Item 1.01 |
Entry Into a Material Agreement |
On
September 25, 2022, KINS Technology Group Inc., a Delaware corporation (“KINS”), entered into an Agreement and Plan
of Merger (the “Merger Agreement”), by and among KINS, Inpixon, a Nevada corporation (“Inpixon”),
CXApp Holding Corp., a Delaware corporation and wholly-owned subsidiary of Inpixon (“CXApp” and, together with Inpixon,
collectively, the “Companies”), and KINS Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of
KINS (“Merger Sub”), pursuant to which KINS will combine with CXApp, Inpixon’s enterprise apps business
(including its workplace experience technologies, indoor mapping, events platform, augmented reality and related business solutions)
(the “Enterprise Apps Business”). Also on September 25, 2022, and in connection with the execution of the Merger Agreement, KINS,
Inpixon, CXApp and KINS Capital LLC (the “Sponsor”) entered into that certain sponsor support agreement (the “Sponsor
Support Agreement”).
Immediately prior to the Merger (as defined below)
and pursuant to a Separation and Distribution Agreement, dated as of September 25, 2022, among KINS, Inpixon, CXApp and Design Reactor,
Inc., a California corporation (“Design Reactor”) (the “Separation Agreement”), and other ancillary conveyance
documents, Inpixon will, among other things and on the terms and subject to the conditions of the Separation Agreement, transfer the
Enterprise Apps Business, including certain related subsidiaries of Inpixon, including Design Reactor, to CXApp (the “Reorganization”)
and, in connection therewith, will distribute (the “Distribution”) to Inpixon stockholders and other security holders
100% of the common stock of CXApp, par value $0.00001 (the “CXApp Common Stock”), as further described below.
Immediately following the
Distribution, in accordance with and subject to the terms and conditions of the Merger Agreement, Merger Sub will merge with and into
CXApp (the “Merger”), with CXApp continuing as the surviving company in the Merger and as a wholly-owned subsidiary
of KINS.
Transaction Documents
Agreement and Plan of Merger
The Merger Agreement, along with the Separation
Agreement and the other transaction documents to be entered into in connection therewith, provides for, among other things, the consummation
of the following transactions (collectively, the “Business Combination”): (i) Inpixon will transfer the Enterprise
Apps Business (the “Separation”) to its wholly-owned subsidiary, CXApp, and contribute $10 million in capital thereto
(the “Cash Contribution”), (ii) following the Separation, Inpixon will distribute 100% of the shares of CXApp Common Stock
to Inpixon stockholders and other security holders by way of the distribution and (iii) following the completion of the foregoing transactions
and subject to the satisfaction or waiver of certain other conditions set forth in the Merger Agreement, the parties shall consummate
the Merger. The Separation, Distribution and Merger are intended to qualify as “tax-free” transactions.
Upon consummation of the Business
Combination, KINS will have two classes of common stock: Class A common stock, par value $0.0001 per share (the “KINS Class A
Common Stock”), and Class C common stock, par value $0.0001 per share (the “KINS Class C Common Stock” and
together with the KINS Class A Common Stock, the “KINS Common Stock”). The KINS Class A Common Stock and the KINS Class
C Common Stock will be identical in all respects, except that the KINS Class C Common Stock will be subject to transfer restrictions and
will automatically convert into KINS Class A Common Stock on the earlier to occur of (i) the 180th day following the closing
of the Merger and (ii) the day that the last reported sale price of the KINS Class A Common Stock equals or exceeds $12.00 per share for
any 20 trading days within any 30-trading day period following the closing of the Merger. The KINS Class A Common Stock will be listed
on the Nasdaq Capital Market (“Nasdaq”) and are expected to be trading under a new ticker symbol. The outstanding warrants
of KINS will be listed on Nasdaq and are expected to be trading under a new ticker symbol.
Consideration Paid
At the time the Business Combination is effected
(the “Closing”), the outstanding shares of CXApp Common Stock after the Distribution and immediately prior to the
effective time of the Merger will be converted into an aggregate of 6.9 million shares of KINS Common Stock which shall be issued to
Inpixon shareholders, subject to adjustment. Each holder’s aggregate merger consideration will consist of 10% KINS Class A Common
Stock and 90% KINS Class C Common Stock (such percentages, in each case, subject to adjustment to comply with the listing requirements
set forth under Nasdaq Listing Rule 5505(b)(2) with respect to KINS).
Representations and Warranties & Covenants
Pursuant to the Merger Agreement,
KINS, CXApp and Inpixon each made representations and warranties customary for transactions of this type regarding themselves and their
respective businesses. The representations and warranties made pursuant to the Merger Agreement will not survive the Closing. In addition,
the parties to the Merger Agreement agreed to be bound by certain covenants that are customary for transactions of this type. The covenants
made under the Merger Agreement generally will not survive the Closing, with the exception of certain covenants and agreements that by
their terms are to be performed in whole or in part after the Closing, which will survive in accordance with the terms of the Merger Agreement.
Conditions to Closing
The consummation of the Business Combination is
subject to conditions customary for transactions involving special purpose acquisition companies, including, among others: (i) there
is not in force any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with
any governmental authority of competent jurisdiction, statute, rule or regulation enjoining or prohibiting the consummation of the Merger,
(ii) KINS shall have at least $5,000,001 of net tangible assets as of the Closing, (iii) the KINS Class A Common Stock issuable
pursuant to the Business Combination shall have been approved for listing on Nasdaq, (iv) CXApp and KINS shall each have performed
and complied in all material respects with the covenants required by the Merger Agreement to be performed by it as of or prior to Closing,
(v) customary bring down conditions related to the accuracy of the CXApp’s and KINS’s respective representations and
warranties in the Merger Agreement, (vi) the consummation of the Distribution, the Reorganization and other transactions contemplated
by the Separation and Distribution Agreement, (vii) KINS’s registration statement to be filed with the Securities and Exchange
Commission (“SEC”) shall have become effective (and no stop order suspending effectiveness have been issued and no
proceedings for that purpose has been initiated or threatened by the SEC), (viii) each of KINS’s and CXApp’s stockholder
approvals shall have been obtained and (ix) the sum of (A) the aggregate amount of cash available in KINS’s trust account following
KINS’s stockholders’ meeting, after deducting the amount required to satisfy the Acquiror Share Redemption Amount (as defined
in the Merger Agreement) (but prior to payment of any transaction expenses), (B) the aggregate gross purchase price of any other purchase
of shares of KINS Common Stock (or securities convertible or exchangeable for KINS Common Stock) actually received by KINS prior to or
substantially concurrently with the closing of the Merger, and (C) the aggregate gross purchase price of any other purchase of shares
of CXApp Common Stock (or securities convertible or exchangeable for CXApp Common Stock) actually received by CXApp prior to or substantially
concurrently with the closing of the Merger, shall be equal to or greater than $9.5 million. KINS’s obligation to consummate the
Business Combination is also conditioned on there having been no event that has had, or would reasonably be expected to have, individually
or in the aggregate, a “Material Adverse Effect” on CXApp.
Termination
The Merger Agreement may be terminated under certain
customary and limited circumstances at any time prior to the Closing, including (i) by the mutual written consent of KINS and CXApp,
(ii) by KINS or CXApp, if the Closing shall not have occurred on or before March 16, 2023, (iii) by KINS or CXApp, if there has been
any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental
authority that would make the Merger illegal or otherwise prevent or prohibit the Merger, (iv) by KINS or CXApp, if KINS has not obtained
the requisite approval from its stockholders, (v) by KINS or CXApp if the other party breaches certain representations, warranties, or
covenants, as specified in the Merger Agreement, and that breach is unable to be cured, or is not cured, within 30 days, or by CXApp
if there has been an uncured breach by Sponsor of certain of its obligations under the Sponsor Support Agreement or (vi) by KINS if CXApp
has not obtained the requisite approval from its stockholders within one hour of the effective date of the KINS registration statement,
provided that CXApp or KINS pay a termination fee of $2.0 million to the other party if the Merger Agreement is terminated pursuant to
(v) or (vi) above.
A copy of the Merger Agreement
is filed with this Current Report on Form 8-K (this “Current Report”) as Exhibit 2.1, and is incorporated herein
by reference, and the foregoing description of the Merger Agreement is qualified in its entirety by reference thereto.
Separation and Distribution Agreement
On September 25, 2022, in connection with
the execution of the Merger Agreement, KINS entered into the Separation Agreement with CXApp, Inpixon and Design Reactor, pursuant to
which, among other things, (i) Inpixon will undertake a series of internal reorganization and restructuring transactions to effect
the transfer of its (direct or indirect) ownership of the Enterprise Apps Business to CXApp in the Separation and (ii) immediately
prior to the Merger and after the Separation, Inpixon will distribute 100% of the outstanding shares of CXApp Common Stock to Inpixon’s
stockholders and certain other security holders in the Distribution.
The Separation Agreement also
sets forth other agreements among Inpixon and CXApp related to the Separation, including provisions concerning the termination and settlement
of intercompany accounts and the obtaining of third-party consents. The Separation Agreement also sets forth agreements that will govern
certain aspects of the relationship between Inpixon and CXApp after the Distribution, including provisions with respect to release of
claims, indemnification, access to financial and other information and access to and provision of records.
Consummation of the Distribution is subject to
a number of conditions, including, among others, (i) the completion of the Reorganization and other related transactions, (ii) the
execution of the ancillary agreements by the parties and (iii) the satisfaction or waiver of all conditions under the Merger Agreement
(other than those conditions that are to be satisfied contemporaneously with the Distribution and/or the Merger, provided that such conditions
are capable of being satisfied at such time).
A copy of the Separation Agreement
is filed with this Current Report as Exhibit 2.2, and is incorporated herein by reference, and the foregoing description of the Separation
Agreement is qualified in its entirety by reference thereto.
Sponsor Support Agreement
On
September 25, 2022, in connection with the execution of the Merger Agreement, KINS, Inpixon, CXApp and the Sponsor entered into
the Sponsor Support Agreement, pursuant to which, among other things, the Sponsor agreed to vote any KINS securities held by it to approve
the Business Combination and the other KINS stockholder matters required pursuant to the Merger Agreement, and not to seek redemption
of any of its KINS securities in connection with the consummation of the Business Combination. Pursuant to the Sponsor Support Agreement,
the Sponsor and KINS also agreed to amend the letter agreement, dated as of December 14, 2020 between the Sponsor and KINS (the “Insider
Letter”) to amend the Founder Shares Lock-Up Period (as defined in the Insider Letter) to provide for lock-up of its shares
of KINS Class B common stock, par value $0.0001 per share (“KINS Class B Common
Stock”) (or KINS Class A Common Shares issuable upon conversion thereof) until the earlier of (A) the 180th day
after the closing of the Merger and (B) (x) the date on which KINS completes a liquidation, merger, stock exchange, reorganization or
other similar transaction following the closing of the Merger or (y) the day that the last reported sale price of the KINS Class A Common
Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like)
for any 20 trading days within any 30-trading day period following the Closing of the Merger; provided, that 10% of such shares (subject
to adjustment) shall not be subject to foregoing lock-up. Additionally, Sponsor has agreed to exchange 6,150,000 shares of KINS
Class B Common Stock, equal to such that the number of shares of KINS Common Stock issued as aggregate merger consideration exceeds (by
one share): (i) the aggregate number of shares of KINS Class A Common Stock held by Sponsor at Closing (after taking into the exchange),
plus (ii) the aggregate number of shares of KINS Class B Common Stock held by certain
funds and accounts managed by BlackRock, Inc. (including all Potential Forfeiture Shares (as defined in the Sponsor Support Agreement)),
plus (iii) the aggregate number of shares of KINS Class A Common Stock that have not
properly elected to redeem their shares of KINS Class A Common Stock pursuant to KINS’s governing documents, plus
(iii) any shares of KINS Common Stock issued as incentives for non-redemption transactions and financing transactions, in each
case, free and clear of all liens; provided, that, in no instance shall the number of shares issued to Sponsor in the exchange be less
than 5,150,000 shares of KINS Class A Common Stock.
A copy of the Sponsor Support
Agreement is filed with this Current Report as Exhibit 2.3, and is incorporated herein by reference, and the foregoing description
of the Sponsor Support Agreement is qualified in its entirety by reference thereto.
Certain Other Transaction Documents
Certain additional agreements
will be entered into in connection with the transactions contemplated by the Merger Agreement, the Separation Agreement and the other
agreements described above, including, among others:
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a Tax Matters Agreement by and among Inpixon, CXApp and KINS, which governs, among other things, Inpixon’s, CXApp’s and KINS’s respective rights, responsibilities and obligations with respect to taxes, tax attributes and the preparation and filing of tax returns and responsibility for and preservation of the expected tax-free status of the transactions contemplated by the Separation Agreement and the Merger Agreement; and certain other tax matters; |
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an Employee Matters Agreement by and among KINS, Inpixon, CXApp and
Merger Sub, which will provide for employee-related matters in connection with the transaction, including allocation of benefit plan assets
and liabilities between Inpixon and CXApp, treatment of incentive equity awards in the Distribution and the Business Combination and related
covenants and commitments of the parties; |
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a Contribution Agreement by and among Inpixon, CXApp and Design Reactor, pursuant
to which Inpixon will effect the transfer of its ownership of certain subsidiaries of Inpixon related to the Enterprise Apps Business,
including Design Reactor, to CXApp in exchange for a specified number of shares of common stock in CXApp; and |
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a Transition Services Agreement by and between Inpixon and CXApp, pursuant to which
each party will, on a transitional basis, provide the other party with certain support services and other assistance after the Closing. |
The Merger Agreement, the Separation Agreement
and the Sponsor Support Agreement have each been filed as exhibits to this Current Report, and the above descriptions have been included,
to provide investors and security holders with information regarding the terms of such agreements. They are not intended to provide any
other factual information about KINS, the Sponsor, Merger Sub, Inpixon, CXApp, any of their respective subsidiaries or affiliates, or
the Enterprise Apps Business. The Merger Agreement contains representations and warranties that Inpixon and/or CXApp, on the one hand,
and KINS and/or Merger Sub, on the other hand, have made to each other as of specific dates and/or times. The assertions embodied in
those representations and warranties were made solely for purposes of the contract between the parties to the Merger Agreement and may
be subject to important qualifications and limitations agreed to by the parties in connection with negotiating the terms of the agreement.
Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may be subject to a
contractual standard of materiality different from those generally applicable to stockholders, or may have been used for the purpose
of allocating risk between the parties rather than establishing matters as facts. For the foregoing reasons, such representations and
warranties should not be relied upon as statements of factual information. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully
reflected in KINS’s public disclosures.