Item
1.01 Entry into a Material Definitive Agreement.
Purchase
Agreement
On
May 14, 2023, Dune Acquisition Corporation, a Delaware corporation (“Dune”), entered into a Unit Purchase Agreement (the
“Purchase Agreement”), by and among Global Gas Holdings LLC, a Delaware limited liability company and a direct, wholly owned
subsidiary of Dune (“Holdings”), Global Hydrogen Energy LLC, a Delaware limited liability company (“Global Hydrogen”),
William Bennett Nance, Jr., an individual (“W. Nance”), Sergio Martinez, an individual (“S. Martinez”), and Barbara
Guay Martinez, an individual (“B. Martinez” and, together with W. Nance and S. Martinez, the “Sellers”).
The
board of directors of Dune (the “Board”) has unanimously (i) approved and declared advisable the Purchase Agreement and the
other transactions contemplated thereby (the “Business Combination”) and (ii) resolved to recommend approval of the Purchase
Agreement and related matters by the stockholders of Dune. W. Nance, the Founder and Chief Executive Officer of Global Hydrogen, is also
a director of Dune. Mr. Nance was recused from, and did not participate in, the consideration or approval of the Purchase Agreement and
the Business Combination by the Board.
Headquartered
in New York and founded in 2023, Global Hydrogen is an industrial gas supplier targeting privately and publicly-funded hydrogen development
and carbon recovery projects.
Consideration
In
accordance with the terms and subject to the conditions of the Purchase Agreement, at the closing of the Business Combination (the “Closing”),
(a) Dune will contribute to Holdings all of its assets (excluding its interests in Holdings and the aggregate amount of cash proceeds
required to satisfy any redemptions by Dune’s public stockholders (“Dune Stockholder Redemptions”)), and in exchange
therefor, Holdings will issue to Dune a number of common equity units of Holdings (“Holdings Common Units”) which will equal
the number of total shares of Dune’s Class A common stock, par value $0.0001 per share (“Dune Class A Common Stock”),
issued and outstanding immediately after the Closing (taking into account any equity financing agreements entered into by Dune between
the signing date of the Purchase Agreement and the Closing and giving effect to all Dune Stockholder Redemptions) (such transactions,
the “SPAC Contribution”) and (b) immediately after the SPAC Contribution, the Sellers will transfer, convey, assign and deliver
all of the limited liability company equity interests of Global Hydrogen (“Company Units”) to Holdings in exchange for shares
of Dune’s Class B voting non-economic common stock, par value $0.0001 per share (“Dune Class B Common Stock” and, together
with Dune Class A Common Stock, “Dune Common Stock”), and Holdings Common Units (together with the SPAC Contribution, the
“Combination Transactions”), as a result of which, (i) each issued and outstanding Company Unit immediately prior to the
Combination Transactions will be held by Holdings, (ii) each Seller will receive an aggregate number of Holdings Common Units and shares
of Dune Class B Common Stock equal to the number of Company Units held by such Seller, multiplied by the Company Exchange Ratio (as defined
below), and (iii) Dune will change its name to Global Gas Corporation (“New Global Hydrogen”) and New Global Hydrogen will
be the publicly traded reporting company in an “Up-C” Structure (clauses (i) through (iii) collectively, and together with
the Combination Transactions and the other transactions contemplated by the Purchase Agreement, being referred to collectively hereafter
as the “Transactions”).
In
accordance with the terms and subject to the conditions of the Purchase Agreement, at the Closing, the issued and outstanding
Company Units of each Seller will be transferred, conveyed, assigned and delivered in exchange for (i) a number of shares of Dune
Class B Common Stock equal to the product of (x) the number of Company Units held by such Seller and (y) the exchange ratio (the
“Company Exchange Ratio”) determined by dividing (A) the quotient of $57,500,000 divided by the number of Company Units
issued and outstanding immediately prior to the Closing by (B) $10.00 per share and (ii) a number of Holdings Common Units equal to
the number of Dune Class B Common Stock to be received by such Seller pursuant to clause (i) hereof (clauses (i) and (ii)
collectively, the “Aggregate Consideration”).
Conditions
to Closing
The
obligations of Dune and Global Hydrogen to consummate the Business Combination pursuant to the Purchase Agreement are subject to the
satisfaction or waiver (if legally permitted) of certain closing conditions, including, among others: (i) no order, statute, rule or
regulation enjoining, prohibiting, or making illegal the consummation of the Business Combination; (ii) approval of the Business Combination
and related agreements and the Transactions by the stockholders of Dune; (iii) Dune Common Stock shall be listed or have been approved
for listing on the Nasdaq Capital Market (“Nasdaq”) or, to the extent applicable, the New York Stock Exchange (the “NYSE”);
and (iv) customary bring-down conditions.
Covenants
The
Purchase Agreement contains certain covenants, including, among others, providing for: (i) the parties to conduct their respective businesses
in the ordinary course through the Closing; (ii) Global Hydrogen to provide to Dune and its representatives reasonable access through
the Closing to Global Hydrogen’s properties, books, records and personnel; (iii) Global Hydrogen to prepare and deliver certain
of its unaudited interim financial statements and audited financial statements; (iv) Dune and Global Hydrogen to prepare, and Dune to
file, a proxy statement in connection with the Business Combination and Dune to take certain other actions to obtain the requisite approval
of Dune stockholders of certain proposals regarding the Business Combination; (v) Dune to adopt, subject to the approval of its stockholders,
New Global Hydrogen’s equity incentive plan; and (vi) the parties to not initiate any negotiations or enter into any agreements
for certain alternative transactions.
Representations
and Warranties
The
Purchase Agreement contains customary representations and warranties by Dune, Holdings, the Sellers and Global Hydrogen. The representations
and warranties of the respective parties to the Purchase Agreement will not survive the Closing.
Board
of Directors
In
accordance with the terms and subject to the conditions of the Purchase Agreement, following the Closing, the Board will consist of at
least five (5) directors, with the Board to be divided into three (3) classes. The directors shall initially include: (i) W. Nance as
a Class I director; (ii) two (2) independent director nominees (who shall be Class II directors) to be mutually designated by Dune and
Global Hydrogen prior to the Closing; and (iii) two (2) independent director nominees (who shall be Class III directors) to be designated
by Dune prior to the Closing; and (iv) such other director nominees to be designated by Global Hydrogen pursuant to written notice to
Dune following the date of the Purchase Agreement.
Termination
The Purchase Agreement
may be terminated under certain limited circumstances prior to the Closing, including, among others, (i) by mutual written consent
of Dune and Global Hydrogen, (ii) by either Dune or Global Hydrogen if there is in effect any law or final, non-appealable order,
judgment, injunction, decree, writ, ruling, stipulation, determination or award issued, promulgated, made, rendered or entered into
by any court or other tribunal of competent jurisdiction that permanently restrains, enjoins, makes illegal or otherwise prohibits
the consummation of the Business Combination, (iii) by either Dune or Global Hydrogen if the Closing has not occurred by 11:59 p.m.,
Eastern Time, on December 31, 2024, (iv) by either Dune or Global Hydrogen if certain approvals of Dune’s stockholders are not
obtained, (v) by Dune if Global Hydrogen has breached or failed to perform any of its representations, warranties, covenants or
other agreements under the Purchase Agreement, which breach or failure to perform (A) would result in the failure to satisfy the
representations and warranties and covenant bring-down conditions to Dune’s obligation to close and (B) is not capable of
being cured or cannot be cured during the applicable cure period and (vi) by Global Hydrogen if Dune has breached or failed to
perform any of its representations, warranties, covenants or other agreements under the Purchase Agreement, which breach or failure
to perform (A) would result in the failure to satisfy the representations and warranties and covenant bring-down conditions to
Global Hydrogen’s obligation to close and (B) is not capable of being cured or cannot be cured during the applicable cure
period. In the event the Purchase Agreement is terminated as a result of clause (iii) above (unless at or prior to the time of such
termination, there has been a Change in Recommendation (as defined in the Purchase Agreement)) or as a result of clause (v) above,
Global Hydrogen shall pay to Dune, within five (5) business days of the termination date, a termination fee of $7,500,000 (the
“Termination Fee”), which shall be (i) payable in cash or (ii) by transfer of 50% of the fully diluted equity of Global
Hydrogen, free and clear of all Liens (as defined in the Purchase Agreement). The Sellers provide a guaranty to Dune, on a joint and
several basis, of the due and punctual payment of the Termination Fee in the Support Agreement (as defined below).
A
copy of the Purchase Agreement is filed with this Current Report as Exhibit 2.1 and is incorporated herein by reference, and the foregoing
description of the Purchase Agreement is qualified in its entirety by reference thereto.
Certain
Related Agreements
Support
Agreement
On
May 14, 2023, Dune, Holdings, Global Hydrogen and each of the Sellers entered into a support agreement (the “Support Agreement”).
Under the Support Agreement, the Sellers agreed that they (i) will not transfer their Company Units, (ii) will continue to support, and
refrain from taking certain actions, in each case, subject to the terms and conditions contemplated by the Support Agreement and (iii)
guarantee to Dune, on a joint and several basis, certain payment obligations under the Purchase Agreement (including payment of the Termination
Fee).
A
copy of the Support Agreement is filed with this Current Report as Exhibit 10.1 and is incorporated herein by reference, and the foregoing
description of the Support Agreement is qualified in its entirety by reference thereto.
Sponsor
Agreement
On
May 14, 2023, Dune, Dune Acquisition Holdings LLC, a Delaware limited liability company (the “Sponsor”), Holdings and Global
Hydrogen entered into a sponsor agreement (the “Sponsor Agreement”). Under the Sponsor Agreement, the Sponsor agreed to,
among other things, (i) vote in favor of the Business Combination, (ii) waive the anti-dilution protection afforded under Dune’s
amended and restated certificate of incorporation in respect of the shares of Dune Class B Common Stock held by the Sponsor in connection
with the Business Combination and (iii) not transfer its shares of Dune capital stock and will continue to support, and refrain from
taking certain actions that would negatively affect, the Transactions, in each case, subject to the terms and conditions contemplated
by the Sponsor Agreement. Pursuant to the Sponsor Agreement, Dune agreed to indemnify the Sponsor against certain liabilities it may
incur in connection with the Business Combination, subject to certain exceptions.
A
copy of the Sponsor Agreement is filed with this Current Report as Exhibit 10.2 and is incorporated herein by reference, and the foregoing
description of the Sponsor Agreement is qualified in its entirety by reference thereto.
Lock-up
Agreement
On
May 14, 2023, Dune, the Sponsor and each of the Sellers entered into a lock-up agreement (the “Lock-up Agreement”), which
will be effective as of the Closing. Under the Lock-up Agreement, the Sponsor and the Sellers agreed to certain restrictions on transfer
with respect to the shares of New Global Hydrogen common stock and private placement warrants they hold or will receive upon the Closing,
which restrictions amend and supersede the restrictions on transfer the Sponsor agreed to in that certain letter agreement, dated December
17, 2020, entered into by and among Dune, the Sponsor and Dune’s officers and directors in connection with Dune’s initial
public offering. The restrictions on transfer contained in the Lock-up Agreement apply to both the Sponsor and Global Hydrogen’s
existing stockholders and unitholders, respectively, and end: (i) with respect to New Global Hydrogen’s common stock, on the earlier
of twelve (12) months after (and excluding) the date of the Closing and the date on which New Global Hydrogen completes a liquidation,
merger, capital stock exchange, reorganization, bankruptcy or other similar transaction that results in all of the common stock of New
Global Hydrogen being converted into cash, securities or other property; and (ii) with respect to New Global Hydrogen’s private
placement warrants, thirty days after the Closing.
A
copy of the Lock-up Agreement is filed with this Current Report as Exhibit 10.3 and is incorporated herein by reference, and the foregoing
description of the Lock-up Agreement is qualified in its entirety by reference thereto.
Nomination
Agreement
The
Purchase Agreement contemplates that, at the Closing, New Global Hydrogen will enter into a nomination agreement (the “Nomination
Agreement”) with each of the Sellers and the Sponsor, pursuant to which each of the Sellers and the Sponsor will have the right
to nominate members of the board of directors of New Global Hydrogen in the number and subject to the beneficial ownership thresholds
and terms and conditions set forth therein.
The
Sellers, to the extent they collectively beneficially own a number of shares of New Global Hydrogen’s common stock representing
their Initial Share Ownership (as defined in the Nomination Agreement), will have the right, but not the obligation, to appoint or nominate
for election to New Global Hydrogen’s board of directors, as applicable, one (1) individual, to serve as a Class I director.
The
Sponsor and the Sellers, to the extent the Sponsor beneficially owns a number of shares of New Global Hydrogen’s common stock representing
at least 25% of its Initial Share Ownership and the Sellers collectively beneficially own a number of shares of New Global Hydrogen’s
common stock representing its Initial Share Ownership, will have the right, but not the obligation, to jointly appoint or nominate for
election to New Global Hydrogen’s board of directors, as applicable, two (2) individuals, to serve as Class II directors, both
of whom shall be independent directors (under the rules and regulations of Nasdaq or, to the extent applicable, the NYSE).
The
Sponsor, to the extent the Sponsor beneficially owns a number of shares of New Global Hydrogen’s common stock representing at least
25% of its Initial Share Ownership, will have the right, but not the obligation, to appoint or nominate for election to New Global Hydrogen’s
board of directors, as applicable, two (2) individuals, to serve as Class III directors, both of whom shall be independent directors
(under the rules and regulations of Nasdaq or, to the extent applicable, the NYSE). Additionally, for so long as the Sponsor is entitled
to appoint or nominate any person to New Global Hydrogen’s board of directors under the Nomination Agreement, New Global Hydrogen
agrees to take all necessary action to cause its board of directors to appoint one Class III director to serve as Chairperson of its
board of directors.
The
foregoing description of the Nomination Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions
of the form of the Nomination Agreement, a copy of which is included as Exhibit G to the Purchase Agreement, filed as Exhibit 2.1 hereto
and incorporated by reference herein.
Registration
Rights Agreement
The
Purchase Agreement contemplates that, at the Closing, New Global Hydrogen, the Sponsor, certain members of Sponsor and certain of their
permitted transferees and the Sellers and certain of their permitted transferees will enter into a Registration Rights Agreement (the
“Registration Rights Agreement”), pursuant to which, among other things, Dune will agree to register for resale, pursuant
to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), certain shares of New Global Hydrogen’s
common stock and other equity securities that are held by the parties thereto from time to time and the Sponsor and the Sellers will
be granted certain registration rights.
The
foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the terms
and conditions of the form of the Registration Rights Agreement, a copy of which is included as Exhibit F to the Purchase Agreement,
filed as Exhibit 2.1 hereto and incorporated by reference herein.
Exchange
Agreement
The
Purchase Agreement contemplates that, at the Closing, Holdings, New Global Hydrogen and the Sellers will enter into an Exchange Agreement
(the “Exchange Agreement”). Pursuant to the Exchange Agreement, the Sellers will have the right from time to time following
the Closing, on the terms and conditions contained in the Exchange Agreement, to exchange their Holdings Common Units together with their
shares of Dune Class B Common Stock for, at the option of New Global Hydrogen, shares of New Global Hydrogen’s Class A common stock
or cash.
The
foregoing description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions
of the form of the Exchange Agreement, a copy of which is included as Exhibit J to the Purchase Agreement, filed as Exhibit 2.1 hereto
and incorporated by reference herein.
The
foregoing descriptions of the Purchase Agreement, the Support Agreement, the Sponsor Agreement, the Lock-up Agreement, the Nomination
Agreement, the Registration Rights Agreement and the Exchange Agreement, and the transactions and documents contemplated thereby, are
not complete and are subject to and qualified in their entirety by reference to the Purchase Agreement, the Support Agreement, the Sponsor
Agreement, the Lock-up Agreement, the Nomination Agreement, the Registration Rights Agreement and the Exchange Agreement, copies of which
are filed with this Current Report on Form 8-K as Exhibit 2.1, Exhibit 10.1, Exhibit 10.2, Exhibit 10.3 and Exhibits G, F and J to Exhibit
2.1 hereto, respectively, and the terms of which are incorporated by reference herein.
The
Purchase Agreement, the Support Agreement, the Sponsor Agreement, the Lock-up Agreement, the Nomination Agreement, the Registration Rights
Agreement and the Exchange Agreement have been included to provide investors with information regarding their terms. They are not intended
to provide any other factual information about Dune, Global Hydrogen or their respective affiliates. The representations, warranties,
covenants and agreements contained in the Purchase Agreement, the Support Agreement, the Sponsor Agreement, the Lock-up Agreement, the
Nomination Agreement, the Registration Rights Agreement, the Exchange Agreement and the other documents related thereto are only for
purposes of the Purchase Agreement as of the specific dates therein, are solely for the benefit of the parties to the Purchase Agreement,
the Support Agreement, the Sponsor Agreement, the Lock-up Agreement, the Nomination Agreement, the Registration Rights Agreement and
the Exchange Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk between the parties to the Purchase Agreement, the Sponsor Agreement,
the Support Agreement, the Lock-up Agreement, the Nomination Agreement, the Registration Rights Agreement or the Exchange Agreement instead
of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ
from those applicable to investors. Investors are not third-party beneficiaries under the Purchase Agreement, the Support Agreement,
the Sponsor Agreement, the Lock-up Agreement, the Nomination Agreement, the Registration Rights Agreement or the Exchange Agreement and
should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the
actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information
concerning the subject matter of representations and warranties may change after the date of the Purchase Agreement, the Support Agreement,
the Sponsor Agreement, the Lock-up Agreement, the Nomination Agreement, the Registration Rights Agreement or the Exchange Agreement,
as applicable, which subsequent information may or may not be fully reflected in the public disclosures of Dune or Global Hydrogen.
