Item 1.01. Entry into a Material Definitive
Agreement.
Merger Agreement
On August 3, 2022, Colonnade
Acquisition Corp. II (“CLAA”), a Cayman Islands exempted company (which will migrate to and domesticate as a Delaware
corporation prior to the Closing Date (as defined below)), entered into an agreement and plan of merger, by and among CLAA, Pasadena Merger
Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of CLAA (“Merger Sub”), and Plastiq Inc., a
Delaware corporation (“Plastiq”) (as it may be amended and/or restated from time to time, the “Merger Agreement”).
The Merger
The Merger Agreement provides
that, among other things and upon the terms and subject to the conditions thereof, Merger Sub will merge with and into Plastiq, with Plastiq
surviving the merger as a wholly owned subsidiary of CLAA. The transactions contemplated by the Merger Agreement together with the other
related agreements are referred to herein as the “Business Combination.” The time of the closing of the Business Combination
is referred to herein as the “Closing.” The date of the Closing is referred to herein as the “Closing Date.”
In connection with the Business Combination, CLAA will be renamed “Plastiq Inc.” or another name to be determined by Plastiq
in its reasonable discretion (“Plastiq Pubco”).
The Domestication
At least one day prior to
the Closing Date, subject to the satisfaction or waiver of the conditions of the Merger Agreement, CLAA will migrate to and domesticate
as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended, and the Cayman Islands Companies
Act (As Revised) (the “Domestication”).
In connection with the Domestication,
(x) immediately prior to the Domestication, each then issued and outstanding Class B ordinary share of CLAA, par value $0.0001 per share
(each, a “founder share”), will convert automatically, on a one-for-one basis, into a Class A Ordinary Share of CLAA,
par value $0.0001 per share (each, a “Class A Ordinary Share”), (y) immediately following the conversion described
in clause (x), (i) each then issued and outstanding Class A Ordinary Share will convert automatically, on a one-for-one basis, into a
share of common stock, par value $0.0001 per share, of Plastiq Pubco (the “Plastiq Pubco Stock”), (ii) each then issued
and outstanding warrant of CLAA will convert automatically into a warrant to acquire one share of Plastiq Pubco Stock (each, a “Plastiq
Pubco Warrant”), pursuant to the related warrant agreement; and (iii) each then issued and outstanding unit of CLAA will convert
automatically into a unit of Plastiq Pubco (each, a “Plastiq Pubco Unit”) consisting of one share of Plastiq Pubco
Stock and one-fifth of one Plastiq Pubco Warrant, and in connection with the Closing, each Plastiq Pubco Unit will be separated into its
component parts, consisting of one share of Plastiq Pubco Stock and one-fifth of one Plastiq Pubco Warrant. No fractional Plastiq Pubco
Warrants will be issued upon the separation of the Plastiq Pubco Units.
Consideration and Structure
Under the Merger Agreement,
the Plastiq stockholders and option holders will receive an aggregate of 40.0 million shares of Plastiq Pubco Stock (the “Aggregate
Merger Consideration”) in exchange for the acquisition of all of Plastiq’s outstanding equity interests.
Pursuant to the Merger Agreement,
each option (each, a “Plastiq Option”) to purchase shares of common stock of Plastiq (“Plastiq Common Stock”)
that is outstanding as of immediately prior to the effective time of the Business Combination (the “Effective Time”)
will be converted into an option in Plastiq Pubco on substantially the same terms and conditions as are in effect with respect to each
such option immediately prior to the Effective Time.
Pursuant to the Merger Agreement,
each share of restricted stock of Plastiq (the “Plastiq Restricted Stock”) that is outstanding immediately prior to
the Effective Time will be cancelled as of the Effective Time and converted into a certain number of shares of restricted Plastiq Pubco
Stock with substantially the same terms and conditions as were applicable to the related share of Plastiq Restricted Stock.
Pursuant to the Merger Agreement,
immediately prior to the Effective Time, all of the warrants of Plastiq (the “Plastiq Warrants”) will be exercised
in full on a cash or cashless basis or terminated without exercise (the “Plastiq Warrant Settlement”). Following the
Plastiq Warrant Settlement, but immediately prior to the Effective Time, each share of preferred stock of Plastiq will be converted into
a number of shares of Plastiq Common Stock at the then-effective conversion rate under Plastiq’s governing documents. At the Effective
Time, all shares of Plastiq Common Stock will be converted into the right to receive a portion of the Aggregate Merger Consideration.
Such portion of the Aggregate Merger Consideration will be calculated by multiplying the Exchange Ratio (as defined below) by the number
of shares of Plastiq Common Stock held by such holder as of immediately prior to the Effective Time, with fractional shares rounded down
to the nearest whole share. The “Exchange Ratio” is the quotient obtained by dividing the Aggregate Merger Consideration
by the fully-diluted number of shares of Plastiq Common Stock outstanding immediately prior to the Effective Time (excluding certain shares,
as determined in accordance with the Merger Agreement).
Representations, Warranties and Covenants
The parties to the Merger
Agreement have made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants with
respect to the conduct of Plastiq and CLAA and their respective subsidiaries prior to the Closing and Plastiq’s covenant to provide
to CLAA as soon as reasonably practicable its audited financial statements for the years ended December 31, 2021 and 2020 (the “PCAOB
Financial Statements”) for inclusion in the registration statement on Form S-4 to be filed by CLAA in connection with the Business
Combination (the “Registration Statement”).
In addition, CLAA has the
right to nominate one director for election or appointment to the board of directors of Plastiq Pubco (the “Plastiq Pubco Board”).
Plastiq has the right to nominate six or more directors for election or appointment to the Plastiq Pubco Board.
Furthermore, from the date
of the Merger Agreement until the Closing, CLAA agreed to use its reasonable best efforts to obtain and make available a financing arrangement
for the benefit of Plastiq, including, but not limited to, a standby equity purchase agreement or committed equity facility, in an amount
that is reflective of the combined company’s liquidity needs after taking into account any redemptions (such financing, the “Financing
Arrangement”), and Plastiq agreed to use its reasonable best efforts to obtain such Financing Arrangement, on terms to be mutually
agreed between CLAA and Plastiq.
Conditions to Closing
The Closing is subject to
certain customary conditions, including, among other things: (a) approval of the Business Combination and related agreements and transactions
by the respective shareholders of CLAA and stockholders of Plastiq; (b) the effectiveness of the Registration Statement; (c) all specified
authorizations, consents, orders, regulatory approvals, non-objections, declarations, filings or waiting periods having been made, received
or expired, including approval from the Commissioner of the Texas Department of Banking (Plastiq holds a financial license from the State
of Texas and plans to apply for approval of a change in control as a result of the Business Combination) and the expiration or termination
of the waiting period (or any extension thereof) applicable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; (d) the Plastiq
Pubco Stock being eligible for continued listing on a national stock exchange; (e) the Domestication having been completed; (f) that CLAA
have at least $5,000,001 of net tangible assets; and (g) a Financing Arrangement is in effect and available to the combined company in
an amount that is reflective of the combined company’s liquidity needs taking into account any redemptions.
Termination
The Merger Agreement may be
terminated by CLAA or Plastiq under certain circumstances, including, among others, (i) by mutual written agreement of CLAA and Plastiq,
(ii) by either CLAA or Plastiq, if the Closing has not occurred on or before March 3, 2023, and (iii) by Plastiq, if CLAA has not obtained
the required approval of its shareholders at the extraordinary meeting.
The foregoing description
of the Merger Agreement and the Business Combination does not purport to be complete and is qualified in its entirety by the terms and
conditions of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The Merger
Agreement contains representations, warranties and covenants that the parties to the Merger Agreement made to each other as of the date
of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made
for purposes of the contract among the parties and are subject to important qualifications and limitations agreed to by the parties in
connection with negotiating the Merger Agreement. The Merger Agreement has been attached to provide investors with information regarding
its terms and is not intended to provide any other factual information about CLAA, Plastiq or any other party to the Merger Agreement.
In particular, the representations, warranties, covenants and agreements contained in the Merger Agreement, which were made only for purposes
of the Merger Agreement and as of specific dates, were solely for the benefit of the parties to the Merger 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 Merger 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 and reports and documents filed with
the U.S. Securities and Exchange Commission (the “SEC”). Investors 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 any party to
the Merger Agreement. In addition, the representations, warranties, covenants and agreements and other terms of the Merger Agreement may
be subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations and warranties
and other terms may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in CLAA’s
public disclosures.
Timeframes for Filing and Closing
CLAA expects to file the Registration
Statement as promptly as possible following receipt by CLAA of the PCAOB Financial Statements. The Closing is expected to occur in the
first quarter of 2023, following the fulfillment of the closing conditions set forth in the Merger Agreement.
Certain Related Agreements
Sponsor Support Agreement
In connection with the execution
of the Merger Agreement, CLAA entered into a sponsor support agreement (the “Sponsor Support Agreement”) with Colonnade
Sponsor II LLC, a Cayman Islands limited liability company (the “Sponsor”), and Plastiq, pursuant to which the Sponsor
agreed to, among other things, (a) vote to adopt and approve the Merger Agreement and all other documents and transactions contemplated
thereby, (b) vote all of its shares in favor of the various proposals related to the Business Combination and (c) vote against any proposals
that run counter to any provision of the Sponsor Support Agreement or to the consummation of the Business Combination, in each case, subject
to the terms and conditions of the Sponsor Support Agreement. In addition, Plastiq agreed to indemnify the Sponsor from and against certain
liabilities relating to the Business Combination for a period of six years after the Closing. Each officer and director of CLAA previously
entered into a letter agreement with CLAA in connection with CLAA’s initial public offering, pursuant to which they agreed to vote
any founder shares held by them and any public shares purchased during or after the initial public offering (including in open market
and privately-negotiated transactions) in favor of the Business Combination.
Pursuant to the Sponsor Support
Agreement, any shares of Plastiq Pubco Stock owned by the Sponsor immediately following the Closing will be subject to a lock-up period
that lasts until 180 days following the Closing, and the Sponsor will not transfer any shares from now until the Closing. Any securities
of CLAA that the Sponsor newly acquires or purchases after the date of the Sponsor Support Agreement will also be subject to the terms
of the Sponsor Support Agreement. If at least 120 days have elapsed since the Closing and the lock-up period is scheduled to end during,
or within five trading days prior to, a period during which trading would not be permitted under CLAA’s insider trading policy (the
“Blackout Period”), the lock-up period will end ten trading days prior to such Blackout Period. After the Domestication
and immediately prior to the Closing, the Sponsor will forfeit 1,250,000 founder shares held by it, and, solely in the event the amount
of cash in CLAA’s trust account (after taking into account any redemptions) is less than $75 million, the Sponsor will forfeit an
additional 1,250,000 founder shares held by it.
The foregoing description
of the Sponsor Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Sponsor
Support Agreement filed as Exhibit 10.1 hereto and incorporated by reference herein.
Plastiq Holders Voting and Support Agreement
Promptly following the execution
of the Merger Agreement, CLAA will enter into a voting support agreement (the “Plastiq Holders Voting and Support Agreement”)
with Plastiq and certain stockholders of Plastiq (the “Voting Plastiq Stockholders”) pursuant to which, the Voting
Plastiq Stockholders will agree to, among other things, vote to adopt and approve, following the effectiveness of the Registration Statement,
the Merger Agreement and all other documents and transactions contemplated thereby, in each case, subject to the terms and conditions
of the Plastiq Holders Voting and Support Agreement.
Pursuant to the Plastiq Holders
Voting and Support Agreement, the Voting Plastiq Stockholders will also agree to, among other things, (a) exercise the drag-along rights
pursuant to that certain Seventh Amended and Restated Voting Agreement, dated as of November 12, 2021, by and among Plastiq and the Stockholders
(as defined therein), (b) vote in favor of the Business Combination and any other matters necessary or reasonably requested by Plastiq
for the consummation of the Business Combination and (c) vote against any proposals that run counter to any provision of the Plastiq Holders
Voting and Support Agreement or to the consummation of the Business Combination.
The foregoing description
of the Plastiq Holders Voting and Support Agreement does not purport to be complete and is qualified in its entirety by the terms and
conditions of the form of Plastiq Holders Voting and Support Agreement, a copy of which is filed as Exhibit 10.2 hereto and incorporated
by reference herein.
Registration Rights Agreement
The Merger Agreement contemplates
that, at the Closing, Plastiq Pubco, the Sponsor, certain members of the Sponsor and certain former stockholders of Plastiq (the “Plastiq
Holders” and, collectively with the Sponsor and certain members of the Sponsor the “Holders”) will enter
into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which Plastiq Pubco will agree
to register for resale, pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), certain
shares of Plastiq Pubco Stock and other equity securities of Plastiq Pubco that are held by the parties thereto from time to time.
Pursuant to the Registration
Rights Agreement, the shares of Plastiq Pubco Shares held by the Plastiq Holders will be subject to a lock-up period, as described in
the proposed bylaws to be adopted by Plastiq Pubco at the Closing, which provides that the Plastiq Holders may not transfer any shares
of Plastiq Pubco Stock held by them for a period of 180 days after the Closing, except to certain permitted transferees.
The Registration Rights Agreement
amends and restates the registration rights agreement that was entered into by CLAA, the Sponsor and the other parties thereto in connection
with CLAA’s initial public offering. The Registration Rights Agreement will terminate on the earlier of (a) the five year anniversary
of the date of the Registration Rights Agreement or (b) with respect to any Holder, on the date that such Holder no longer holds any Registrable
Securities (as defined therein).
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 Registration Rights Agreement, a copy of which is filed as Exhibit 10.3 hereto and incorporated by reference herein.