total Non-current assets | 443,707 | (419,740 | ) | 23,967 | ||||||
| Total Assets | **** | 540,839 | **** | 77,757 | **** | **** | 618,596 | |||
| LIABILITIES | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable | 5,682 | (3,131 | ) | C | 2,551 |
All values are in US Dollars.
5
| Legacy Infleqtion(Historical) - | Churchill(Historical) - | HistoricalCombined | Transaction AccountingAdjustments | Pro Forma Combined | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Accrued liabilities | 8,556 | (1,197 | ) | C | 7,329 | |||||
| (30 | ) | K | ||||||||
| Contract liabilities | 3,067 | 3,067 | ||||||||
| Current portion of lease<br>right-of-use liabilities | 1,187 | — | 1,187 | |||||||
| Deferred consideration, current | 455 | — | 455 | |||||||
| Accrued offering costs | 85 | (85 | ) | K | — | |||||
| Subscription agreement liability | 36,545 | (36,545 | ) | J | — | |||||
| Total Current liabilities | 55,577 | (40,988 | ) | 14,589 | ||||||
| Non-Current liabilities | ||||||||||
| Lease right-of-use<br>liabilities, net of current portion | 4,310 | — | 4,310 | |||||||
| Deferred underwriting fee payable | 3,000 | (3,000 | ) | I | — | |||||
| Total Non-Current liabilities | 7,310 | (3,000 | ) | 4,310 | ||||||
| Total Liabilities | **** | 62,887 | **** | (43,988 | ) | **** | 18,899 | |||
| Commitments and Contingencies | — | |||||||||
| Total Commitments and Contingencies | — | |||||||||
| Redeemable equity | ||||||||||
| Series Seed convertible redeemable preferred stock | 6,526 | (6,526 | ) | E | — | |||||
| Series Seed II convertible redeemable preferred stock | 10,411 | (10,411 | ) | E | — | |||||
| Series A convertible redeemable preferred stock | 36,658 | (36,658 | ) | E | — | |||||
| Series B convertible redeemable preferred stock | 112,145 | (112,145 | ) | E | — | |||||
| Series B1 convertible redeemable preferred stock | 32,990 | (32,990 | ) | E | — | |||||
| Series C convertible redeemable preferred stock | 71,728 | (71,728 | ) | E | — | |||||
| Series C1 convertible redeemable preferred stock | 26,351 | (26,351 | ) | E | — | |||||
| Class A ordinary shares subject to possible redemption | 419,552 | (388 | ) | A | — | |||||
| (419,164 | ) | D | ||||||||
| Total Redeemable equity | **** | 716,361 | **** | (716,361 | ) | **** | — |
All values are in US Dollars.
6
| Legacy Infleqtion(Historical) - | Churchill(Historical) - | HistoricalCombined | Transaction AccountingAdjustments | Pro Forma Combined | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EQUITY | ||||||||||||||
| Stockholders’ equity | ||||||||||||||
| Churchill Class A Ordinary Shares | — | — | — | |||||||||||
| Churchill Class B Ordinary Shares | 1 | (1 | ) | F | — | |||||||||
| Common Stock | — | 4 | D | 21 | ||||||||||
| 15 | E | |||||||||||||
| 1 | F | |||||||||||||
| 1 | H | |||||||||||||
| Legacy Infleqtion Common stock | 5 | 296,809 | E | — | ||||||||||
| (296,814 | ) | E | ||||||||||||
| Additional paid-in capital | 19,237 | (39,263 | ) | C | 820,463 | |||||||||
| 419,160 | D | — | ||||||||||||
| 296,799 | E | — | ||||||||||||
| (37,981 | ) | G | ||||||||||||
| 126,547 | H | |||||||||||||
| 36,545 | J | |||||||||||||
| (581 | ) | L | ||||||||||||
| Accumulated deficit | ) | ) | (258,307 | ) | (1,116 | ) | C | (221,442 | ) | |||||
| 37,981 | G | |||||||||||||
| Accumulated other comprehensive income (loss) | 655 | — | 655 | |||||||||||
| Total Stockholders’ equity | ) | ) | (238,409 | ) | 838,106 | 599,697 | ||||||||
| Total Equity | ) | ) | **** | (238,409 | ) | **** | 838,106 | **** | 599,697 | **** | ||||
| Total Liability, Redeemable Equity and Equity | **** | **** | **** | 540,839 | **** | **** | 77,757 | **** | 618,596 | **** |
All values are in US Dollars.
See accompanying notes to unaudited pro forma condensed combined financial information
7
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the nine months ended September 30, 2025
(Dollars in Thousands)
| Legacy Infleqtion(Historical) - | Churchill(Historical) - | HistoricalCombined | TransactionAccountingAdjustments | Pro Forma Combined | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Product revenue | 15,987 | — | 15,987 | |||||||||||
| Service revenue | 5,687 | — | 5,687 | |||||||||||
| Revenue | **** | **** | **** | 21,674 | **** | **** | — | **** | **** | 21,674 | **** | |||
| Cost of products | 10,651 | — | 10,651 | |||||||||||
| Cost of services | 2,939 | — | 2,939 | |||||||||||
| Gross profit | **** | **** | **** | 8,084 | **** | **** | — | **** | **** | 8,084 | **** | |||
| Research and development | 15,324 | — | 15,324 | |||||||||||
| Selling and marketing | 1,163 | — | 1,163 | |||||||||||
| General and administrative | 18,298 | 750 | AA | 18,913 | ||||||||||
| (135 | ) | CC | — | |||||||||||
| Subscription agreement expense | 6,045 | (6,045 | ) | DD | — | |||||||||
| Impairment of assets | — | — | — | |||||||||||
| Grant Income | ) | (1,531 | ) | — | (1,531 | ) | ||||||||
| Loss from operations | ) | ) | **** | (31,215 | ) | **** | 5,430 | **** | **** | (25,785 | ) | |||
| Interest income, net | 1,855 | — | 1,855 | |||||||||||
| Change in fair value of contingent consideration | — | — | — | |||||||||||
| Income earned on cash and marketable securities held in Trust Account | 6,552 | (6,552 | ) | BB | — | |||||||||
| Change of fair value of subscription agreement liability | ) | (30,499 | ) | 30,499 | DD | — | ||||||||
| Change in fair value of SAFE liabilities | — | — | — | |||||||||||
| Other, net | 842 | — | 842 | |||||||||||
| Loss before income taxes | ) | ) | **** | (52,465 | ) | **** | 29,377 | **** | **** | (23,088 | ) | |||
| Income tax expense (benefit) | — | — | — | |||||||||||
| Net loss | ) | ) | **** | (52,465 | ) | **** | 29,377 | **** | **** | (23,088 | ) | |||
| Shares used in computing net loss per share attributable to Infleqtion, Inc. shareholders—<br>basic and diluted | 214,091,481 | |||||||||||||
| Net loss per share attributable to Infleqtion, Inc. shareholders — basic and<br>diluted | (0.11 | ) |
All values are in US Dollars.
8
| Legacy Infleqtion(Historical) - | Churchill(Historical)- | HistoricalCombined | TransactionAccountingAdjustments | Pro Forma Combined | |||
|---|---|---|---|---|---|---|---|
| Historical | |||||||
| Weighted average shares outstanding of Legacy Infleqtion common stock—basic and<br>diluted | |||||||
| Basic and diluted net loss per share—Legacy Infleqtion common stock **** | ) | ||||||
| Shares used in computing net loss per share attributable to Churchill Class A Ordinary<br>shareholders— basic and diluted | |||||||
| Basic and diluted loss per share — Churchill Class A Ordinary Shares | ) |
All values are in US Dollars.
See accompanying notes to unaudited pro forma condensed combined financial information
9
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the year ended December 31, 2024
(Dollars in Thousands)
| Legacy Infleqtion(Historical) - | Churchill(Historical)— | HistoricalCombined | TransactionAccountingAdjustments | Pro Forma Combined | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Product revenue | 22,325 | — | 22,325 | |||||||||||
| Service revenue | 6,511 | — | 6,511 | |||||||||||
| Revenue | **** | **** | **** | 28,836 | **** | **** | — | **** | **** | 28,836 | **** | |||
| Cost of products | 17,571 | — | 17,571 | |||||||||||
| Cost of services | 2,201 | — | 2,201 | |||||||||||
| Gross profit | **** | **** | **** | 9,064 | **** | **** | — | **** | **** | 9,064 | **** | |||
| Research and development | 22,303 | — | 22,303 | |||||||||||
| Selling and marketing | 3,412 | — | 3,412 | |||||||||||
| General and administrative | 23,927 | 1,116 | AAA | 27,131 | ||||||||||
| 1,000 | BBB | |||||||||||||
| 1,088 | CCC | |||||||||||||
| Subscription agreement expense | — | — | — | |||||||||||
| Impairment of assets | 13,539 | — | 13,539 | |||||||||||
| Grant Income | ) | (1,057 | ) | — | (1,057 | ) | ||||||||
| Loss from operations | ) | ) | **** | (53,060 | ) | **** | (3,204 | ) | **** | (56,264 | ) | |||
| Interest income, net | 1,154 | — | 1,154 | |||||||||||
| Change in fair value of SAFE liabilities | ) | (2,271 | ) | — | (2,271 | ) | ||||||||
| Change in fair value of contingent consideration | 380 | 380 | ||||||||||||
| Other, net | ) | (21 | ) | — | (21 | ) | ||||||||
| Loss before income taxes | ) | ) | **** | (53,818 | ) | **** | (3,204 | ) | **** | (57,022 | ) | |||
| Income tax expense (benefit) | ) | (2 | ) | — | (2 | ) | ||||||||
| Net loss | ) | ) | **** | (53,816 | ) | **** | (3,204 | ) | **** | (57,020 | ) | |||
| Shares used in computing net loss per share attributable to Infleqtion, Inc. shareholders—<br>basic and diluted | 214,091,481 | |||||||||||||
| Net loss per share attributable to Infleqtion, Inc. shareholders — basic and<br>diluted | (0.27 | ) | ||||||||||||
| Historical | ||||||||||||||
| Weighted average shares outstanding of Legacy Infleqtion common stock—basic and<br>diluted | ||||||||||||||
| Basic and diluted net loss per share—Legacy Infleqtion common stock | ) |
All values are in US Dollars.
10
| Legacy Infleqtion(Historical) -USD | Churchill(Historical)— | HistoricalCombined | TransactionAccountingAdjustments | Pro Forma Combined | ||
|---|---|---|---|---|---|---|
| Shares used in computing net loss per share attributable to Churchill Class A Ordinary<br>shareholders— basic and diluted | ||||||
| Basic and diluted loss per share — Churchill Class A Ordinary Shares | ) |
All values are in US Dollars.
See accompanying notes to unaudited pro forma condensed combined financial information
11
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1. Basis of Pro Forma Presentation
The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Churchill, who is the legal acquirer, is treated as the accounting acquiree for financial reporting purposes and Legacy Infleqtion, which is the legal acquiree, was treated as the accounting acquirer for financial reporting purposes.
The unaudited pro forma condensed combined financial statements are prepared in accordance with Article 11 of SEC Regulation S-X, as amended January 1, 2021. The historical financial information of Churchill and Legacy Infleqtion is presented in accordance with GAAP. Management has made significant estimates and assumptions in its determination of the pro forma adjustments. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented. The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the Business Combination.
The pro forma adjustments reflecting the completion of the Business Combination and related transactions are based on currently available information and assumptions and methodologies that Infleqtion, Inc. believes are reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. Infleqtion, Inc. believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination and related transactions based on information available to management at the current time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.
The unaudited pro forma combined financial information does not reflect the income tax effects of the transaction accounting adjustments as any change in the deferred tax balance would be offset by an increase in the valuation allowance given incurred losses during the historical period presented.
The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination and related transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of Infleqtion, Inc. They should be read in conjunction with the historical financial statements and notes thereto of Churchill and Legacy Infleqtion.
Note 2. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
Transaction Accounting Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2025
| (A) | Reflects the redemption of 37,821 shares of Churchill Class A common stock at a redemption price of $10.27<br>per share, resulting in a redemption payment of $0.4 million from the trust account to redeem Churchill public stockholders. Churchill does not expect that redemptions in connection with the Business Combination will cause Infleqtion, Inc. to<br>be subject to U.S. federal excise taxes. |
|---|---|
| (B) | Reflects the reclassification of cash held in trust account of $419.2 million to cash and cash equivalents<br>that becomes available for general use by Infleqtion, Inc. following the Closing. On the Closing date, the actual balance of cash in the trust account, including accumulated interest earned during the period prior to transfer, was<br>$424.8 million. |
| --- | --- |
12
| (C) | Reflects transaction costs of $42.4 million for financial advisory, legal, accounting, and other fees<br>related to the Business Combination, excluding deferred underwriting fees of $3.0 million included in Note 2(I) below. Transaction costs are categorized as follows: | |
|---|---|---|
| Dollar in thousands | ||
| --- | --- | --- |
| Legacy Infleqtion Transaction costs: | ||
| (A) Costs related to issuance of equity | ||
| Amount incurred and paid prior to September 30, 2025^(2)^ | 1,021 | |
| Amount incurred and to be paid ^(1) (2) (3)^ | 3,509 | |
| Amounts to be incurred ^(1)^ | 3,974 | |
| Subtotal^(4)^ | 8,504 | |
| (B) Costs to be expensed | ||
| Amount incurred and paid prior to September 30, 2025 | 327 | |
| Amount incurred and to be paid ^(1) (3)^ | 781 | |
| Amounts to be incurred ^(1)(5)^ | 1,116 | |
| Subtotal | 2,224 | |
| Churchill Transaction costs: | ||
| Amount incurred and paid prior to September 30, 2025^(6)^ | 895 | |
| Amount incurred and to be paid ^(1)(3)(6)^ | 38 | |
| Amounts to be incurred ^(1)(4)^ | 30,760 | |
| Subtotal | 31,693 | |
| Total Transaction costs | **** | 42,421 |
| (1) | Adjustments to Cash and cash equivalents totaled $40.2 million | |
| --- | --- | |
| (2) | Adjustments to Prepaid expenses and other current assets totaled $4.5 million | |
| --- | --- | |
| (3) | Of the total incurred but not yet paid costs of $4.3 million, $3.1 million was recorded in Accounts<br>payable and $1.2 million was recorded in Accrued liabilities | |
| --- | --- | |
| (4) | Adjustments to Additional<br>paid-in-capital totaled $39.3 million | |
| --- | --- | |
| (5) | Adjustments to Accumulated deficit totaled $1.1 million | |
| --- | --- | |
| (6) | Amounts previously expensed by Churchill are reclassified to Additional<br>paid-in capital in Adjustment (G) | |
| --- | --- | |
| (D) | Reflects the reclassification of Churchill Class A Ordinary Shares subject to possible redemption to<br>permanent equity at Closing. | |
| --- | --- | |
| (E) | Reflects the conversion of Legacy Infleqtion preferred stock into shares of Legacy Infleqtion common stock, and<br>subsequently, of Legacy Infleqtion common stock into shares of Common Stock at Closing. | |
| --- | --- | |
| (F) | Reflects the conversion of Churchill Class B Ordinary Shares, on a one-for-one basis, into Churchill Class A Ordinary Shares, and subsequently, of the Churchill Class A Ordinary Shares to shares of Infleqtion, Inc. | |
| --- | --- | |
| (G) | Reflects the elimination of Churchill’s historical accumulated deficit of $38.0 million.<br> | |
| --- | --- |
13
| (H) | Reflects the gross proceeds received from the PIPE pursuant to PIPE Subscription Agreements of<br>$126.5 million from the issuance and sale of 12,654,760 shares of the Churchill Class A Ordinary Shares at $10.00 per share. |
|---|---|
| (I) | Reflects the settlement of the deferred underwriting fee of $3.0 million paid in full at the Closing.<br> |
| --- | --- |
| (J) | Reflects the removal of the $36.5 million liability recorded by Churchill in relation to Churchill’s<br>Subscription Agreements pursuant to which Churchill issued and sold shares to the PIPE investors at the Closing. The Subscription Agreements are terminated in conjunction with the Closing. |
| --- | --- |
| (K) | Reflects the settlement of Churchill’s outstanding liabilities that were paid at the Closing.<br> |
| --- | --- |
| (L) | Reflects the write off of Churchill’s prepaid expense balances as these amounts are not expected to<br>benefit Infleqtion, Inc. |
| --- | --- |
Transaction Accounting Adjustments to the Unaudited Pro Forma Condensed Combined Statementof Operations for the nine-month period ended September 30, 2025.
| (AA) | Reflects fees of $0.3 million per quarter to be paid to an affiliate of M. Klein & Company<br>pursuant to the Advisory Agreement, which will be in effect for a period of two years (unless extended for an additional year term upon mutual agreement of the parties to the Advisory Agreement), in exchange for advisory services provided to<br>Infleqtion, Inc. |
|---|---|
| (BB) | Represents the elimination of investment income related to the investments held in the Churchill trust account.<br> |
| --- | --- |
| (CC) | Reflects the elimination of historical expenses related to Churchill’s office space, utilities,<br>secretarial and administrative services. Upon completion of the Business Combination or Churchill’s liquidation, the obligation to continue paying these monthly fees under the agreement between Churchill and M. Klein Associates, Inc will be<br>terminated and Churchill will cease paying these monthly fees. |
| --- | --- |
| (DD) | Reflects the elimination of the expense and change in fair value of the liability associated with Subscription<br>Agreements. As indicated in Note 2 (J), the Subscription Agreements are terminated in conjunction with the Closing. |
| --- | --- |
TransactionAccounting Adjustments to the Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2024
| (AAA) | Reflects the total estimated remaining transaction costs of Legacy Infleqtion to be incurred and expensed as a<br>part of the Business Combination. Transaction costs are expensed as incurred and reflected as if incurred on January 1, 2024. This is a non-recurring item. |
|---|---|
| (BBB) | Reflects fees of $0.3 million per quarter to be paid to an affiliate of M. Klein & Company<br>pursuant to the Advisory Agreement, which will be in effect for a period of two years (unless extended for an additional year term upon mutual agreement of the parties to the Advisory Agreement), in exchange for advisory services provided to<br>Infleqtion, Inc. |
| --- | --- |
| (CCC) | Reflects a one-time stock-based compensation charge of<br>$1.1 million related to options granted to the Chief Executive Officer. The awards were granted at a grant date fair value of $0.15 per option. These options are expected to accelerate vest and become exercisable at the time of the Closing,<br>resulting in a non-recurring adjustment. |
| --- | --- |
14
Note 3. Loss per Share
Represents the net loss per share calculated using the historical weighted-average shares outstanding and the issuance of additional shares in connection with the Business Combination and related transactions, assuming the shares were outstanding since January 1, 2024. In the case of shares presented as being held by Legacy Infleqtion stockholders, the tables below assumes that Legacy Infleqtion preferred stock outstanding as of September 30, 2025 had converted to Legacy Infleqtion Common Stock and that each such share of Legacy Infleqtion Common Stock was exchanged for a number of shares equal to the assumed Exchange Ratio as of January 1, 2024. In the case of stock options presented in the table below showing potentially dilutive instruments, the table assumes that such stock options were exchanged applying the assumed Exchange Ratio as of January 1, 2024.
Net loss per share was computed using the two-class method required for participating securities. The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Infleqtion, Inc. considers its vesting Churchill Founder Shares to be participating securities as these instruments have non-forfeitable dividend rights. Net losses are not allocated to these participating securities as there are no contractual obligations that require participation in the Company’s losses.
As the Business Combination is being reflected as if it had occurred at the beginning of the earliest period presented, the calculation of weighted-average shares outstanding for basic and diluted net loss per share assumes that the shares issued relating to the Business Combination and related transactions have been outstanding for the entire periods presented. Basic and diluted earnings per share are the same for each class of common stock because they are entitled to the same liquidation and dividend rights.
For thenine months ended September 30, 2025:
| (dollar in thousands except shares and per share data) | |||
|---|---|---|---|
| Pro forma net loss | $ | (23,088 | ) |
| Shares used in computing net loss per share attributable to Infleqtion, Inc. shareholders —<br>basic and diluted | 214,091,481 | ||
| Pro forma net loss per share, basic and diluted | $ | (0.11 | ) |
| Pro forma weighted-average shares calculation, basic and diluted: | |||
| Legacy Infleqtion stockholders | 150,924,542 | ||
| Sponsor shares | 9,150,000 | ||
| Churchill public shareholders | 41,362,179 | ||
| PIPE Investors | 12,654,760 | ||
| **** | 214,091,481 | **** |
For the year ended December 31, 2024:
| (dollar in thousands except shares and per share data) | |||
|---|---|---|---|
| Pro forma net loss | $ | (57,020 | ) |
| Shares used in computing net loss per share attributable to Infleqtion, Inc. shareholders —<br>basic and diluted | 214,091,481 | ||
| Pro forma net loss per share, basic and diluted | $ | (0.27 | ) |
| Pro forma weighted-average shares calculation, basic and diluted: | |||
| Legacy Infleqtion stockholders | 150,924,542 | ||
| Sponsor shares | 9,150,000 | ||
| Churchill public shareholders | 41,362,179 | ||
| PIPE Investors | 12,654,760 | ||
| **** | 214,091,481 | **** |
15
The following outstanding shares of Common Stock equivalents were excluded from the computation of pro forma diluted net loss per share because including them would have had an anti-dilutive effect for the nine months ended September 30, 2025 and for the year ended December 31, 2024:
| Stock options and restricted shares<br>^(1)^ | 31,059,533 |
|---|---|
| Public and Private Warrants | 10,425,000 |
| 41,484,533 | |
| ^1.^ | The restricted stock awards, while legally outstanding, are not considered participating securities as any<br>rights to dividends during the vesting period are forfeitable. |
| --- | --- |
16
EX-99.2
Exhibit 99.2
Infleqtion and Churchill Capital Corp X Complete Business Combination
Infleqtion to become the first publicly listed neutral-atom quantum technology company and will
begin trading on the NYSE under ticker symbol “INFQ” on February 17, 2026
NEW YORK – February 13, 2026 – Infleqtion, Inc. (“Infleqtion”), a global leader in quantum sensing and quantum computing powered by neutral-atom technology, today announced the completion of its previously announced business combination with Churchill Capital Corp X (Nasdaq: CCCX) (“Churchill X”), a special purpose acquisition company.
Churchill X, whose shares of common stock, warrants and units were listed on The Nasdaq Stock Market LLC (“Nasdaq”) has delisted from Nasdaq, and shares of common stock and warrants of the post-combination company, Infleqtion, Inc., are expected to begin trading on the New York Stock Exchange (“NYSE”) beginning on February 17, 2026, under the ticker symbols “INFQ” and “INFQ WS”, respectively. Each of the units sold by Churchill X in its initial public offering have been separated and will no longer be listed on Nasdaq following the closing of the business combination.
Infleqtion translates quantum technology into solutions that expand human potential. Infleqtion designs, builds, and sells quantum computers, precision sensors, and software to governments, enterprises, and research institutions. As a first mover in neutral-atom technology, a leading quantum modality recognized for scalability, flexibility, and cost efficiency, Infleqtion has developed a practical, differentiated commercial platform designed to scale. This approach enables Infleqtion to support both quantum computing and precision sensing from a single product architecture. The company’s portfolio includes quantum computers, quantum clocks, RF receivers, and inertial sensors, engineered for real-world deployment and optimized by Infleqtion’s proprietary software. These systems are used in collaboration with NVIDIA and by customers including the U.S. Department of War, NASA, and the U.K. government.
Infleqtion will become the first publicly listed neutral-atom quantum technology company and the only public company with commercial leadership across both quantum computing and precision sensing.
About Infleqtion
Infleqtion, Inc. is a global leader in quantum sensing and quantum computing, powered by neutral-atom technology. We design and build quantum computers, precision sensors, and quantum software for governments, enterprises, and research institutions. Our commercial portfolio includes quantum computers as well as quantum Radio Frequency (QRF) systems, quantum clocks, and inertial navigation solutions. Infleqtion is the partner of choice for governments and commercial customers seeking cutting-edge quantum capabilities. Infleqtion announced in September 2025 it plans to go public via a merger with Churchill Capital Corp X (NASDAQ: CCCX). For more information, visit Infleqtion.com or follow Infleqtion on LinkedIn, YouTube, and X.
Forward-Looking Statements
This communication includes “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict” or similar expressions that predict or indicate future events or trends or that are not statements of historical
matters. Infleqtion has based these forward-looking statements on current expectations and projections about future events. These statements include: projections of market opportunity and market share; estimates of customer adoption rates and usage patterns; projections regarding Infleqtion’s ability to commercialize new products and technologies; projections of development and commercialization costs and timelines; expectations regarding Infleqtion’s ability to execute its business model and the expected financial benefits of such model; expectations regarding Infleqtion’s ability to attract, retain and expand its customer base; Infleqtion’s deployment of proceeds from capital raising transactions; Infleqtion’s expectations concerning relationships with strategic partners, suppliers, governments, state-funded entities, regulatory bodies and other third parties; Infleqtion’s ability to maintain, protect and enhance its intellectual property; future ventures or investments in companies, products, services or technologies; development of favorable regulations affecting Infleqtion’s markets; the potential benefits of the proposed transaction and expectations related to its terms and timing; and the potential for Infleqtion to increase in value.
These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions, many of which are beyond the control of Infleqtion.
These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause Infleqtion’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such statements. Such risks and uncertainties include: the effect of the announcement of Infleqtion’s public listing on Infleqtion’s business relationships, operating results, and business generally; that the public listing disrupts current plans and operations of Infleqtion; the outcome of any legal proceedings that may be instituted against Infleqtion; the ability to maintain the listing of Infleqtion’s securities on a national securities exchange; that Infleqtion is pursuing an emerging technology, faces significant technical challenges and may not achieve commercialization or market acceptance; Infleqtion’s historical net losses and limited operating history; Infleqtion’s expectations regarding future financial performance, capital requirements and unit economics; Infleqtion’s use and reporting of business and operational metrics; Infleqtion’s competitive landscape; Infleqtion’s dependence on members of its senior management and its ability to attract and retain qualified personnel; Infleqtion’s concentration of revenue in contracts with government or state-funded entities; the potential need for additional future financing; Infleqtion’s ability to manage growth and expand its operations; potential future acquisitions or investments in companies, products, services or technologies; Infleqtion’s reliance on strategic partners and other third parties; Infleqtion’s ability to maintain, protect and defend its intellectual property rights; risks associated with privacy, data protection or cybersecurity incidents and related regulations; the use, rate of adoption and regulation of artificial intelligence and machine learning; uncertainty or changes with respect to laws and regulations; uncertainty or changes with respect to taxes, trade conditions and the macroeconomic environment; Infleqtion’s ability to maintain internal control over financial reporting and operate a public company; the possibility that required regulatory approvals for the proposed transaction are delayed or are not obtained, which could adversely affect Infleqtion or the expected benefits of the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the business combination agreement; the outcome of any legal proceedings or government investigations that may be commenced against Infleqtion; failure to realize the anticipated benefits of the proposed transaction; the ability of Infleqtion to issue equity or equity-linked securities in
connection with the proposed transaction or in the future; and other factors described in Infleqtion’s filings with the SEC. Additional information concerning these and other factors that may impact such forward-looking statements can be found in filings and potential filings by Infleqtion with the SEC, including under the heading “Risk Factors.” If any of these risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. In addition, these statements reflect the expectations, plans and forecasts of Infleqtion’s management as of the date of this communication; subsequent events and developments may cause their assessments to change. While Infleqtion may elect to update these forward-looking statements at some point in the future, they specifically disclaim any obligation to do so. Accordingly, undue reliance should not be placed upon these statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this communication, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
Contacts
Media Contact
Tim Biba
Solebury Strategic Communications
tbiba@soleburystrat.com
Investor Contact
Marcus Kupferschmidt
Infleqtion
investors@infleqtion.com