Exhibit 10.3

  

 

 

 

EMPLOYEE MATTERS AGREEMENT

 

BY AND BETWEEN

 

INPIXON

 

AND

 

SYSOREX, INC.

 

DATED AS OF AUGUST 31, 2018

  

 

 

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS 3       Section 1.01. Definitions 3 Section 1.02.
Interpretation 7       ARTICLE II GENERAL PRINCIPLES FOR ALLOCATION OF
LIABILITIES 7       Section 2.01. General Principles 7 Section 2.02. Service
Credit 8 Section 2.03. Adoption and Transfer and Assumption of Benefit Plans 9
Section 2.04. Individual Agreements 10        ARTICLE III ASSIGNMENT OF
EMPLOYEES 10       Section 3.01. Assignment and Transfer of Employees 10 Section
3.02. At-Will Status 11 Section 3.03. Severance 11 Section 3.04. Not a Change in
Control 11       ARTICLE IV EQUITY, INCENTIVE AND EXECUTIVE COMPENSATION 11    
  Section 4.01. Generally 11 Section 4.02. Equity Incentive Awards 12 Section
4.03. Employee Stock Purchase Plan 14 Section 4.04. Non-Equity Incentive Plans
Section 4.05. Director Compensation       ARTICLE V RETIREMENT PLANS 14      
Section 5.01. Establishment of Plan 14 Section 5.02. Rollover of Account
Balances 14 Section 5.03. Plan Fiduciaries 14       ARTICLE VI WELFARE BENEFIT
PLANS 15        Section 6.01. Welfare Plans 15 Section 6.02. COBRA and HIPAA 16
Section 6.03. Vacation, Holidays and Leaves of Absence 16 Section 6.04.
Severance and Unemployment Compensation 17 Section 6.05. Workers’ Compensation
17 Section 6.06. Insurance Contracts 17 Section 6.07. Third-Party Vendors 17    
  ARTICLE VII MISCELLANEOUS 17       Section 7.01. Information Sharing and
Access 17 Section 7.02. Preservation of Rights to Amend 19 Section 7.03.
Fiduciary Matters 19 Section 7.04. Further Assurances 19 Section 7.05.
Counterparts; Entire Agreement; Corporate Power 19 Section 7.06. Governing Law
20 Section 7.07. Assignability 20 Section 7.08. Third-Party Beneficiaries 21
Section 7.09. Notices 21 Section 7.10. Severability 22 Section 7.11. Force
Majeure 22 Section 7.12. Headings 22 Section 7.13. Survival of Covenants 22
Section 7.14. Waivers of Default 23 Section 7.15. Dispute Resolution 23 Section
7.16. Specific Performance 23 Section 7.17. Amendments 23 Section 7.18.
Interpretation 23 Section 7.19. Limitations of Liability 23 Section 7.20. Mutual
Drafting 23

 

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EMPLOYEE MATTERS AGREEMENT

 

This EMPLOYEE MATTERS AGREEMENT, dated as of August 31, 2018 (this “Agreement”),
is by and between Inpixon, a Nevada corporation (“Parent”), and Sysorex, Inc., a
Nevada corporation (“Sysorex”).

 

R E C I T A L S:

 

WHEREAS, the board of directors of Parent (the “Parent Board”) has determined
that it is in the best interests of Parent and its stockholders to create a new
publicly traded company that shall operate the Sysorex Business;

 

WHEREAS, in furtherance of the foregoing, the Parent Board has determined that
it is appropriate and desirable to separate the Sysorex Business from the Parent
Business (the “Separation”) and, following the Separation, to make a
distribution, on a pro rata basis, to holders of Parent Shares on the Record
Date of all of the outstanding Sysorex Shares owned by Parent (the
“Distribution”);

 

WHEREAS, in order to effectuate the Separation and Distribution, Parent and
Sysorex have entered into a Separation and Distribution Agreement, dated as of
August 7, 2018 (the “Separation and Distribution Agreement”);

 

WHEREAS, in addition to the matters addressed by the Separation and Distribution
Agreement, the Parties desire to enter into this Agreement to set forth the
terms and conditions of certain employment, compensation and benefit matters;
and

 

WHEREAS, the Parties acknowledge that this Agreement, the Separation and
Distribution Agreement and the Ancillary Agreements represent the integrated
agreement of Parent and Sysorex relating to the Separation and Distribution, are
being entered into together and would not have been entered into independently.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01. Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below. Any terms that are capitalized but not
otherwise defined herein shall have the respective meanings assigned to them in
the Separation and Distribution Agreement.

  

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“Agreement” shall have the meaning set forth in the Preamble to this Agreement
and shall include all Schedules hereto and all amendments, modifications, and
changes hereto entered into pursuant to Section 7.17.

 

“Benefit Plan” shall mean any contract, agreement, policy, practice, program,
plan, trust, commitment or arrangement providing for benefits, perquisites or
compensation of any nature from an employer to any Employee, or to any family
member, dependent, or beneficiary of any such Employee, including cash or
deferred arrangement plans, profit sharing plans, post-employment programs,
pension plans, thrift plans, supplemental pension plans, welfare plans, stock
option, stock purchase, stock appreciation rights, restricted stock, restricted
stock units, performance stock units, other equity-based compensation and
contracts, agreements, policies, practices, programs, plans, trusts, commitments
and arrangements providing for terms of employment, fringe benefits, severance
benefits, change in control protections or benefits, travel and accident, life,
accidental death and dismemberment, disability and accident insurance, tuition
reimbursement, adoption assistance, travel reimbursement, vacation, sick,
personal or bereavement days, leaves of absences and holidays; provided,
however, that the term “Benefit Plan” does not include any government-sponsored
benefits, such as workers’ compensation, unemployment or any similar plans,
programs or policies or Individual Agreements.

 

“COBRA” shall mean the U.S. Consolidated Omnibus Budget Reconciliation Act of
1985, as codified at Section 601 et seq. of ERISA and at Section 4980B of the
Code.

 

“Distribution” shall have the meaning set forth in the Recitals.

 

“Effective Time” shall have the meaning set forth in the Separation and
Distribution Agreement.

 

“Employee” shall mean any Parent Employee or Sysorex Employee.

 

“ERISA” shall mean the U.S. Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.

 

“Former Employee” shall mean any individual who is a former employee of the
Parent Group as of immediately prior to the Effective Time.

 

“HIPAA” shall mean the U.S. Health Insurance Portability and Accountability Act
of 1996, as amended, and the regulations promulgated thereunder.

 

“Individual Agreement” shall mean any individual (a) employment contract, (b)
retention, severance or change in control agreement, (c) expatriate (including
any international assignee) contract or agreement (including agreements and
obligations regarding repatriation, relocation, equalization of Taxes and living
standards in the host country), or (d) other agreement containing restrictive
covenants (including confidentiality, non-competition and non-solicitation
provisions) between a member of the Parent Group and a Sysorex Employee, as in
effect immediately prior to the Effective Time.

  

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“IRS” shall mean the U.S. Internal Revenue Service.

 

“Parent” shall have the meaning set forth in the Preamble.

 

“Parent 401(k) Plan” shall mean the 401(k) Plan to be established by Parent at
or after the Effective Time.

 

“Parent Benefit Plan” shall mean any Benefit Plan established, sponsored or
maintained by Parent at or after the Effective Time.

 

“Parent Compensation Committee” shall mean the Compensation Committee of the
Parent Board.

 

“Parent Employees” shall have the meaning set forth in Section 3.01.

 

“Parent Option Award” shall mean an award of options to purchase Parent Shares
granted pursuant to the Parent Stock Incentive Plan that is outstanding as of
immediately prior to the Effective Time.

 

“Parent Ratio” shall mean the quotient obtained by dividing (a) the
Pre-Separation Parent Stock Value by (b) the Post-Separation Parent Stock Value.

 

“Parent Stock Incentive Plan” shall mean the Amended and Restated 2011 Employee
Stock Incentive Plan.

 

“Parties” shall mean the parties to this Agreement.

 

“Post-Separation Parent Option Award” shall mean a Parent Option Award adjusted
as of the Effective Time in accordance with Section 4.02(a).

 

“Post-Separation Parent Stock Value” shall mean the simple average of the
closing per-share price of Parent Shares trading on the Nasdaq Capital Market
for each of the first 5 full Trading Sessions immediately after the Effective
Time.

 

“Pre-Separation Parent Stock Value” shall mean the closing per-share price of
Parent Shares trading “regular way with due bills” on the Nasdaq Capital Market
as of the last Trading Session prior to the Effective Time.

 

“Separation” shall have the meaning set forth in the Recitals.

  

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“Separation and Distribution Agreement” shall have the meaning set forth in the
Recitals to this Agreement.

 

“Sysorex” shall have the meaning set forth in the Preamble.

 

“Sysorex 401(k) Plan” shall mean the Sysorex USA 401(k) Plan, established by
Sysorex prior to the Effective Time.

 

“Sysorex Benefit Plan” shall mean any Benefit Plan established, sponsored,
maintained or contributed to by a member of the Sysorex Group as of or prior to
the Effective Time.

 

“Sysorex Board” shall mean the Board of Directors of Sysorex.

 

“Sysorex Employees” shall have the meaning set forth in Section 3.01.

 

“Sysorex Option Award” shall mean an award of options to purchase Sysorex Shares
assumed by Sysorex pursuant to the Sysorex Stock Incentive Plan in accordance
with Section 4.02(a).

 

“Sysorex Ratio” shall mean the quotient obtained by dividing (a) the
Pre-Separation Parent Stock Value by (b) the Sysorex Stock Value.

 

“Sysorex Stock Incentive Plan” shall mean the Sysorex 2018 Equity Incentive
Plan, as established by Sysorex as of the Effective Time pursuant to Section
4.01.

 

“Sysorex Stock Value” shall mean the simple average of the closing per-share
price of Sysorex Shares trading on the OTCQB for each of the first 5 full
Trading Sessions immediately after the Effective Time.

 

“Sysorex Welfare Plan” shall mean a Welfare Plan established, sponsored,
maintained or contributed to by any member of the Sysorex Group for the benefit
of Sysorex Employees.

 

“Tax” shall have the meaning set forth in the Tax Matters Agreement.

 

“Trading Session” shall mean the period of time during any given calendar day,
commencing with the determination of the opening price on the Nasdaq Capital
Market, as to the Parent Shares, or the OTCQB, as to the Sysorex Shares, and
ending with the determination of the closing price on the Nasdaq Capital Market
or the OTCQB, as applicable, in which trading in the Parent Shares or the
Sysorex Shares, as applicable, is permitted.

 

“Transferred Director” shall mean each Sysorex non-employee director as of the
Effective Time who served as a non-employee director on the Parent Board
immediately prior to the Effective Time.

  

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“Welfare Plan” shall mean any “welfare plan” (as defined in Section 3(1) of
ERISA) or a “cafeteria plan” under Section 125 of the Code, and any benefits
offered thereunder, and any other plan offering health benefits (including
medical, prescription drug, dental, vision, mental health, substance abuse and
retiree health), disability benefits, or life, accidental death and
dismemberment, and business travel insurance, pre-Tax premium conversion
benefits, dependent care assistance programs, employee assistance programs, paid
time-off programs, contribution funding toward a health savings account,
flexible spending accounts, supplemental unemployment benefits or severance.

 

Section 1.02. Interpretation. Section 10.15 of the Separation and Distribution
Agreement is hereby incorporated by reference.

 

ARTICLE II

 

GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES

 

Section 2.01. General Principles.

 

(a) Acceptance and Assumption of Sysorex Liabilities. Except as otherwise
provided by this Agreement, on or prior to the Effective Time, but in any case
prior to the Distribution, Sysorex and the applicable Sysorex Designees shall
accept, assume and agree faithfully to perform, discharge and fulfill all of the
following Liabilities in accordance with their respective terms (each of which
shall be considered a Sysorex Liability), regardless of when or where such
Liabilities arose or arise, or whether the facts on which they are based
occurred prior to or subsequent to the Effective Time, regardless of where or
against whom such Liabilities are asserted or determined (including any
Liabilities arising out of claims made by Parent’s or Sysorex’s respective
directors, officers, Employees, Former Employees, agents, Subsidiaries or
Affiliates against any member of the Parent Group or the Sysorex Group) or
whether asserted or determined prior to the date hereof, and regardless of
whether arising from or alleged to arise from negligence, recklessness,
violation of Law, fraud or misrepresentation by any member of the Parent Group
or the Sysorex Group, or any of their respective directors, officers, Employees,
Former Employees, agents, Subsidiaries or Affiliates:

 

(i) any and all wages, salaries, incentive compensation, equity compensation,
commissions, bonuses and any other employee compensation or benefits payable to
or on behalf of any Sysorex Employees after the Effective Time, without regard
to when such wages, salaries, incentive compensation, equity compensation,
commissions, bonuses or other employee compensation or benefits are or may have
been awarded or earned;

 

(ii) any and all Liabilities whatsoever with respect to claims under a Sysorex
Benefit Plan, taking into account the Sysorex Benefit Plan’s assumption of
Liabilities with respect to Sysorex Employees that were originally the
Liabilities of the corresponding Parent Benefit Plan with respect to periods
prior to the Effective Time; and

 

(iii) any and all Liabilities expressly assumed or retained by any member of the
Sysorex Group pursuant to this Agreement.

  

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(b) Acceptance and Assumption of Parent Liabilities. Except as otherwise
provided by this Agreement, on or prior to the Effective Time, but in any case
prior to the Distribution, Parent and certain members of the Parent Group
designated by Parent shall accept, assume and agree faithfully to perform,
discharge and fulfill all of the following Liabilities in accordance with their
respective terms (each of which shall be considered a Parent Liability),
regardless of when or where such Liabilities arose or arise, or whether the
facts on which they are based occurred prior to or subsequent to the Effective
Time, regardless of where or against whom such Liabilities are asserted or
determined (including any Liabilities arising out of claims made by Parent’s or
Sysorex’s respective directors, officers, Employees, Former Employees, agents,
Subsidiaries or Affiliates against any member of the Parent Group or the Sysorex
Group) or whether asserted or determined prior to the date hereof, and
regardless of whether arising from or alleged to arise from negligence,
recklessness, violation of Law, fraud or misrepresentation by any member of the
Parent Group or the Sysorex Group, or any of their respective directors,
officers, Employees, Former Employees, agents, Subsidiaries or Affiliates:

 

(i) any and all wages, salaries, incentive compensation, equity compensation,
commissions, bonuses and any other employee compensation or benefits payable to
or on behalf of any Parent Employees and Former Employees after the Effective
Time, without regard to when such wages, salaries, incentive compensation,
equity compensation, commissions, bonuses or other employee compensation or
benefits are or may have been awarded or earned;

 

(ii) any and all Liabilities whatsoever with respect to claims under a Parent
Benefit Plan, taking into account a corresponding Sysorex Benefit Plan’s
assumption of Liabilities with respect to Sysorex Employees that were originally
the Liabilities of such Parent Benefit Plan with respect to periods prior to the
Effective Time; and

 

(iii) any and all Liabilities expressly assumed or retained by any member of the
Parent Group pursuant to this Agreement.

 

(c) Unaddressed Liabilities. To the extent that this Agreement does not address
particular Liabilities under any Benefit Plan and the Parties later determine
that they should be allocated in connection with the Distribution, the Parties
shall agree in good faith on the allocation, taking into account the handling of
comparable Liabilities under this Agreement.

 

Section 2.02. Service Credit. As of the Effective Time, the Sysorex Benefit
Plans shall, and Sysorex shall cause each member of the Sysorex Group to,
recognize for each Sysorex Employee who is employed immediately following the
Effective Time by a member of the Sysorex Group, full service with Parent or any
of its Subsidiaries or predecessor entities at or before the Effective Time, to
the same extent that such service was recognized by Parent for similar purposes
prior to the Effective Time as if such full service had been performed for a
member of the Sysorex Group, for purposes of eligibility, vesting and
determination of level of benefits under any such Sysorex Benefit Plan. As of
the Effective Time, the Parent Benefit Plans shall, and Parent shall cause each
member of the Parent Group to, recognize for each Parent Employee who is
employed immediately following the Effective Time by a member of the Parent
Group, full service with Sysorex or any of its Subsidiaries or predecessor
entities at or before the Effective Time, to the same extent that such service
was recognized by Sysorex for similar purposes prior to the Effective Time as if
such full service had been performed for a member of the Parent Group, for
purposes of eligibility, vesting and determination of level of benefits under
any such Parent Benefit Plan.

  

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Section 2.03. Adoption and Transfer and Assumption of Benefit Plans.

 

(a) Adoption by Parent of Benefit Plans. As of no later than the Effective Time
or as soon thereafter as is practicable, Parent shall adopt Benefit Plans (and
related trusts, if applicable) as contemplated by, and in accordance with, the
terms of this Agreement.

 

(b) Plans Not Required to Be Adopted. With respect to any Benefit Plan not
listed or otherwise addressed in this Agreement, the Parties shall agree in good
faith on the treatment of such plan taking into account the handling of any
comparable plan under this Agreement and, notwithstanding that Parent shall not
have an obligation to continue to maintain any such plan with respect to the
provision of future benefits from and after the Effective Time, Parent shall
remain obligated to pay or provide any previously accrued or incurred benefits
to the Parent Employees consistent with Section 2.01(b) of this Agreement.

 

(c) Information and Operation. Each Party shall use its commercially reasonable
efforts to provide the other Party with information describing each Benefit Plan
election made by an Employee or Former Employee that may have application to
such Party’s Benefit Plans from and after the Effective Time, and each Party
shall use its commercially reasonable efforts to administer its Benefit Plans
using those elections. Each Party shall, upon reasonable request, use its
commercially reasonable efforts to provide the other Party and the other Party’s
respective Affiliates, agents, and vendors all information reasonably necessary
to the other Party’s operation or administration of its Benefit Plans.

 

(d) No Duplication or Acceleration of Benefits. Notwithstanding anything to the
contrary in this Agreement, the Separation and Distribution Agreement or any
Ancillary Agreement, no participant in any Benefit Plan shall receive service
credit or benefits to the extent that receipt of such service credit or benefits
would result in duplication of benefits provided to such participant by the
corresponding Benefit Plan or any other plan, program or arrangement sponsored
or maintained by a member of the Group that sponsors the corresponding Benefit
Plan. Furthermore, unless expressly provided for in this Agreement, the
Separation and Distribution Agreement or in any Ancillary Agreement or required
by applicable Law, no provision in this Agreement shall be construed to create
any right to accelerate vesting distributions or entitlements under any Benefit
Plan sponsored or maintained by a member of the Parent Group or member of the
Sysorex Group on the part of any Employee or Former Employee.

  

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(e) Transition Services. The Parties acknowledge that the Parent Group or the
Sysorex Group may provide administrative services for certain of the other
Party’s compensation and benefit programs for a transitional period. The Parties
agree to enter into a business associate agreement (if required by HIPAA or
other applicable health information privacy Laws) in connection with such
services.

 

(f) Beneficiaries. References to Parent Employees, Sysorex Employees, Former
Employees, and current and former non-employee directors of either Parent or
Sysorex, shall be deemed to refer to their beneficiaries, dependents, survivors
and alternate payees, as applicable.

 

Section 2.04. Individual Agreements.

 

(a) Assignment by Sysorex. To the extent necessary, Sysorex shall assign, or
cause an applicable member of the Sysorex Group to assign, to Parent or another
member of the Parent Group, as designated by Parent, all Individual Agreements,
with such assignment to be effective as of no later than the Effective Time;
provided, however, that to the extent that assignment of any such Individual
Agreement is not permitted by the terms of such agreement or by applicable Law,
effective as of the Effective Time, each member of the Parent Group shall be
considered to be a successor to each member of the Sysorex Group for purposes
of, and a third-party beneficiary with respect to, such Individual Agreement,
such that each member of the Parent Group shall enjoy all of the rights and
benefits under such agreement (including rights and benefits as a third-party
beneficiary), with respect to the business operations of the Parent Group;
provided, further, that in no event shall Sysorex be permitted to enforce any
Individual Agreement (including any agreement containing non-competition or
non-solicitation covenants) against a Parent Employee for action taken in such
individual’s capacity as a Parent Employee other than on behalf of Parent Group
as requested by Parent Group in its capacity as a third-party beneficiary.

 

(b) Assumption by Parent. Effective as of the Effective Time, Parent shall
assume and honor any individual agreement to which any Parent Employee is a
party with any member of the Sysorex Group, including any Individual Agreement
described in subsection (a) above.

 

ARTICLE III

 

ASSIGNMENT OF EMPLOYEES

 

Section 3.01. Assignment and Transfer of Employees. Effective as of the
Effective Time and except as otherwise agreed by the Parties, (a) the Parties
shall have taken such actions as are necessary to ensure that each individual
who is intended to be an employee of the Sysorex Group as of immediately after
the Effective Time (including any such individual who is not actively working as
of the Effective Time as a result of an illness, injury or leave of absence
approved by the Parent Human Resources department or otherwise taken in
accordance with applicable Law) (collectively, the “Sysorex Employees”) is
employed by a member of the Sysorex Group as of immediately after the Effective
Time, and (b) the Parties shall have taken such actions as are necessary to
ensure that each individual who is intended to be an employee of the Parent
Group as of immediately after the Effective Time (including any such individual
who is not actively working as of the Effective Time as a result of an illness,
injury or leave of absence approved by the Parent Human Resources department or
otherwise taken in accordance with applicable Law) and any other individual
employed by the Parent Group as of the Effective Time who is not a Sysorex
Employee (collectively, the “Parent Employees”) is employed by a member of the
Parent Group as of immediately after the Effective Time. Each of the Parties
agrees to execute, and to seek to have the applicable Employees execute, such
documentation, if any, as may be necessary to reflect such assignment and/or
transfer, including but not limited to the Employee Transition Agreement in
substantially the form attached here to as Exhibit 3.01 pursuant to which
individuals that are intended to be Parent Employees following the Effective
Time may effectively be transferred to work for the Parent Group for a
transitional period or other mutually satisfactory written agreement.

 

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Section 3.02. At-Will Status. Nothing in this Agreement shall create any
obligation on the part of any member of the Parent Group or any member of the
Sysorex Group to (a) continue the employment of any Employee or permit the
return from a leave of absence for any period after the date of this Agreement
(except as required by applicable Law) or (b) change the employment status of
any Employee from “at-will,” to the extent that such Employee is an “at-will”
employee under applicable Law.

 

Section 3.03. Severance. The Parties acknowledge and agree that, except as
required by applicable Law, the Separation, Distribution and the assignment,
transfer or continuation of the employment of Employees as contemplated by this
Section 3.03 shall not be deemed an involuntary termination of employment
entitling any Sysorex Employee or Parent Employee to severance payments or
benefits.

 

Section 3.04. Not a Change in Control. The Parties acknowledge and agree that
neither the consummation of the Separation, Distribution nor any transaction
contemplated by this Agreement, the Separation and Distribution Agreement or any
other Ancillary Agreement shall be deemed a “change in control,” “change of
control,” or term of similar import for purposes of any Benefit Plan sponsored
or maintained by any member of the Parent Group or member of the Sysorex Group.

 

ARTICLE IV

 

EQUITY, INCENTIVE AND EXECUTIVE COMPENSATION

 

Section 4.01. Generally. Each Parent Option Award that is outstanding as of
immediately prior to the Effective Time shall be adjusted as described below;
provided, however, effective immediately prior to the Effective Time, the Parent
Compensation Committee may provide for different adjustments with respect to
some or all Parent Option Awards to the extent that the Parent Compensation
Committee deems such adjustments necessary and appropriate. Any adjustments made
by the Parent Compensation Committee pursuant to the foregoing sentence shall be
deemed incorporated by reference herein as if fully set forth below and shall be
binding on the Parties and their respective Affiliates. Before the Effective
Time, the Sysorex Stock Incentive Plan shall be established, with such terms as
are necessary to permit the implementation of the provisions of Section 4.02.

  

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Section 4.02. Treatment of Option Awards.

 

(a) Option Awards. Each Parent Option Award that is outstanding as of
immediately prior to the Effective Time shall be treated as follows:

 

(i) Parent Employees, Former Employees and Directors. If the holder is a Parent
Employee, Former Employee or a non-employee director of Parent (other than a
Transferred Director), such award shall be converted, as of the Effective Time,
into a Post-Separation Parent Option Award and shall, except as otherwise
provided in this Section 4.02, be subject to the same terms and conditions
(including with respect to vesting and expiration) after the Effective Time as
were applicable to such Parent Option Award immediately prior to the Effective
Time; provided, however, that from and after the Effective Time:

 

(A) the number of Parent Shares subject to such Post-Separation Parent Option
Award shall be equal to the product, rounded down to the nearest whole share, of
(I) the number of Parent Shares subject to the corresponding Parent Option Award
immediately prior to the Effective Time, multiplied by (II) the Parent Ratio;
and

 

(B) the per share exercise price of such Post-Separation Parent Option Award
shall be equal to the quotient, rounded up to the nearest cent, of (I) the per
share exercise price of the corresponding Parent Option Award immediately prior
to the Effective Time, divided by (II) the Parent Ratio.

 

Notwithstanding anything to the contrary in this Section 4.02(a)(i), the
exercise price, the number of Parent Shares subject to each Post-Separation
Parent Option Award and the terms and conditions of exercise of such options
shall be determined in a manner consistent with the requirements of Section 409A
of the Code.

 

(ii) Sysorex Employees and Directors. If the holder is a Sysorex Employee or a
Transferred Director, such award shall be converted, as of the Effective Time,
into a Sysorex Option Award and shall, except as otherwise provided in this
Section 4.02, be subject to the same terms and conditions (including with
respect to vesting and expiration) after the Effective Time as were applicable
to such Parent Option Award immediately prior to the Effective Time; provided,
however, that from and after the Effective Time:

 

(A) the number of Parent Shares subject to such Sysorex Option Award shall be
equal to the product, rounded down to the nearest whole share, of (I) the number
of Parent Shares subject to the corresponding Parent Option Award immediately
prior to the Effective Time, multiplied by (II) the Sysorex Ratio; and

 

(B) the per share exercise price of such Sysorex Option Award shall be equal to
the quotient, rounded up to the nearest cent, of (I) the per share exercise
price of the corresponding Parent Option Award immediately prior to the
Effective Time, divided by (II) the Sysorex Ratio.

  

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Notwithstanding anything to the contrary in this Section 4.02(a)(ii), the
exercise price, the number of Sysorex Shares subject to each Sysorex Option
Award and the terms and conditions of exercise of such options shall be
determined in a manner consistent with the requirements of Section 409A of the
Code.

 

(b) Settlement; Tax Reporting and Withholding.

 

(i) Except as otherwise provided in this Section 4.02(b), after the Effective
Time, Post-Separation Parent Option Awards, regardless of by whom held, shall be
settled by Parent, and Sysorex Option Awards, regardless of by whom held, shall
be settled by Sysorex.

 

(ii) Upon the vesting, payment or settlement, as applicable, of Sysorex Option
Awards, Sysorex shall be solely responsible for ensuring the satisfaction of all
applicable Tax withholding requirements on behalf of each Sysorex Employee. Upon
the vesting, payment or settlement, as applicable, of Post-Separation Parent
Option Awards, Parent shall be solely responsible for ensuring the satisfaction
of all applicable Tax withholding requirements on behalf of each Parent Employee
or Former Employee. Following the Effective Time, Parent shall be responsible
for all income Tax reporting in respect of Post-Separation Parent Option Awards
held by Parent Employees, Former Employees and individuals who are or were
Parent non-employee directors, and Sysorex shall be responsible for all income
Tax reporting in respect of Sysorex Option Awards held by Sysorex Employees and
Transferred Directors.

 

(c) Cooperation. Each of the Parties shall establish an appropriate
administration system in order to administer, in an orderly manner, (i)
exercises of vested Post-Separation Parent Options and Sysorex Options, (ii) the
vesting and forfeiture of unvested Post-Separation Parent Option Awards and
Sysorex Option Awards, and (iii) the withholding and reporting requirements with
respect to all awards. Each of the Parties shall work together to unify and
consolidate all indicative data and payroll and employment information on
regular timetables and make certain that each applicable Person’s data and
records in respect of such awards are correct and updated on a timely basis. The
foregoing shall include employment status and information required for vesting
and forfeiture of awards and Tax withholding/remittance, compliance with trading
windows and compliance with the requirements of the Exchange Act and other
applicable Laws.

 

(d) Registration and Other Regulatory Requirements. Sysorex agrees to file Forms
S-1 or S-8 registration statements, as appropriate, with respect to, and to
cause to be registered pursuant to the Securities Act, the Sysorex Shares
authorized for issuance under the Sysorex Stock Incentive Plan, as required
pursuant to the Securities Act, not later than the Effective Time and in any
event before the date of issuance of any Sysorex Shares pursuant to the Sysorex
Stock Incentive Plan. The Parties shall take such additional actions as are
deemed necessary or advisable to effectuate the foregoing provisions of this
Section 4.02(d), including compliance with securities Laws and other legal
requirements associated with equity compensation awards in affected non-U.S.
jurisdictions. Parent agrees to facilitate the adoption and approval of the
Sysorex Stock Incentive Plan consistent with the requirements of Treasury
Regulations Section 1.162-27(f)(4)(iii).

  

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Section 4.03. Director Compensation. Parent shall be responsible for the payment
of any fees for service on the Parent Board that are earned at, before, or after
the Effective Time, and Sysorex shall not have any responsibility for any such
payments. With respect to any Sysorex non-employee director, Sysorex shall be
responsible for the payment of any fees for service on the Sysorex Board that
are earned at any time after the Effective Time and Parent shall not have any
responsibility for any such payments.

 

ARTICLE V

 

RETIREMENT PLANS

 

Section 5.01. Establishment of Plan. As soon as practicable after the
Distribution Date, the Parent Board shall adopt and establish the Parent 401(k)
Plan and a related trust, which shall be intended to meet the qualification
requirements of Section 401(a) of the Code (including under Sections 401(k) and
(m) of the Code) including the safe-harbor requirements of Section 401(k)(12) of
the Code. Parent may make such changes, modifications or amendments to the
Parent 401(k) Plan as may be required by applicable Law or as are necessary and
appropriate to reflect the Separation or which result from vendor limitations.
As soon as practicable after the Distribution Date, Parent shall provide Sysorex
with (a) a copy of the Parent 401(k) Plan and related trust and applicable IRS
volume submitter approval or other IRS favorable determination letter with
respect to the plan and (b) a copy of certified resolutions of the Parent Board
(or its authorized committee or other delegate) evidencing adoption of the
Parent 401(k) Plan and related trust and the obligations described in Section
5.02.

 

Section 5.02. Transfer of Account Balances. Parent Employees shall be eligible
to participate in the Parent 401(k) Plan as of the effective date of the plan to
the extent that they were eligible to participate in the Sysorex 401(k) Plan as
of immediately prior to the Effective Time. As soon as reasonably practicable
following the effective date of the Parent 401(k) Plan, Sysorex shall cause the
Sysorex 401(k) Plan to transfer to the Parent 401(k) Plan the account balances
of Parent Employees, whether vested or non-vested, in the form of cash (or, in
the case of loans, notes).

 

Section 5.03. Plan Fiduciaries. For all periods on and after the Effective Time,
the Parties agree that the applicable fiduciaries of each of the Parent 401(k)
Plan and the Sysorex 401(k) Plan, respectively, shall have the authority with
respect to the Parent 401(k) Plan and the Sysorex 401(k) Plan, respectively, to
determine the investment alternatives, the terms and conditions with respect to
those investment alternatives and such other matters as are within the scope of
their duties under ERISA and the terms of the applicable plan documents.

  

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ARTICLE VI

 

WELFARE BENEFIT PLANS

 

Section 6.01. Welfare Plans.

 

(a) Continued Participation in Sysorex Welfare Plans. For the period beginning
on the date of the Distribution and ending on December 31, 2018 (or such later
date as may be required under COBRA in the case of Parent Employees or former
Parent Employees (or such Parent Employee’s or former Parent Employee’s eligible
dependents) who have a “qualifying event” for the purposes of COBRA on or prior
to the date of Distribution) (the “Participation Period”), (i) Parent Employees
and former Parent Employees who participate in the Welfare Plans identified on
Schedule 6.01(a) (such plans, the “Participation Period Plans”), and (ii)
individuals who become employed by Parent who would become eligible to
participate in the Participation Period Plans had the Distribution not occurred,
shall continue to participate or begin to participate, as applicable in such
Participation Period Plans during the Participation Period on the terms set
forth in such Participation Period Plans. The Parties acknowledge and agree
that, as of December 31, 2018, the Parent Employees who remain Parent Employees
as of that date shall cease participation in the Sysorex Welfare Plans and,
effective January 1, 2019, , such employees shall commence participation in the
Parent Welfare Plans. To the extent the Participation Period applicable to a
Parent Employee (or such Parent Employee’s eligible dependents) who experiences
a “qualifying event” for the purposes of COBRA after the date of Distribution
would otherwise extend beyond December 31, 2018, such Parent Employee shall
become eligible for benefits solely pursuant to the Parent Welfare Plans, in
accordance with COBRA and consistent with the terms generally available to
active Parent Employees, as of January 1, 2019.

 

(b) Waiver of Conditions; Benefit Maximums. Parent has and shall continue to use
commercially reasonable efforts to cause the Parent Welfare Plans to:

 

(i) with respect to initial enrollment, waive (A) all exclusions, and service
conditions with respect to participation and coverage requirements applicable to
any Parent Employee, other than limitations that were in effect with respect to
the Parent Employee under the applicable Sysorex Welfare Plan as of immediately
prior to the Distribution Date, and (B) any waiting period limitation or
evidence of insurability requirement applicable to a Parent Employee other than
limitations or requirements that were in effect with respect to such Parent
Employee under the applicable Sysorex Welfare Plans as of immediately prior to
the Distribution Date; and

 

(ii) take into account (A) with respect to aggregate annual or similar maximum
benefits available under the Parent Welfare Plans, a Parent Employee’s prior
claim experience under the Sysorex Welfare Plans and any Benefit Plan that
provides leave benefits; and (B) any eligible expenses incurred by a Parent
Employee and his or her covered dependents during the portion of the plan year
of the applicable Sysorex Welfare Plan ending as of the Distribution Date to be
taken into account under such Parent Welfare Plan for purposes of satisfying all
deductible, coinsurance, and maximum out-of-pocket requirements applicable to
such Parent Employee and his or her covered dependents for the applicable plan
year to the same extent as such expenses were taken into account by Sysorex for
similar purposes prior to the Distribution Date as if such amounts had been paid
in accordance with such Parent Welfare Plan.

   

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(d) Allocation of Welfare Plan Assets and Liabilities.

 

(i) Except as otherwise provided in this Article VI, effective as of the
Effective Time, the Parent Group shall retain or assume, as applicable, and be
responsible for all Assets (including any insurance contracts, policies or other
funding vehicles) and Liabilities relating to the Parent Welfare Plans,
regardless of when arising, and the Sysorex Group shall retain or assume, as
applicable, and be responsible for all Assets (including any insurance
contracts, policies or other funding vehicles) and Liabilities relating to the
Sysorex Welfare Plans, regardless of when arising.

 

(ii) For these purposes, a claim or Liability is deemed to be incurred: (A) with
respect to medical, dental, vision and/or prescription drug benefits, upon the
rendering of health services giving rise to such claim or Liability; (B) with
respect to life insurance, accidental death and dismemberment and business
travel accident insurance, upon the occurrence of the event giving rise to such
claim or Liability; and (C) with respect to disability benefits, upon the date
of an Employee’s disability, as determined by the disability benefit insurance
carrier or claim administrator, giving rise to such claim or Liability.

 

Section 6.02. COBRA. The Sysorex Group shall be responsible for complying with,
and providing coverage pursuant to, the health care continuation requirements of
COBRA, and the corresponding provisions of the Sysorex Welfare Plans with
respect to any Sysorex Employees or Former Employees (and their covered
dependents) who incur a qualifying event under COBRA before, as of, or after the
Distribution Date. Effective January 1, 2019, the Parent Group shall assume
responsibility for complying with, and providing coverage pursuant to, the
health care continuation requirements of COBRA, and the corresponding provisions
of the Parent Welfare Plans with respect to any Parent Employees (and their
covered dependents) who incur a qualifying event or loss of coverage under the
Parent Welfare Plans after the Distribution Date. For purposes of this Section
6.02, any Former Employee who participated in the Sysorex Welfare Plans as of
the date of such Former Employee’s qualifying event under COBRA shall be
considered a Sysorex Employee. The Parties agree that the consummation of the
transactions contemplated by the Separation and Distribution Agreement shall not
constitute a COBRA qualifying event for any purpose of COBRA.

 

Section 6.03. Vacation, Holidays and Leaves of Absence. Effective as of no later
than the Effective Time, the Sysorex Group shall assume all Liabilities of the
Sysorex Group with respect to vacation, holiday, annual leave or other leave of
absence, and required payments related thereto, for each Sysorex Employee,
unless otherwise required by applicable Law. The Parent Group shall retain all
Liabilities with respect to vacation, holiday, annual leave or other leave of
absence, and required payments related thereto, for each Parent Employee.

  

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Section 6.04. Severance and Unemployment Compensation. As of the Effective Time,
the Sysorex Group shall assume and be responsible for any and all Liabilities
relating to Sysorex Employees regardless of when arising and Former Employees
who worked the majority of their time on Sysorex Group activities in respect of
severance, unemployment compensation and supplemental unemployment benefits. The
Parent Group shall retain or assume, as applicable, and be responsible for any
and all Liabilities relating to Parent Employees regardless of when arising and
Former Employees who worked the majority of their time on Parent Group
activities in respect of severance, unemployment compensation and supplemental
unemployment benefits.

 

Section 6.05. Workers’ Compensation. With respect to claims for workers’
compensation in the United States, (a) the Sysorex Group shall be responsible
for claims in respect of Sysorex Employees regardless of when arising and Former
Employees who worked the majority of their time on Sysorex Group activities ,
and (b) the Parent Group shall be responsible for all claims in respect of
Parent Employees regardless of when arising and Former Employees who worked the
majority of their time on Parent Group activities.

 

Section 6.06. Insurance Contracts. To the extent that any Welfare Plan is funded
through the purchase of an insurance contract or is subject to any stop loss
contract, the Parties shall cooperate and use their commercially reasonable
efforts to replicate such insurance contracts for Sysorex or Parent as
applicable (except to the extent that changes are required under applicable Law
or filings by the respective insurers) and to maintain any pricing discounts or
other preferential terms for both Parent and Sysorex for a reasonable term.
Neither Party shall be liable for failure to obtain such insurance contracts,
pricing discounts, or other preferential terms for the other Party. Each Party
shall be responsible for any additional premiums, charges, or administrative
fees that such Party may incur pursuant to this Section 6.06.

 

Section 6.07. Third-Party Vendors. Except as provided below, to the extent that
any Welfare Plan is administered by a third-party vendor, the Parties shall
cooperate and use their commercially reasonable efforts to replicate any
contract with such third-party vendor for Parent or Sysorex, as applicable and
to maintain any pricing discounts or other preferential terms for both Parent
and Sysorex for a reasonable term. Neither Party shall be liable for failure to
obtain such pricing discounts or other preferential terms for the other Party.
Each Party shall be responsible for any additional premiums, charges, or
administrative fees that such Party may incur pursuant to this Section 6.07.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01. Information Sharing and Access.

 

(a) Sharing of Information. Subject to any limitations imposed by applicable
Law, each of Parent and Sysorex (acting directly or through members of the
Parent Group or the Sysorex Group, respectively) shall provide to the other
Party and its authorized agents and vendors all information necessary (including
information for purposes of determining benefit eligibility, participation,
vesting, calculation of benefits) on a timely basis under the circumstances for
the Party to perform its duties under this Agreement. Such information shall
include information relating to equity awards under stock plans. To the extent
that such information is maintained by a third-party vendor, each Party shall
use its commercially reasonable efforts to require the third-party vendor to
provide the necessary information and assist in resolving discrepancies or
obtaining missing data.

  

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(b) Transfer of Personnel Records and Authorization. Subject to any limitation
imposed by applicable Law and to the extent that it has not done so before the
Effective Time, Sysorex shall transfer to Parent any and all employment records
(including any Form I-9, Form W-2 or other IRS forms) with respect to Parent
Employees and other records reasonably required by Parent to enable Parent
properly to carry out its obligations under this Agreement. Such transfer of
records generally shall occur as soon as administratively practicable at or
after the Effective Time. Each Party shall permit the other Party reasonable
access to its Employee records, to the extent reasonably necessary for such
accessing Party to carry out its obligations hereunder.

 

(c) Access to Records. To the extent not inconsistent with this Agreement, the
Separation and Distribution Agreement or any applicable privacy protection Laws
or regulations, reasonable access to Employee-related and benefit plan related
records after the Effective Time shall be provided to members of the Parent
Group and members of the Sysorex Group pursuant to the terms and conditions of
Article VI of the Separation and Distribution Agreement.

 

(d) Maintenance of Records. With respect to retaining, destroying, transferring,
sharing, copying and permitting access to all Employee-related information,
Parent and Sysorex shall comply with all applicable Laws, regulations and
internal policies, and shall indemnify and hold harmless each other from and
against any and all Liability, Actions, and damages that arise from a failure
(by the indemnifying Party or its Subsidiaries or their respective agents) to so
comply with all applicable Laws, regulations and internal policies applicable to
such information.

 

(e) Cooperation. Each Party shall use commercially reasonable efforts to
cooperate and work together to unify, consolidate and share (to the extent
permissible under applicable privacy/data protection Laws) all relevant
documents, resolutions, government filings, data, payroll, employment and
benefit plan information on regular timetables and cooperate as needed with
respect to (i) any claims under or audit of or litigation with respect to any
employee benefit plan, policy or arrangement contemplated by this Agreement,
(ii) efforts to seek a determination letter, private letter ruling or advisory
opinion from the IRS or U.S. Department of Labor on behalf of any employee
benefit plan, policy or arrangement contemplated by this Agreement, (iii) any
filings that are required to be made or supplemented to the IRS, U.S. Pension
Benefit Guaranty Corporation, U.S. Department of Labor or any other Governmental
Authority, and (iv) any audits by a Governmental Authority or corrective
actions, relating to any Benefit Plan, labor or payroll practices; provided,
however, that requests for cooperation must be reasonable and not interfere with
daily business operations.

  

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(f) Confidentiality. Notwithstanding anything in this Agreement to the contrary,
all confidential records and data relating to Employees to be shared or
transferred pursuant to this Agreement shall be subject to Section 6.9 of the
Separation and Distribution Agreement and the requirements of applicable Law.

 

Section 7.02. Preservation of Rights to Amend. Except as set forth in this
Agreement, the rights of each member of the Parent Group and each member of the
Sysorex Group to amend, waive, or terminate any plan, arrangement, agreement,
program, or policy referred to herein shall not be limited in any way by this
Agreement.

 

Section 7.03. Fiduciary Matters. Parent and Sysorex each acknowledge that
actions required to be taken pursuant to this Agreement may be subject to
fiduciary duties or standards of conduct under ERISA or other applicable Law,
and no Party shall be deemed to be in violation of this Agreement if it fails to
comply with any provisions hereof based upon its good-faith determination (as
supported by advice from counsel experienced in such matters) that to do so
would violate such a fiduciary duty or standard. Each Party shall be responsible
for taking such actions as are deemed necessary and appropriate to comply with
its own fiduciary responsibilities and shall fully release and indemnify the
other Party for any Liabilities caused by the failure to satisfy any such
responsibility.

 

Section 7.04. Further Assurances. Each Party hereto shall take, or cause to be
taken, any and all reasonable actions, including the execution, acknowledgment,
filing and delivery of any and all documents and instruments that any other
Party hereto may reasonably request in order to effect the intent and purpose of
this Agreement and the transactions contemplated hereby.

 

Section 7.05. Counterparts; Entire Agreement; Corporate Power.

 

(a) This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more counterparts have been signed by each of the Parties and delivered
to the other Party.

 

(b) This Agreement, the Separation and Distribution Agreement and the Ancillary
Agreements and the Exhibits, Schedules and appendices hereto and thereto contain
the entire agreement between the Parties with respect to the subject matter
hereof, supersede all previous agreements, negotiations, discussions, writings,
understandings, commitments and conversations with respect to such subject
matter, and there are no agreements or understandings between the Parties other
than those set forth or referred to herein or therein. This Agreement, the
Separation and Distribution Agreement and the Ancillary Agreements govern the
arrangements in connection with the Separation and Distribution and would not
have been entered independently.

 

(c) Parent represents on behalf of itself and each other member of the Parent
Group, and Sysorex represents on behalf of itself and each other member of the
Sysorex Group, as follows:

  

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(i) each such Person has the requisite corporate or other power and authority
and has taken all corporate or other action necessary in order to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby; and

 

(ii) this Agreement has been duly executed and delivered by it and constitutes a
valid and binding agreement of it enforceable in accordance with the terms
hereof.

 

(d) Each Party acknowledges that it and each other Party is executing this
Agreement by facsimile, stamp or mechanical signature, and that delivery of an
executed counterpart of a signature page to this Agreement (whether executed by
manual, stamp or mechanical signature) by facsimile or by email in portable
document format (PDF) shall be effective as delivery of such executed
counterpart of this Agreement. Each Party expressly adopts and confirms each
such facsimile, stamp or mechanical signature (regardless of whether delivered
in person, by mail, by courier, by facsimile or by email in portable document
format (PDF)) made in its respective name as if it were a manual signature
delivered in person, agrees that it will not assert that any such signature or
delivery is not adequate to bind such Party to the same extent as if it were
signed manually and delivered in person and agrees that, at the reasonable
request of the other Party at any time, it will as promptly as reasonably
practicable cause this Agreement to be manually executed (any such execution to
be as of the date of the initial date thereof) and delivered in person, by mail
or by courier.

 

Section 7.06. Governing Law. This Agreement (and any claims or disputes arising
out of or related hereto or to the transactions contemplated hereby or to the
inducement of any Party to enter herein, whether for breach of contract,
tortious conduct or otherwise and whether predicated on common Law, statute or
otherwise) shall be governed by and construed and interpreted in accordance with
the Laws of the State of California, irrespective of the choice of Laws
principles of the State of California, including all matters of validity,
construction, effect, enforceability, performance and remedies.

 

Section 7.07. Assignability. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and permitted
assigns; provided, however, that neither Party may assign its rights or delegate
its obligations under this Agreement without the express prior written consent
of the other Party hereto. Notwithstanding the foregoing, no such consent shall
be required for the assignment of a Party’s rights and obligations under this
Agreement, the Separation and Distribution Agreement and all other Ancillary
Agreements (except as may be otherwise provided in any such Ancillary Agreement)
in whole (i.e., the assignment of a party’s rights and obligations under this
Agreement and all Ancillary Agreements all at the same time) in connection with
a change of control of a Party so long as the resulting, surviving or transferee
Person assumes all the obligations of the relevant party thereto by operation of
Law or pursuant to an agreement in form and substance reasonably satisfactory to
the other Party.

  

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Section 7.08. Third-Party Beneficiaries. Subject to the requirements of Section
2.04(a), the provisions of this Agreement are solely for the benefit of the
Parties and are not intended to confer upon any other Person except the Parties
any rights or remedies hereunder. There are no third-party beneficiaries of this
Agreement and this Agreement shall not provide any third person with any remedy,
claim, Liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement. Nothing in this Agreement is
intended to amend any employee benefit plan or affect the applicable plan
sponsor’s right to amend or terminate any employee benefit plan pursuant to the
terms of such plan. The provisions of this Agreement are solely for the benefit
of the Parties, and no current or former Employee, officer, director, or
independent contractor or any other individual associated therewith shall be
regarded for any purpose as a third-party beneficiary of this Agreement.

 

Section 7.09. Notices. All notices, requests, claims, demands or other
communications under this Agreement shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by overnight courier service, to the respective Parties at
the following addresses (or at such other address for a Party as shall be
specified in a notice given in accordance with this Section 7.09):

 

If to Parent (prior to, on or after the Effective Time), to:

 

Inpixon

2479 E. Bayshore Road, Suite 195

Palo Alto, California 94303

Attn.: Chief Executive Officer

 

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

 

Melanie Figueroa, Esq.

Mitchell Silberberg & Knupp LLP

12 East 49th Street, 30th Floor

New York, New York 10017

 

If to Sysorex (prior to the Effective Time), to:

 

Sysorex, Inc.

2479 E. Bayshore Road, Suite 195

Palo Alto, California 94303

Attn.: Chief Executive Officer

 

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

 

Melanie Figueroa, Esq.

Mitchell Silberberg & Knupp LLP

12 East 49th Street, 30th Floor

New York, New York 10017

 

If to Sysorex (from and after the Effective Time), to:

 

Sysorex, Inc.

2355 Dulles Corner Boulevard, Suite 600

Herndon, Virginia 20171

Attn.: Chief Executive Officer

  

 21 

 

 

with copies to (which will not constitute notice):

 

Melanie Figueroa, Esq.

Mitchell Silberberg & Knupp LLP

12 East 49th Street, 30th Floor

New York, New York 10017

 

Addison K. Adams, Esq.
Adams Corporate Law, Inc.
1851 E 1st St, Suite 900

Santa Ana, California 92705

 

A Party may, by notice to the other Party, change the address to which such
notices are to be given.

 

Section 7.10. Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances or in jurisdictions other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall in no
way be affected, impaired or invalidated thereby. Upon such determination, the
Parties shall negotiate in good faith in an effort to agree upon such a suitable
and equitable provision to effect the original intent of the Parties.

 

Section 7.11. Force Majeure. No Party shall be deemed in default of this
Agreement or, unless otherwise expressly provided therein, any Ancillary
Agreement for any delay or failure to fulfill any obligation (other than a
payment obligation) hereunder or thereunder so long as and to the extent to
which any delay or failure in the fulfillment of such obligation is prevented,
frustrated, hindered or delayed as a consequence of circumstances of Force
Majeure. In the event of any such excused delay, the time for performance of
such obligations (other than a payment obligation) shall be extended for a
period equal to the time lost by reason of the delay. A Party claiming the
benefit of this provision shall, as soon as reasonably practicable after the
occurrence of any such event, (a) provide written notice to the other Party of
the nature and extent of any such Force Majeure condition; and (b) use
commercially reasonable efforts to remove any such causes and resume performance
under this Agreement and the Ancillary Agreements, as applicable, as soon as
reasonably practicable.

 

Section 7.12. Headings. The article, section and paragraph 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 7.13. Survival of Covenants. Except as expressly set forth in this
Agreement, the covenants, representations and warranties contained in this
Agreement, and Liability for the breach of any obligations contained herein,
shall survive the Separation and Distribution and shall remain in full force and
effect.

  

 22 

 

 

Section 7.14. Waivers of Default. Waiver by a Party of any default by the other
Party of any provision of this Agreement shall not be deemed a waiver by the
waiving Party of any subsequent or other default, nor shall it prejudice the
rights of the other Party. No failure or delay by a Party in exercising any
right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall a single or partial exercise thereof prejudice any other or
further exercise thereof or the exercise of any other right, power or privilege.

 

Section 7.15. Dispute Resolution. The dispute resolution procedures set forth in
Article VII of the Separation and Distribution Agreement shall apply to any
dispute, controversy or claim arising out of or relating to this Agreement.

 

Section 7.16. Specific Performance. Subject to the provisions of Article VII of
the Separation and Distribution Agreement, in the event of any actual or
threatened default in, or breach of, any of the terms, conditions and provisions
of this Agreement, the Party or Parties who are, or are to be, thereby aggrieved
shall have the right to specific performance and injunctive or other equitable
relief in respect of its or their rights under this Agreement, in addition to
any and all other rights and remedies at Law or in equity, and all such rights
and remedies shall be cumulative. The Parties agree that the remedies at Law for
any breach or threatened breach, including monetary damages, are inadequate
compensation for any Loss and that any defense in any Action for specific
performance that a remedy at Law would be adequate is waived. Any requirements
for the securing or posting of any bond with such remedy are hereby waived by
each of the Parties.

 

Section 7.17. Amendments. No provisions of this Agreement shall be deemed
waived, amended, supplemented or modified by a Party, unless such waiver,
amendment, supplement or modification is in writing and signed by the authorized
representative of the Party against whom it is sought to enforce such waiver,
amendment, supplement or modification.

 

Section 7.18. Interpretation. In this Agreement, (a) words in the singular shall
be deemed to include the plural and vice versa and words of one gender shall be
deemed to include the other genders as the context requires; (b) the terms
“hereof,” “herein,” and “herewith” and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole (including
all of the Schedules, Exhibits and Appendices hereto and thereto) and not to any
particular provision of this Agreement; (c) Article, Section, Schedule, Exhibit
and Appendix references are to the Articles, Sections, Schedules, Exhibits and
Appendices to this Agreement unless otherwise specified; (d) unless otherwise
stated, all references to any agreement shall be deemed to include the exhibits,
schedules and annexes to such agreement; (e) the word “including” and words of
similar import when used in this Agreement shall mean “including, without
limitation,” unless otherwise specified; (f) the word “or” shall not be
exclusive; (g) unless otherwise specified in a particular case, the word “days”
refers to calendar days; (h) references to “business day” shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions are
generally authorized or required by Law to close in the United States or New
York, New York; (i) references herein to this Agreement or any other agreement
contemplated herein shall be deemed to refer to this Agreement or such other
agreement as of the date on which it is executed and as it may be amended,
modified or supplemented thereafter, unless otherwise specified; and (j) unless
expressly stated to the contrary in this Agreement, all references to “the date
hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of
similar import shall all be references to the date set forth in the introductory
paragraph of this Agreement.

 

Section 7.19. Limitations of Liability. Notwithstanding anything in this
Agreement to the contrary, neither Sysorex or any member of the Sysorex Group,
on the one hand, nor Parent or any member of the Parent Group, on the other
hand, shall be liable under this Agreement to the other for any indirect,
punitive, exemplary, remote, speculative or similar damages in excess of
compensatory damages of the other arising in connection with the transactions
contemplated hereby (other than any such Liability with respect to a Third-Party
Claim).

 

Section 7.20. Mutual Drafting. This Agreement shall be deemed to be the joint
work product of the Parties and any rule of construction that a document shall
be interpreted or construed against a drafter of such document shall not be
applicable.

 

[Remainder of page intentionally left blank]

  

 23 

 

 

IN WITNESS WHEREOF, the Parties have caused this Employee Matters Agreement to
be executed by their duly authorized representatives as of the date first
written above.

  

  INPIXON       By: /s/ Nadir Ali     Nadir Ali, Chief Executive Officer      
SYSOREX, INC.       By: /s/ Zaman Khan     Zaman Khan, President

 

 

 

[Signature Page to Employee Matters Agreement]

 

 24 

 

 

Exhibit 3.01

 

EMPLOYEE TRANSITION AGREEMENT

 

THIS EMPLOYEE TRANSITION AGREEMENT (the “Agreement”) is entered into effective
as of August 31, 2018, by and between INPIXON, a Nevada corporation (“PARENT”),
on the one hand, and SYSOREX, INC., a Nevada corporation (“SYSOREX”), on the
other.

 

WHEREAS, the undersigned employee (“Employee”) is employed by SYSOREX pursuant
to an employment at-will arrangement; and

 

WHEREAS, SYSOREX is agreeing to furnish to PARENT, on a transitional basis, the
services of Employee;

 

NOW THEREFORE, in consideration of the covenants and promises contained herein,
SYSOREX and PARENT agree as follows:

 

1. Term of Transitional Period: SYSOREX agrees to loan Employee’s services to
PARENT from August 31, 2018 (the “Effective Date”), through and including
December 31, 2018 (the “Transitional Period”). The parties hereto contemplate
that subject to satisfactory job performance in the sole opinion of PARENT and
continued ability to work, Employee at the end of the Transitional Period or at
an earlier or later mutually agreeable date shall become an employee of PARENT
and cease employment with SYSOREX.

 

2. Reimbursement of SYSOREX’s Costs and Expenses: PARENT agrees that it shall
reimburse SYSOREX for any and all costs and expenses incurred by SYSOREX with
respect to Employee’s employment during the Transitional Period, including but
not limited to each of the following:

 

(a) Salary: During the Transitional Period, SYSOREX shall pay to Employee, and
PARENT shall in turn reimburse SYSOREX for, Employee’s pro rata annualized gross
salary in an amount equal to Employee’s salary as paid by SYSOREX as of the
Effective Date. [Said salary shall be paid to Employee in equal installments on
SYSOREX’s regular paydays and shall be subject to the SYSOREX’s usual and
required employee payroll deductions and withholdings].

 

(b) Payroll Taxes and Withholdings: During the Transitional Period, SYSOREX
shall pay or remit to the appropriate taxing authorities and/or governmental
agencies, and PARENT shall in turn reimburse SYSOREX for, any and all payroll
taxes and withholdings required by law to be paid in connection with Employee’s
employment.

 

(c) Employee Benefits: During the Transitional Period and as long as such
benefits are provided generally to other SYSOREX employees at Employee’s level,
SYSOREX shall continue to provide to Employee, and PARENT shall in turn
reimburse SYSOREX for, those pension, group insurance benefits and other group
employment benefits which Employee is currently eligible to receive and which
are otherwise provided to other SYSOREX employees at Employee’s level.

 

(d) Additional Compensation: During the Transitional Period, SYSOREX shall pay
to Employee, and PARENT shall in turn reimburse SYSOREX for, any additional
compensation, including but not limited to any production bonus, compensation
for origination, or discretionary bonus requested by PARENT to be paid to
Employee. If PARENT desires any such additional compensation be paid by SYSOREX
to Employee, PARENT shall make such request in writing.

 

  

 

 

(e) Business Expenses: During the Transitional Period, SYSOREX shall pay to or
reimburse Employee for, and PARENT shall in turn reimburse SYSOREX for, any
reasonable and necessary business expenses incurred by Employee in accordance
with PARENT’s expense reimbursement policies. Employee shall be required to
request reimbursement through SYSOREX’s standard procedures and PARENT agrees to
approve, in writing, each of Employee’s expense reports before it is submitted
to SYSOREX for payment. SYSOREX shall not reimburse Employee for any expense
which has not been approved, in writing, by PARENT.

 

SYSOREX shall invoice PARENT on a regular basis, not more frequently than every
thirty (30) days, for the foregoing costs and expenses which it will incur, and
PARENT agrees to and shall promptly reimburse SYSOREX for all such costs and
expenses within fifteen (15) days of its receipt of each such invoice, plus an
administrative service fee of [2]% of the gross amount of each respective
invoice; provided, however, that SYSOREX agrees to waive such fee for so long as
any PARENT employees are providing any necessary administrative services on
behalf of and for the benefit of SYSOREX including any employees that are
furnished to PARENT in accordance with this Agreement. Except as described
herein, PARENT understands and expressly agrees that it shall reimburse SYSOREX
for all such costs and expenses described herein, whether or not PARENT actually
utilizes Employee’s services throughout the entire Transitional Period.

 

3. Workers’ Compensation: In connection with Employee’s performance of services
during the Transitional Period, Employee shall continue be insured under
SYSOREX’s general liability and workers’ compensation insurance policies to the
same extent as its other employees, and SYSOREX shall take all reasonable steps
to have its insurers include PARENT as an additional named insured employer
under each such insurance policy; provided that PARENT shall in turn reimburse
SYSOREX for any and all additional costs and expenses required by any such
insurer to have PARENT so included as an additional named insured employer on
such insurer’s respective policy. Notwithstanding that SYSOREX is furnishing
Employee’s services to PARENT, for the purposes of any applicable workers’
compensation statute, an employment relationship shall be deemed to exist
between PARENT and Employee, with PARENT being Employee’s special employer
hereunder and SYSOREX being Employee’s general employer, as such terms are
understood for purposes of workers’ compensation statutes.

 

4. Indemnity: PARENT agrees to indemnify, defend and hold harmless, SYSOREX, and
its parent, subsidiary, affiliated and related corporations, businesses,
companies, entities, and divisions, as well as each of their respective
trustees, directors, officers, agents, partners, general partners, limited
partners, attorneys, insurers, employees, stockholders, shareholders,
representatives, assigns and successors, past, present and future, and each of
them, from and against any and all losses, claims, demands, actions, suits,
causes of action, attorneys’ fees, obligations, debts, costs, expenses, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, arising from or pertaining to Employee’s actions, services or his
work for PARENT at any time during the Transitional Period.

 

5. Governing Law and Enforcement By Arbitration: This Agreement shall be
governed and construed in accordance with the laws of the State of California
applicable to contracts entered into and fully performed in California, without
regard to principles of conflict of laws. Any controversy or claim arising out
of or relating to this Agreement, its enforcement or interpretation, or because
of an alleged breach, default, or misrepresentation in connection with any of
its provisions, shall be submitted to final and binding arbitration, to be held
in Los Angeles County, California, in accordance with California Code of Civil
Procedure Sections 1282-1284.2, with the exception of Section 1283.1(a). This
agreement to arbitrate specifically incorporates and makes applicable the
provisions of Section 1283.05. The arbitrator shall decide all issues relating
to arbitrability.

 

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6. Notices: Unless otherwise required by law, all notices, or communications
required or desired to be given hereunder shall be directed to the persons
identified below or their designees:

 

Notices to PARENT shall be directed to:

 

Inpixon

2479 E. Bayshore Road, Suite 195

Palo Alto, California 94303

Attn.: Chief Executive Officer

 

Notices to SYSOREX shall be directed to:

 

Sysorex, Inc.

2479 E. Bayshore Road, Suite 195

Palo Alto, California 94303

Attn.: Chief Executive Officer

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date or
dates designated below.

 

SYSOREX       Dated:___________________ By:       Name:     Title:       PARENT
      Dated:____________________ By:       Name:     Title:       RATIFIED BY
EMPLOYEE       Dated:____________________ By:       Employee

 

  Printed Name:

 

 

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