Item 1.01 Entry Into A Material
Definitive Agreement.
Business Combination Agreement
On November 10, 2021, Crown
PropTech Acquisitions, a Cayman Islands exempted company (“Crown”), entered into a Business Combination Agreement (as
it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by
and among Crown, Crown PropTech Merger Sub I Corp., a Delaware corporation (“Merger Sub I”), Crown PropTech Merger
Sub II LLC, a Delaware limited liability company (“Merger Sub II”), and Brivo, Inc., a Nevada corporation (“Brivo”).
The Business Combination Agreement
and the transactions contemplated thereby were approved by the boards of directors of each of Crown and Brivo.
The Business Combination
The Business Combination Agreement
provides for, among other things, the following transactions: (a) one day prior to the closing date, Crown will become a Delaware corporation
(the “Domestication”) and, in connection with the Domestication, (i) Crown’s name will be changed to “Brivo,
Inc.” (“New Brivo”), (ii) each then-issued and outstanding Class A ordinary share of Crown (each, a “Crown
Class A Ordinary Share”) will convert automatically into one share of Class A common stock of New Brivo (“New Brivo
Class A Common Stock”), (iii) each then-issued and outstanding Class B ordinary share of Crown will first convert automatically,
on a one-for-one basis, into one Class A ordinary share of Crown and then immediately thereafter convert automatically, on a one-for-one
basis, into one share of New Brivo Class A Common Stock, and (iv) each then-issued and outstanding common warrant of Crown will convert
automatically into one warrant to purchase one share of New Brivo Class A Common Stock; and (b) following the Domestication and on the
closing date, (i) each share of Brivo Series A-1 preferred stock and Brivo Series A-2 preferred stock, respectively, will be automatically
converted into an equal number of shares of Brivo Class B common stock or Brivo Class A common stock, respectively (the “Conversion”),
(ii) following the Conversion, Merger Sub I will merge with and into Brivo, whereupon the separate corporate existence of Merger Sub I
will cease and Brivo will continue as a wholly owned subsidiary of New Brivo and (iii) following the first merger, Brivo will merge with
and into Merger Sub II, whereupon the separate corporate existence of Brivo will cease and Merger Sub II will continue as the surviving
company (the “Mergers”).
The Domestication, the Mergers
and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination.”
In connection with the
Business Combination, Crown will adopt a dual class stock structure pursuant to which (a) all Brivo equityholders who own less than
20% of New Brivo’s outstanding common stock and all Brivo awardholders will hold shares of New Brivo Class A Common Stock,
which will have one vote per share, and (ii) all Brivo equityholders who own 20% or more of Brivo’s outstanding common stock
will hold shares of Class B common stock of New Brivo (the “New Brivo Class B Common Stock” and, together with
the New Brivo Class A Common Stock, the “New Brivo Common Stock”), which will have 10 votes per share and is
convertible on a one-for-one basis into New Brivo Class A Common Stock. The only Brivo equityholder that owns 20% or more
Brivo’s common stock is an entity owned by Dean Drako, the Chairman of Brivo. The New Brivo Class B Common Stock will be
subject to, among other things, (i) conversion to New Brivo Class A Common Stock upon any transfer of given shares of New Brivo
Class B Common Stock (except for certain permitted transfers), (ii) automatic conversion of all New Brivo Class B Common Stock upon
the tenth (10th) anniversary of the closing date (the “Class B Common Stock Term”) (provided, that the
Class B Common Stock Term shall be extended by an additional five (5) years and expire on the fifteenth (15th)
anniversary of the closing date in the event that the stock price of New Brivo Class A Common Stock equals or exceeds $15.00 per
share on any twenty (20) trading days (which may be consecutive or not consecutive) within any consecutive thirty (30) trading day
period that begins at any time after 180 days after the closing date and ends on or prior to the five (5) year anniversary of the
closing date) and (iii) automatic conversion of all New Brivo Class B Common Stock if Dean Drako and
certain related persons cease to own at least 20% in the aggregate of the New Brivo Common Stock.
The Business Combination is
expected to close in mid-2022, following the receipt of the required approval by Crown’s shareholders and the fulfillment of other
customary closing conditions. All required approvals of the Brivo shareholders have previously been obtained.
Merger Consideration
In accordance with the terms
and subject to the conditions of the Business Combination Agreement, based on (i) an implied equity value of $800 million plus approximately
$2 million representing the aggregate exercise price of vested Brivo options and (ii) a $10 per share price for New Brivo Common Stock,
(A) each share of Brivo Class A common stock (excluding dissenting shares and taking into account the Conversion) will be canceled and
converted into the right to receive the applicable portion of the merger consideration comprised of New Brivo Class A Common Stock, as
determined in the Business Combination Agreement (the “Share Conversion Ratio”), (B) each share of Brivo Class B common
stock (excluding dissenting shares and taking into account the Conversion) will be canceled and converted into the right to receive the
applicable portion of the merger consideration comprised of New Brivo Class B Common Stock, as determined pursuant to the Share Conversion
Ratio, (C) each restricted stock unit of Brivo (whether vested or unvested, although only the vested restricted stock units will be taken
into account in calculating the Share Conversion Ratio) will be assumed by New Brivo and converted into a comparable restricted stock
unit of New Brivo based on the Share Conversion Ratio and (D) each option of Brivo (whether vested or unvested, although only the vested
options will be taken into account in calculating the Share Conversion Ratio) will be assumed by New Brivo and converted into a comparable
option that is exercisable for shares of New Brivo Class A Common Stock, with a value based on the Share Conversion Ratio.
A portion of the
consideration payable under the prior paragraph will be paid in the form of Earn-Out Shares (as defined in the Business Combination
Agreement) (the “Brivo Holder Earn-Out Shares”), which Brivo Holder Earn-Out Shares, in the case of those issued
to Brivo equity award holders, will be in the form of restricted stock units. The number of Brivo Holder Earn-Out Shares is
8,500,000. The Brivo Holder Earn-Out Shares will vest in two equal 4,250,000 tranches based on the achievement of post-closing share
price targets of New Brivo Class A Common Stock of $13.00 and $15.00, respectively, in each case, for any 20 trading days within any
30 trading day period commencing at any time after 180 days after the closing date and ending on or prior to the fifth anniversary
of the closing date. A given achievement metric described above will also be achieved if there is a transaction that results in the
shares of common stock of New Brivo being converted into the right to receive cash or other consideration having a per share value
(in the case of any non-cash consideration, as provided in the definitive transactions documents for such transaction, or if not so
provided, as determined by the board of directors of New Brivo in good faith) in excess of the applicable post-closing share price
target set forth above. The Brivo Holder Earn-Out Shares that have not vested by the fifth anniversary of the closing date shall,
automatically and without further action on the part of New Brivo or any holder thereof, be forfeited and cancelled for no
consideration. Brivo Holder Earn-Out Shares issued in lieu of an unvested Brivo equity award will also be subject to the vesting requirements of the
related equity awards and will be forfeited if the employment of the relevant employee terminates prior to the vesting date of the underlying
equity award. Prior to vesting or forfeiture, the Brivo Holder Earn-Out Shares that are in the form of shares of New Brivo Common Stock
will, with limited exceptions, be entitled to all rights of other shares of New Brivo Common Stock, and the Brivo Holder Earn-Out Shares in the
form of restricted stock units of New Brivo will be entitled to payments equivalent to the dividends that would have been paid on
the shares underlying those restricted stock units of New Brivo.
Representations and Warranties; Covenants
The Business Combination Agreement
contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type. Crown
and Brivo have also agreed to take all necessary action such that, effective immediately after the closing of the Business Combination,
the New Brivo board of directors (the “Board”) shall consist of seven directors, of whom one individual shall be designated
by Crown (who will be Richard Chera, Chairman and Chief Executive Officer of Crown), with the remaining six individuals designated by
Brivo (who will include Dean Drako, Chairman of Brivo, and Steve Van Till, Chief Executive Officer of Brivo). In addition, Crown has agreed
to adopt (i) an equity incentive plan in an amount not to exceed 8% of New Brivo’s equity interests on a fully-diluted basis with
an annual evergreen provision in an amount not to exceed 4% on a fully-diluted basis and (ii) an employee stock purchase plan in an amount
not to exceed 2% of New Brivo’s equity interests on a fully-diluted basis with an annual evergreen provision in an amount not to
exceed 1% on a fully-diluted basis.
Conditions to Each Party’s Obligations
The obligations of Crown and
Brivo to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration
or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the approval
of Crown’s and Brivo’s shareholders (which approval of Brivo shareholders has already been obtained), (iii) the approval
for listing of New Brivo Class A Common Stock to be issued in connection with the Business Combination on the New York Stock Exchange,
and (iv) Crown 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) remaining after the consummation of the sale of the PIPE Notes (as defined below), payment of deferred underwriting commissions Crown is required to pay and
after giving effect to the payment required to be made as a result of Crown shareholders exercising their redemption rights.
In addition, the obligation
of Brivo to consummate the Business Combination is subject to the fulfilment of other closing conditions, including, but not limited to,
the aggregate cash proceeds from Crown’s trust account, together with the proceeds from the sale of the PIPE Notes (as defined below),
equaling no less than $75,000,000 (after deducting any amounts paid to Crown shareholders that exercise their redemption rights in connection
with the Business Combination).
Termination
The Business Combination Agreement
may be terminated under certain customary and limited circumstances prior to the closing of the Business Combination, including, but not
limited to, (i) by mutual written consent of Crown and Brivo, (ii) subject to certain limited exceptions, by either party if any governmental
authority shall have enacted, issued, promulgated, enforced or entered any law, injunction, order, decree or ruling which has become final
and non-appealable and has the effect of making consummation of the transactions contemplated by the Business Combination Agreement illegal
or otherwise preventing or prohibiting consummation of such transactions, (iii) subject to certain limited exceptions, by either party
if there is any breach of any representation, warrant, covenant or agreement on the part of the other party set forth in the Business
Combination Agreement such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or
warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified
time periods, (iv) subject to certain limited exceptions, by either Crown or Brivo if the Business Combination is not consummated by July
10, 2022, (v) by either party if the other party has withdrawn its recommendation to its shareholders to approve the transactions contemplated
by the Business Combination Agreement or (vi) by either party, if Crown’s shareholders do not approve the transaction proposals
at the Crown shareholder meeting (subject to any adjournment or postponement thereof).
If the Business Combination
Agreement is validly terminated, none of the parties to the Business Combination Agreement will have any liability or any further obligation
under the Business Combination Agreement other than customary confidentiality obligations, other than liability of any of the parties
for (i) willful breach of the Business Combination Agreement or (ii) fraud.
The foregoing description
of the Business Combination Agreement is subject to and qualified in its entirety by reference to the full text of the Business Combination
Agreement, a copy of which is included as Exhibit 2.1 hereto, and the terms of which are incorporated by reference. The Business Combination
Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Business
Combination Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for
purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties
in connection with negotiating the Business Combination Agreement. The Business Combination Agreement is being filed to provide investors
with information regarding its terms. It is not intended to provide any other factual information about the parties to the Business Combination
Agreement. In particular, the representations, warranties, covenants and agreements contained in the Business Combination Agreement, which
were made only for purposes of the Business Combination Agreement and as of specific dates, were solely for the benefit of the parties
to the Business Combination 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 Business Combination 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, security holders and reports and documents filed with the SEC. Investors and security holders
are not third-party beneficiaries under Business Combination 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 any party to the Business
Combination Agreement. In addition, the representations, warranties, covenants and agreements and other terms of the Business Combination
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 Business Combination Agreement, which subsequent information may or may
not be fully reflected in Crown’s public disclosures.
Sponsor Agreement
Concurrently with the execution
of the Business Combination Agreement, Crown, Crown PropTech Sponsor, LLC (the “Sponsor”), Brivo and certain shareholders
of Crown that collectively own 6,210,000 Class B ordinary shares of Crown entered into a sponsor agreement (the “Sponsor Agreement”),
pursuant to which the Sponsor has agreed to, among other things, (i) vote in favor of the Business Combination Agreement and the transactions
contemplated thereby (including the Mergers) and (ii) waive any adjustment to the conversion ratio set forth in Crown’s amended
and restated memorandum and articles of association with respect to the Class B ordinary shares of Crown held by the Sponsor, in each
case, on the terms and subject to the conditions set forth in the Sponsor Agreement.
In addition, the Sponsor has
agreed that 2,384,000 of the Class B ordinary shares of Crown held by the Sponsor as of the date of the Sponsor Agreement (the “Sponsor
Earn-Out Shares”) will be subject to vesting requirements. The Sponsor Earn-Out Shares will vest in two equal 1,192,000 tranches
based on the achievement of post-closing share price targets of New Brivo Class A Common Stock of $13.00 and $15.00, respectively, in
each case, for any 20 trading days within any 30 trading day period commencing at any time after the closing date and ending on or prior
to the fifth anniversary of the closing date. A given achievement metric described above is also achieved if there is a transaction that
results in the shares of common stock of New Brivo being converted into the right to receive cash or other consideration having a per
share value (in the case of any non-cash consideration, as provided in the definitive transactions documents for such transaction, or
if not so provided, as determined by the board of directors of New Brivo in good faith) in excess of the applicable post-closing share
price target set forth above. The Sponsor Earn-Out Shares that have not vested by the fifth anniversary of the Closing shall, automatically
and without further action on the part of New Brivo or any holder thereof, be forfeited and cancelled for no consideration. Prior to vesting
or forfeiture the Sponsor Earn-Out Shares will, with limited exceptions, be entitled to all rights of other shares of New Brivo Common
Stock.
The foregoing description
of the Sponsor Agreement is subject to and qualified in its entirety by reference to the full text of the form of Sponsor Agreement, a
copy of which is included as Exhibit 10.1 hereto, and the terms of which are incorporated by reference.
PIPE Notes
In connection with the signing
of the Business Combination Agreement, Crown entered into subscription agreements (the “Subscription Agreements”) with
certain investors (the “PIPE Investors”). Pursuant to the Subscription Agreements, the PIPE Investors agreed to subscribe
for and, in connection with the consummation of the Mergers, purchase convertible notes of New Brivo (the “PIPE Notes”)
(which are convertible into New Brivo Class A Common Stock) with an aggregate principal amount of $75 million, on the terms and subject
to the conditions therein.
The PIPE Notes will be issued
under an indenture (the “Indenture”), pursuant to which, among other things, the PIPE Notes will have a 5-year term
and will bear interest in the first two years at SOFR+9.25% if paid in cash and SOFR+9.50% if paid in kind. The interest rate under the
PIPE Notes will increase by 1.0% per annum after the first two years. The PIPE Notes will be issued with an original issue discount of
3.0% of the aggregate principal amount of the PIPE Notes. The PIPE Notes are convertible at the option of holders into New Brivo Class
A Common Stock at a conversion price of $11.50 per share.
The obligation of the subscribers
to close the purchase of the PIPE Notes is subject to certain closing conditions, including Crown having at closing at least $95 million
of unrestricted cash and, to the extent a revolving credit facility exists at closing, the unrestricted cash together with the undrawn
availability under that facility being at least $115 million.
In connection with the offering
of the PIPE Notes, Crown agreed that following the closing of the Business Combination, an affiliate of Golub Capital LLC (such entity,
together with its affiliates, “Golub”), a PIPE Investor, will be entitled to designate one person to attend all meetings
of the Board and its committees as an observer, subject to certain customary exceptions. Such right shall exist until the date Golub holds
less than $36.5 million aggregate principal amount of PIPE Notes.
The foregoing description
of the Subscription Agreements and the Indenture is subject to and qualified in its entirety by reference to the full text of the form
of Subscription Agreement and Indenture, copies of which are included as Exhibits 10.2 and 10.3 hereto, respectively, and the terms of
which are incorporated by reference.
Stockholder Support Agreement
Concurrently with the execution
of the Business Combination Agreement, EMBUIA LLC, DBV Investments, L.P. and Egis Security Fund II (collectively, the “Brivo
Voting Stockholders”) entered into a support agreement (the “Stockholder Support Agreements”) with Crown,
pursuant to which the Brivo Voting Stockholders have agreed to, among other things, (i) vote in favor of the Business Combination Agreement
and the transactions contemplated thereby and (ii) be bound by certain other covenants and agreements related to the Business Combination.
The Brivo Voting Stockholders hold sufficient shares of Brivo to cause the approval of the Business Combination on behalf of Brivo.
The foregoing description
of the Support Agreements is subject to and qualified in its entirety by reference to the full text of the form of Support Agreement,
a copy of which is included as Exhibit 10.4 hereto, and the terms of which are incorporated by reference.
Amended and Restated Registration Rights Agreement
Concurrently with the execution
of the Business Combination Agreement (but effective as of the closing of the Business Combination), New Brivo, the Sponsor and certain
other stockholder of Crown and Brivo entered into an Amended and Restated Registration Rights Agreement (the “Amended and Restated
Registration Rights Agreement”) pursuant to which, among other matters, (i) subject to certain limited exceptions, certain stockholders
of Crown and Brivo will be granted certain customary demand and “piggy-back” registration rights with respect to their shares
of New Brivo Class A Common Stock, (ii) Sponsor will be subject to a one-year lock up period for its shares of New Brivo Class A Common
Stock, which lockup period will terminate early in the event that the closing price of New Brivo Class A Common Stock on the New York
Stock Exchange equals or exceeds $12.00 per share for any 20 trading days within any 30 trading day period commencing at least 150 days
following the closing of the Business Combination and (iii) certain stockholders of Brivo will be subject to a 270-day lock up of their
shares of New Brivo Class A Common Stock.
The foregoing description
of the Amended and Restated Registration Rights Agreement is subject to and qualified in its entirety by reference to the full text of
the Amended and Restated Registration Rights Agreement, a copy of which is included as Exhibit 10.5 hereto, and the terms of which are
incorporated by reference.