Item 1.01
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Entry into a Material Definitive Agreement.
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Agreement and Plan of Merger
On
August 30, 2021, Ideanomics, Inc., a Nevada corporation (“Ideanomics,” “we,” “our,” and “us”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Longboard Merger Corp. (“Merger
Sub”), VIA Motors International, Inc. (“VIA”) and Shareholder Representative Services LLC, in
its capacity as Stockholders’ Representative, whereby, at the effective time, Merger Sub will merge
with and into VIA (the “Merger”), with VIA being the surviving corporation of such merger and Ideanomics being
the owner of 100% of the issued and outstanding equity of VIA. The total aggregate consideration payable in connection with this transaction
is equal to $630,000,000, consisting of an upfront payment at the closing of the transaction of $450,000,000 and an earnout payment of
up to $180,000,000 payable before December 31, 2026, subject to fulfillment of certain conditions (such payments together, the “Merger
Consideration”). The Merger Consideration is subject to customary purchase price adjustments set forth in the Merger Agreement
and is payable in shares of common stock of Ideanomics.
The Merger
Agreement contains customary representations and warranties of Ideanomics and VIA relating to their respective businesses, financial statements
and public filings, in each case generally subject to customary materiality qualifiers. Additionally, the Merger Agreement provides for
customary pre-closing covenants of Ideanomics and VIA and termination rights, including, subject to certain exceptions, covenants relating
to conducting their respective businesses in the ordinary course consistent with past practice, excluding actions taken in good faith
in order to respond to the COVID-19 pandemic.
The Merger
Agreement contains termination rights for each of Ideanomics and VIA, including: (a) Ideanomics and VIA may mutually agree in writing
to terminate the Merger Agreement; (b) by Ideanomics, at any time prior to the closing of the Merger, if (i) VIA is in breach, in any
material respect, of the representations, warranties or covenants made by it in the Merger Agreement, (ii) such breach is not cured within
20 business days after Ideanomics has given written notice of such breach to VIA (to the extent such breach is curable) and (iii) such
breach, if not cured, would render the conditions set forth in Section 6.2 of the Merger Agreement incapable of being satisfied; (c) by
VIA, at any time prior to the closing of the Merger, if (i) Ideanomics or Merger Sub is in breach, in any material respect, of the representations,
warranties or covenants made by it in the Merger Agreement, (ii) such breach is not cured within 20 business days after VIA has given
written notice of such breach to Ideanomics (to the extent such breach is curable) and (iii) such breach, if not cured, would render the
conditions set forth in Section 6.1 of the Merger Agreement incapable of being satisfied; (d) by written notice by either VIA or Ideanomics
to the other, at any time after March 31, 2022 if the closing of the Merger shall not have occurred on or prior to such date; provided,
that the right to terminate the Merger Agreement under Section 9.1(d) of the Merger Agreement shall not be available to such party if
the action or inaction of such party or any of its affiliates has been a principal cause of or resulted in the failure of the closing
of the Merger to occur on or before such date and such action or failure to act constitutes a breach of the Merger Agreement; and (e)
by either Ideanomics or VIA if any governmental authority having competent jurisdiction has issued a final, non-appealable order or taken
any other action the effect of which is to permanently restrain, enjoin or otherwise prohibit the contemplated transactions; provided
that the right to terminate the Merger Agreement under Section 9.1(e) of the Merger Agreement shall not be available to such party if
the action or inaction of such party or any of its affiliates has been a principal cause of or resulted in such order or action and such
action or inaction constitutes a breach of the Merger Agreement.
The completion
of the Merger is subject to satisfaction or waiver of certain customary closing conditions, including (a) the receipt of the required
approvals from Ideanomics stockholders and VIA stockholders, (b) the expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and any authorization or consent from a governmental
entity required to be obtained with respect to the Merger having been obtained and remaining in full force and in effect, (c) the absence
of any governmental order or law making illegal or otherwise prohibiting the consummation of the Merger, (d) the effectiveness of the
registration statement on Form S-4 to be filed by Ideanomics pursuant to which the shares of Ideanomics common stock to be issued in connection
with the Merger are registered with the Securities and Exchange Commission (the “SEC”), (e) the authorization
for listing of the shares of Ideanomics common stock to be issued in connection with the Merger on the NASDAQ, and (f) that certain individuals
enter into employment agreements. The obligation of each party to consummate the Merger is also conditioned upon the other party’s
representations and warranties being true and correct (subject to certain materiality exceptions) and the other party having performed
in all material respects its obligations under the Merger Agreement, and the receipt of an officer’s certificate from the other
party to such effect.
The board
of directors of Ideanomics has unanimously (1) determined that the Merger Agreement and the transactions contemplated thereby, including
the Merger, are fair to, and in the best interests of, Ideanomics and its stockholders, (2) approved and declared advisable the Merger
Agreement and the transactions contemplated thereby, including the Merger, and (3) resolved to recommend that Ideanomics’ stockholders
vote in favor of the adoption of the Merger Agreement and the transactions contemplated thereby, including the Merger.
In connection
with the execution of the Merger Agreement Ideanomics provided a $42.5 million loan to VIA pursuant to a Secured Convertible Promissory
Note (the “Note”), which Note amount will be a deduction to the Merger Consideration and is secured by a lien
on all of the assets of VIA.
The Merger
Agreement and related description are intended to provide information regarding the terms of the Merger Agreement and are not intended
to modify or supplement any factual disclosures about Ideanomics in its reports filed with the SEC. In particular, the Merger Agreement
and related description are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating
to Ideanomics or VIA. The representations and warranties have been negotiated with the principal purpose of not establishing matters of
fact, but rather as a risk allocation method establishing the circumstances under which a party may have the right not to consummate the
Merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise. As is
customary, the assertions embodied in the representations and warranties made by VIA in the Merger Agreement are qualified by information
contained in confidential disclosure schedules that VIA has delivered to Ideanomics in connection with the signing of the Merger Agreement.
The representations and warranties also may be subject to a contractual standard of materiality different from those generally applicable
under the securities laws. Shareholders of Ideanomics are not third-party beneficiaries under the Merger Agreement and should not rely
on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition
of Ideanomics or VIA. Moreover, information concerning the subject matter of the representations and warranties may change after the date
of the Merger Agreement.
The foregoing
descriptions of the Merger Agreement and the transactions contemplated thereby and the Note are summaries and do not purport to be complete,
and such descriptions are qualified in their entirety by reference to the full text of the Merger Agreement and the Note, copies of which
are filed as Exhibits 2.1 and 10.2 to this Current Report on Form 8-K, respectively, and incorporated by reference herein.
Voting and Support Agreement
In connection with the execution
of the Merger Agreement, on August 30, 2021, certain stockholders and directors of VIA have entered into Voting and Support Agreements
( “Support Agreement”) pursuant to which, inter alia, such stockholders have agreed to vote all of their respective
shares of VIA common stock in favor of the Merger Agreement and the transactions contemplated thereby (including the Merger), representing
in the aggregate, at least 65% of the outstanding shares of capital stock of VIA.
The foregoing
description of the Support Agreement does not purport to be complete and is subject to, and qualified in its entirety by the full text
of such agreement, a form of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.