Item 1.01 Entry into a Material Definitive Agreement
Merger Agreement
On December 16, 2021, CleanTech Acquisition Corp.,
a Delaware corporation (“CleanTech”), entered into an Agreement and Plan of Merger (the “Merger Agreement,” and
together with the other agreements and transactions contemplated by the Merger Agreement, the “Business Combination”) with
CleanTech Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of CleanTech (“Merger Sub”), and Nauticus
Robotics, Inc., a Texas corporation (“Nauticus”). Pursuant to the terms of the Merger Agreement, a business combination between
CleanTech and Nauticus will be effected through the merger of Merger Sub with and into Nauticus, with Nauticus surviving the merger as
a wholly owned subsidiary of CleanTech (the “Merger”). The Board of Directors of CleanTech (the “Board”) has unanimously
(i) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated thereby and (ii) resolved
to recommend approval of the Merger Agreement and related matters by the stockholders of CleanTech.
Treatment of Nauticus Securities
Preferred Stock. Immediately prior to
the effective time of the Merger (the “Effective Time”) and subject to the consent of the holders of Nauticus’ preferred
stock, par value $0.01 per share (the “Nauticus Preferred Stock”), each issued and outstanding share of Nauticus Preferred
Stock shall be converted into shares of the common stock, par value $0.01 per share, of Nauticus (the “Nauticus Robotics Common
Stock”) in accordance with the Nauticus Certificate of Incorporation (collectively, the “Nauticus Preferred Stock Conversion”).
All of the shares of Nauticus Preferred Stock converted into shares of Nauticus Common Stock shall no longer be outstanding and shall
cease to exist, and each holder of Nauticus Preferred Stock shall thereafter cease to have any rights with respect to such securities.
Convertible Notes. Immediately prior
to Nauticus Preferred Stock Conversion and prior to the Effective Time, each issued and outstanding convertible promissory note of Nauticus
(the “Nauticus Convertible Notes”) will be automatically converted into shares of Nauticus Common Stock in accordance with
the terms of such Converting Convertible Note (collectively, the “Nauticus Convertible Note Conversion”). Each Converting
Convertible Note converted into shares of Nauticus Common Stock shall no longer be outstanding and shall cease to exist, and each holder
of a Converting Convertible Note shall thereafter cease to have any rights with respect to such securities.
Common Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of any Nauticus Stockholder, subject to and in consideration of the terms and
conditions set forth in the Merger Agreement, each share of Nauticus Common Stock that is issued and outstanding immediately prior to
the Effective Time (other than the Dissenting Shares (as defined in the Merger Agreement)), shall be converted into the right to receive
the applicable Per Share Merger Consideration and the Earnout Shares (as defined below). All of the shares of Nauticus Common Stock converted
into the right to receive consideration shall no longer be outstanding and shall cease to exist, and each holder of Nauticus Common Stock
shall thereafter cease to have any rights with respect to such securities, except the right to receive the applicable consideration into
which such share of Nauticus Common Stock shall have been converted into in the Merger.
Stock Options. As of the Effective Time,
each option to purchase shares of the Nauticus Common Stock (a “Nauticus Option”) granted under any Nauticus Stock Plan that
is outstanding and unexercised immediately prior to the Effective Time, whether or not then vested or exercisable, shall be assumed by
CleanTech and shall be converted into a stock option (a “CleanTech Option”) to acquire shares of CleanTech’s Common
Stock in accordance with the Merger Agreement. As of the Effective Time, each such CleanTech Option as so assumed and converted shall
be for that number of shares of CleanTech’s Common Stock determined by multiplying the number of shares of the Nauticus Common Stock
subject to such Nauticus Option immediately prior to the Effective Time by the Exchange Ratio (as defined in the Merger Agreement), which
product shall be rounded down to the nearest whole number of shares, at a per share exercise price determined by dividing the per share
exercise price of such Nauticus Option immediately prior to the Effective Time by the Exchange Ratio.
Earn-Out Shares. Following the closing
of the merger, former holders of shares of Nauticus Common Stock (including shares received as a result of the Nauticus Preferred Stock
conversion and the Nauticus Convertible Notes conversion) and, former holders of Nauticus stock options, shall each be entitled to receive
their pro rata share of up to 7,500,000 additional shares of CleanTech Common Stock (the “Earn-Out Shares”) if, within a 5-year
period following the signing date of the Merger Agreement, the closing share price of the CleanTech Common Stock equals or exceeds any
of three thresholds over any 20 trading days within a 30-day trading period (each, a “Triggering Event”) and, in respect of
a former holder of Nauticus stock options, the holder continues to provide services to CleanTech or one of its subsidiaries at the time
of such Triggering Event.
Representations and Warranties
The Merger Agreement contains customary representations
and warranties of the parties thereto with respect to, among other things, (a) entity organization, good standing and qualification, (b)
capital structure, (c) authorization to enter into the Merger Agreement, (d) compliance with laws and permits, (e) taxes, (f) financial
statements and internal controls, (g) real and personal property, (h) material contracts, (i) environmental matters, (j) absence of changes,
(k) employee matters, (l) litigation, and (m) brokers and finders.
Covenants
The Merger Agreement includes customary covenants of
the parties with respect to operation of their respective businesses prior to consummation of the Merger and efforts to satisfy conditions
to consummation of the Merger. The Merger Agreement also contains additional covenants of the parties, including, among others, covenants
providing for CleanTech and Nauticus to use reasonable best efforts to cooperate in the preparation of the Registration Statement and
Proxy Statement (as each such term is defined in the Merger Agreement) required to be filed in connection with the Merger and to obtain
all requisite approvals of their respective stockholders including, in the case of CleanTech, approvals of the restated certificate of
incorporation, the share issuance under Nasdaq rules and the omnibus incentive plan. CleanTech has also agreed to include in the Proxy
Statement the recommendation of its board that stockholders approve all of the proposals to be presented at the special meeting.
Nauticus, Inc. Incentive Plan
CleanTech has agreed to approve and adopt a 2022 omnibus
incentive plan (the “Incentive Plan”) to be effective as of the Closing and in a form mutually acceptable to CleanTech and
Nauticus. The Incentive Plan shall provide for an initial aggregate share reserve equal to 5% of the number of shares of CleanTech Common
Stock on a fully diluted basis at the Closing. Subject to approval of the Incentive Plan by the CleanTech’s stockholders, CleanTech
has agreed to file a Form S-8 Registration Statement with the SEC following the Effective Time with respect to the shares of CleanTech
Common Stock issuable under the Incentive Plan.
Non-Solicitation Restrictions
Each of CleanTech and Nauticus has agreed that from
the date of the Merger Agreement to the Effective Time or, if earlier, the valid termination of the Merger Agreement in accordance with
its terms, it will not initiate any negotiations with any party, or provide non-public information or data concerning it or its subsidiaries
to any party relating to an Acquisition Proposal or Alternative Transaction (as such terms are defined in the Merger Agreement) or enter
into any agreement relating to such a proposal. Each of CleanTech and Nauticus has also agreed to use its reasonable best efforts to prevent
any of its representatives from doing the same.
Conditions to Closing
The consummation of the Merger is conditioned upon,
among other things, (i) receipt of the CleanTech stockholder approval and Nauticus stockholder approval, (ii) the expiration or termination
of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii) the absence of any governmental
order, statute, rule or regulation enjoining or prohibiting the consummation of the Transactions, (iv) the effectiveness of the Registration
Statement under the Securities Act of 1933, as amended (the “Securities Act”), (v) CleanTech having at least $5,000,001 of
net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), (vi) solely with respect to CleanTech, (A) the representations and warranties of Nauticus being true and correct to applicable
standards applicable and each of the covenants of Nauticus having been performed or complied with in all material respects and (B) the
approval of the conversion of the convertible notes and (vii) solely with respect to Nauticus, (A) the representations and warranties
of CleanTech being true and correct to applicable standards applicable and each of the covenants of CleanTech having been performed or
complied with in all material respects (B) the receipt of the approval for listing by Nasdaq of the shares of CleanTech Common Stock to
be issued in connection with the transactions contemplated by the Merger Agreement, (C) the effective resignations of certain directors
and executive officers of CleanTech, and (D) the Minimum Cash Condition (as defined in the Merger Agreement) being equal to or exceeding
$50,000,000.
Termination
The Merger Agreement may be terminated at any time
prior to the Effective Time as follows:
(i) by mutual written consent of CleanTech and Nauticus;
(ii) by either CleanTech or Nauticus if the other party
has breached its representations, warranties, covenants or agreements in the Merger Agreement such that the conditions to closing cannot
be satisfied and such breach cannot be cured within certain specified time periods, provided that the party seeking to breach is not itself
in breach of the Merger Agreement;
(iii) by either CleanTech or Nauticus if the transactions
are not consummated on or before June 30, 2022 provided that the failure to consummate the transaction by that date is not due to a material
breach by the party seeking to terminate and which such breach is the proximate cause for the conditions to close not being satisfied;
(iv) by either CleanTech or Nauticus if a governmental
entity shall have issued a law or final, non-appealable governmental order, rule or regulation permanently enjoining or prohibiting the
consummation of the Merger, provided that, the party seeking to terminate cannot have breached its obligations under the Merger Agreement
and such breach has proximately contributed to the governmental action;
(v) by either CleanTech or Nauticus if the CleanTech
stockholders do not approve the Merger Agreement at a meeting held for that purpose;
(vi) by written notice from CleanTech to Nauticus if
the Nauticus stockholders do not approve the Merger Agreement due to the failure of Nauticus to hold a stockholder vote; or
(vii) by written notice from Nauticus to CleanTech
if the CleanTech board shall have publicly withdrawn, modified or changed in an adverse manner its recommendation to vote in favor of
the merger and other proposals.
The Merger Agreement and other agreements described
below have been included to provide investors with information regarding their respective terms. They are not intended to provide any
other factual information about CleanTech, Nauticus or the other parties thereto. In particular, the assertions embodied in the representations
and warranties in the Merger Agreement were made as of a specified date, are modified or qualified by information in one or more confidential
disclosure letters prepared in connection with the execution and delivery of the Merger Agreement, may be subject to a contractual standard
of materiality different from what might be viewed as material to investors, or may have been used for the purpose of allocating risk
between the parties. Accordingly, the representations and warranties in the Merger Agreement are not necessarily characterizations of
the actual state of facts about CleanTech, Nauticus or the other parties thereto at the time they were made or otherwise and should only
be read in conjunction with the other information that CleanTech makes publicly available in reports, statements and other documents filed
with the SEC. CleanTech and Nauticus investors and securityholders are not third-party beneficiaries under the Merger Agreement.
Certain Related Agreements
Support Agreements. In connection with
the execution of the Merger Agreement, CleanTech Sponsor I LLC and CleanTech Investments, LLC (each, a “Sponsor,” and collectively,
the “Sponsors”) entered into a support agreement (the “Sponsors Support Agreement”) with Nauticus pursuant to
which the Sponsors have agreed to vote all shares of CleanTech Common Stock beneficially owned by them in favor of the Merger.
In addition, in connection with the execution of the
Merger Agreement, certain stockholders of Nauticus owning approximately 88.8% of the voting power of Nauticus entered into a support agreement
(the “Company Support Agreement”) with CleanTech and Nauticus pursuant to which the stockholders agreed to vote all shares
of Nauticus beneficially owned by them in favor of the Merger.
Subscription Agreements. In connection
with the execution of the Merger Agreement, CleanTech entered into subscription agreements (collectively, the “Subscription Agreements”)
with certain parties subscribing for shares of CleanTech Common Stock (the “Subscribers”) pursuant to which the Subscribers
have agreed to purchase, and CleanTech has agreed to sell to the Subscribers, an aggregate of 3,530,000 shares of CleanTech Common Stock,
for a purchase price of $10.00 per share and an aggregate purchase price of $35.3 million. The obligations to consummate the transactions
contemplated by the Subscription Agreements are conditioned upon, among other things, customary closing conditions and the consummation
of the transactions contemplated by the Merger Agreement.
Securities Purchase Agreement. In connection
with the execution of the Merger Agreement, CleanTech and Nauticus entered into Securities Purchase Agreement with certain parties purchasing
up to an aggregate of $40,000,000 in principal amount of secured debentures (the “Debentures”) and warrants (the “Warrants”)
equal to 100% of the aggregate issued amount of the Debentures divided by the then conversion price, with an exercise price equal to $20
per share of Common Stock, subject to adjustment (“Debt Financing”). The obligations to consummate the transactions contemplated
by the Securities Purchase Agreement are conditioned upon, among other things, customary closing conditions and the consummation of the
transactions contemplated by the Merger Agreement.
Amended and Restated Registration Rights Agreement.
In connection with the Closing, Nauticus, CleanTech and certain stockholders of each of Nauticus and CleanTech who will receive
shares of CleanTech Common Stock pursuant to the Merger Agreement, will enter into an amended and restated registration rights agreement
(“Registration Rights Agreement”) mutually agreeable to CleanTech and Nauticus, which will become effective upon the consummation
of the Merger.
Lock-up Agreement and Arrangements. In
connection with the Closing, the Sponsors and certain Nauticus stockholders will enter into a lock-up agreement (the “Sponsor Lock-Up
Agreement” and “Company Stockholder Lock-up Agreement) with Nauticus and CleanTech, pursuant to which each will agree, subject
to certain customary exceptions, not to:
(i) offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any shares of CleanTech Common Stock received as merger consideration and held by it immediately after
the Effective Time (the “Lock-Up Shares”), or enter into a transaction that would have the same effect;
(ii) enter into transaction that would have the same
effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership
of any of such shares, whether any of these transactions are to be settled by delivery of such shares, in cash or otherwise; or
(iii) publicly disclose the intention to make any offer,
sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage in any “Short Sales”
(as defined in the Sponsor Lock-Up Agreement and Company Stockholder Lock-up Agreement) with respect to any security of CleanTech;
during a “Lock-Up Period” under their respective agreements.
Under the Sponsor Lock-up Agreement, the Lock-Up period
means the period commencing on the Closing Date and ending on the earlier of (x) the one year anniversary of the Closing Date; (y) the
date on which the volume weighted average price of shares of common stock equals or exceeds $13.00 per share for twenty (20) of any thirty
(30) consecutive trading days commencing after the Closing on Nasdaq, and (z) the date specified in a written waiver duly executed by
Nauticus; provided that the restrictions set forth in the Sponsor Lock-up Agreement do not apply to (1) transfers or distributions to
such stockholder’s current or former general or limited partners, managers or members, stockholders, other equity holders or direct
or indirect affiliates (within the meaning of Rule 405 under the Securities Act of 1933, as amended) or to the estates of any of the foregoing;
(2) transfers by bona fide gift to a member of the stockholder’s immediate family or to a trust, the beneficiary of which is the
stockholder or a member of the stockholder’s immediate family for estate planning purposes; (3) by virtue of the laws of descent
and distribution upon death of the stockholder; or (4) pursuant to a qualified domestic relations order, in each case where such transferee
agrees to be bound by the terms of the Sponsor Lock-up Agreement.
Under the Company Lock-up Agreement, the Lock-Up period
means the period commencing on the Closing Date and ending on the earlier of (x) the date that is 180 calendar days after the consummation
of the Business Combination, (y) the date on which the volume weighted average price of shares of common stock equals or exceeds $13.00
per share for twenty (20) of any thirty (30) consecutive trading days commencing after the Closing on Nasdaq, and (z) the date specified
in a written waiver duly executed by the Sponsors and CleanTech; provided that the restrictions set forth in the Company Lock-up Agreement
do not apply to (1) transfers or distributions to such stockholders current or former general or limited partners, managers or members,
stockholders, other equityholders or other direct or indirect affiliates (within the meaning of Rule 405 under the Securities Act of 1933,
as amended) or to the estates of any of the foregoing; (2) transfers by bona fide gift to a member of the stockholder’s immediate
family or to a trust, the beneficiary of which is the stockholder or a member of the stockholder’s immediate family for estate planning
purposes; (3) by virtue of the laws of descent and distribution upon death of the stockholder; (4) pursuant to a qualified domestic relations
order, in each case where such transferee agrees to be bound by the terms of this Agreement; (5) transfers or distributions of, or other
transactions involving, securities other than the Lock-up Shares (including, without limitation, securities acquired in the PIPE or in
open market transactions); or (6) in the case of Angela Berka (or Reginald Berka with respect to any community, marital or similar interest
he may have in the following shares), the transfer of up to 1,000,000 shares of Lock-up Shares in a privately negotiated sale to another
company stockholder, who shall enter into a Lock-Up Agreement (or amend an existing Lock-Up Agreement) containing the same terms and conditions
as this Agreement with respect to such shares, or the entry into any agreement with respect to such a sale entered into before, at or
after the Effective Time.
Director Nomination Agreement. In connection
with the Closing, CleanTech, the Sponsors and Nauticus entered into a Director Nomination Agreement (the “Director Nomination Agreement”)
pursuant to which CleanTech agreed to nominate an individual designated by the Sponsors to the Board of Directors of the combined company,
effective as of immediately prior to the Closing.
Director Designation Agreement. In connection
with the execution of the Merger Agreement, CleanTech, Nauticus and certain Nauticus stockholders entered into a director designation
agreement with Transocean, Inc. (“Transocean”) to take all necessary action to cause a member designated by Transocean (the
“Transocean Designee”) to remain on, or otherwise be appointed to, the Board, from and after the effective time of the Merger,
as a Class III member of the Board, for an initial term expiring at the third annual meeting following the date of the Second Amended
and Restated Certificate of Incorporation to be adopted in connection with the Merger.
Indemnification Agreements. In connection
with the Closing, CleanTech has agreed to enter into customary indemnification agreements, in form and substance reasonably acceptable
to CleanTech and Nauticus, with the individuals who will be nominated and, subject to stockholder approval, elected to CleanTech’s
board of directors effective as of the Closing.
The foregoing descriptions of agreements and the transactions
and documents contemplated thereby are not complete and are subject to and qualified in their entirety by reference to the Merger Agreement,
Sponsor Support Agreement, Company Support Agreement, Subscription Agreement, Securities Purchase Agreement, Company Lock-up Agreement,
Sponsor Lock-up Agreement, Amended and Restated Registration Rights Agreement, Director Nomination Agreement and Director Designation
Agreement, copies of which are filed with this Current Report on Form 8-K as Exhibit 2.1, Exhibit 10.1, 10.2, 10.3, 10.4, 10.5, 10.6,
10.7, 10.8, and 10.9, respectively, and the terms of which are incorporated by reference herein.