Item 1.01 Entry into a Material Definitive Agreement.
Business Combination Agreement
Sports Ventures Acquisition
Corp., a Cayman Islands corporation (“SVAC”), is a blank check company formed for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On January
25, 2022, SVAC entered into a Business Combination Agreement (the “Business Combination Agreement”) with Prime Focus
World N.V., a public limited liability company incorporated in the Netherlands (“Prime Focus World”), PF Overseas Limited,
a limited liability company incorporated in Mauritius, Prime Focus 3D Cooperatief U.A., a Dutch cooperative association and AKICV LLC,
a Delaware limited liability company (“Sponsor”).
The Business Combination Agreement Transactions
The Business Combination
Agreement provides that, among other things and upon the terms and subject to the conditions thereof, the following transactions will
occur (together with the other agreements and transactions contemplated by the Business Combination Agreement, the “Business
Combination”): (i) SVAC and the stockholders of Prime Focus World (the “Prime Focus World Stockholders”)
shall consummate the “Company Exchange,” pursuant to which SVAC shall acquire from the Prime Focus World Stockholders, and
the Prime Focus World Stockholders shall transfer, convey and deliver to SVAC, all of the ordinary and preferred shares of Prime Focus
World (the “Prime Focus World Shares”) issued and outstanding as of immediately prior to the Company Exchange, and
each Prime Focus World Stockholder shall receive, in consideration for such transfer, conveyance and delivery of each Prime Focus World
Share, a number of SVAC Class A Ordinary Shares equal to such Prime Focus World Stockholder’s portion of the consideration to which
such Prime Focus World Stockholder is entitled in accordance with the Business Combination Agreement and as set forth in the allocation
statement to be delivered pursuant thereto (together, the “Company Exchange” and the time at which the Company Exchange
actually occurs the, “Company Exchange Effective Time”) and (ii) effective as of the Company Exchange Effective Time,
any outstanding options to purchase Prime Focus World Shares shall be exchanged for options to purchase SVAC Class A Ordinary Shares,
as further described in the Business Combination Agreement.
The Board of Directors of
SVAC (the “Board”) has unanimously (i) approved and declared advisable the Business Combination Agreement and the Business
Combination and (ii) resolved to recommend approval of the Business Combination Agreement and related matters by the stockholders of SVAC.
Conditions to Closing
The Business Combination
Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the
Business Combination and related agreements and transactions by the stockholders of SVAC and of Prime Focus World , (ii) the filing of
a proxy statement by SVAC in connection with the Business Combination, (iii) expiration or termination of any waiting period under applicable
regulatory laws, (iv) the absence of any law or order enjoining or prohibiting the Business Combination, (v) the absence of any event
or circumstance having a material adverse effect, as defined in the Business Combination Agreement, (vi) that SVAC have at least $5,000,001
of net tangible assets upon Closing (as hereinafter defined), (vii) receipt of approval for listing on Nasdaq the shares of SVAC Class
A Ordinary Shares to be issued in connection with the Business Combination, and (viii) the bring down of representations, warranties and
covenants of the other party, subject to certain materiality qualifiers.
Other conditions to Prime
Focus World’s obligations to consummate the Business Combination include, among others, that as of the closing of the Business Combination
(the “Closing”), (i) SVAC shall have available cash equal or greater to $350,000,000 and (ii) any transactions required
by the Backstop Agreement (as hereinafter defined) shall have been consummated pursuant to its terms.
Covenants
The Business Combination
Agreement contains additional covenants, including, among others, providing for (i) the parties to conduct their respective businesses
in the ordinary course through the Closing, (ii) the parties to not initiate any negotiations or enter into any agreements for certain
alternative transactions, (iii) SVAC to use its commercially reasonable efforts to comply with its obligations under the Subscription
Agreements (as hereinafter defined), (iv) SVAC to prepare and file a proxy statement and take certain other actions to obtain the requisite
approval of SVAC stockholders of certain proposals regarding the Business Combination, (v) SVAC to keep its Ordinary Class A Shares listed
on Nasdaq and to cause the SVAC Ordinary Class A Shares issued in connection with the Business Combination to be listed on Nasdaq, and
(vi) SVAC to remain compliant with Securities Exchange Commission (“SEC”) reporting requirements.
Representations and Warranties
The Business Combination
Agreement contains customary representations and warranties by SVAC, Sponsor and Prime Focus World. The representations and warranties
of the respective parties to the Business Combination Agreement generally will not survive the Closing.
Termination
The Business Combination
Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of SVAC and Prime Focus World, (ii) by SVAC
if the Stockholder Support and PFL Agreements (as hereinafter defined) are not delivered to SVAC within five (5) business days of the
date of the Business Combination Agreement, and (iii) by either SVAC or Prime Focus World in certain other circumstances set forth in
the Business Combination Agreement, including (a) if certain approvals of the stockholders of SVAC are not obtained as set forth in the
Business Combination Agreement, (b) if the consummation of the Business Combination (or any transaction contemplated by the Business Combination
Agreement) is permanently enjoined or prohibited by the terms of a final, non-appealable Governmental Order (as defined in the Business
Combination Agreement) or applicable Law (as defined in the Business Combination Agreement), (c) in the event of certain uncured breaches
by the other party, or (d) if the Closing has not occurred on or before August 31, 2022 (the “End Date”).
Certain Related Agreements
A&R Registration Rights Agreement
The Business Combination
Agreement contemplates that, at the Closing, SVAC and the holders set forth on Exhibit A thereto will enter into an Amended and Restated
Registration Rights Agreement that will amend and restate the registration rights agreement dated January 5, 2021 among SVAC and the other
parties thereto (as so amended and restated, the “A&R Registration Rights Agreement”), pursuant to which SVAC will
agree to register for resale, pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”),
certain SVAC Class A Ordinary Shares and other equity securities of SVAC that are held by the parties thereto from time to time. Additionally,
the A&R Registration Rights Agreement will (a) modify the up-to-one year lock-up previously set forth in the side letter dated January
5, 2021 between SVAC and Sponsor to provide that 3,004375 SVAC Class A Ordinary shares issuable upon the conversion of the Founder Shares
(as defined in the A&R Registration Rights Agreement) shall be released at the Company Exchange Effective Time (b) provide for a lock-up
of the SVAC Class A Ordinary shares issuable to certain principal Company Stockholders (as defined in the A&R Registration Rights
Agreement) in the Company Exchange ending on the earlier of (i) six months from the closing date of the business combination, (ii) the
first date that the closing price of the SVAC Class A Ordinary Shares equals or exceeds $12.00 per share for any 20 trading days within
any 30-trading-day period commencing at least 90 days after the closing date of the business combination and (iii) the date on which SVAC
completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction, provided, that half of the shares
issued to one principal Prime Focus World Stockholder will be released at the Company Exchange Effective Time and (c) provide for a lock-up
of the SVAC Class A Ordinary Shares issuable to certain parties affiliated with Prime Focus World ending on the earlier of (i) with respect
to 25% of the SVAC Class A Ordinary Shares held by such parties, six months from the closing date of the business combination, (ii) with
respect to the remaining 75% of the SVAC Class A Ordinary Shares held by such parties, two years from the closing date of the business
combination and (iii) the date on which SVAC completes a liquidation, merger, capital stock exchange, reorganization or other similar
transaction.
Sponsor Support Agreement
On January 25, 2022, SVAC,
Prime Focus World and the Sponsor entered into the Sponsor Support Agreement (the “Sponsor Support Agreement”), pursuant
to which, among other things, the Sponsor agreed to (i) vote in favor of the Business Combination Agreement and the transactions contemplated
thereby, (ii) retain and not redeem its holdings in SVAC prior to the Closing, (iii) waive its anti-dilution rights, and (iv) deliver
the A&R Registration Rights Agreement in connection with the Closing, but conditioned upon Closing, in each case, on the terms and
subject to the conditions set forth in the Sponsor Support Agreement.
Backstop Agreement
On January 25, 2022, SVAC, Prime Focus World and Sponsor entered into
the Backstop Agreement (the “Backstop Agreement”), pursuant to which, among
other things, Sponsor has committed to utilize Sponsor’s reasonable commercial efforts to consummate the Common Equity Financing
(as defined in the Business Combination Agreement) and committed to purchase SVAC Class A Ordinary Shares in the Backstop Subscription
(as defined in the Business Combination Agreement) at the Closing Stock Price (as defined in the Business Combination Agreement) solely
for purposes of consummating the transactions contemplated hereby in an aggregate amount up to $350,000,000 less the commitments received
from PIPE Investors, conditioned upon Closing on the terms and subject to the conditions set forth in the Backstop Agreement.
Stockholder Support and PFL Agreements
Within five (5) business
days following the date of the Business Combination Agreement, Prime Focus World shall (i) use its commercially reasonable efforts to
obtain from each of its stockholders duly executed and delivered Stockholder Support Agreements (“Stockholder Support Agreements”),
pursuant to which, among other things, the Prime Focus World Stockholders will agree to effectuate the transactions contemplated by the
Business Combination Agreement, conditioned upon Closing on the terms and subject to the conditions set forth in the Stockholder Support
Agreements and (ii) obtain from Prime Focus Limited the PFL Agreement (the “PFL Agreement”), pursuant to which, among
other things, provides for four-year non-competition and non-solicitation restrictions on Prime Focus Limited and certain affiliates with
respect to Prime Focus World.
Subscription Agreements
On January 25, 2022, concurrently
with the execution of the Business Combination Agreement, SVAC entered into subscription agreements (the “Subscription Agreements”)
on substantially two forms, each filed herewith as Exhibit 10.3 and Exhibit 10.4, respectively, with certain institutional and private
investors (collectively, the “PIPE Investors”), pursuant to, and on the terms and subject to the conditions of which,
the PIPE Investors have collectively subscribed at a purchase price of $10.00 per share and $168,000,000 million in the aggregate for
16,800,000 million shares of SVAC Class A Ordinary Shares (the “PIPE Investment”). In addition SVAC is continuing discussions
with certain other potential private investors. The PIPE Investment will be consummated substantially concurrently with the Closing.
The Subscription Agreements
for the PIPE Investors provide for certain registration rights. In particular, SVAC is required to file a re-sale registration statement
no later than 30 calendar days following the Closing. Additionally, SVAC is required to use its commercially reasonable efforts to have
the registration statement declared effective as of the 90th calendar day following the Closing after the filing thereof, but
no later than the earlier of (i) the 135th calendar day following the Closing if the SEC notifies SVAC that it will “review”
the registration statement and (ii) the 10th business day after the date SVAC is notified (orally or in writing, whichever
is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review. SVAC
must use commercially reasonable efforts to keep the registration statement effective until the earliest of: (i) the date that such PIPE
Investor ceases to hold any Registrable Securities (as defined in the Subscription Agreements), (ii) the date all Registrable Securities
held by such PIPE Investor may be sold without restriction under Rule 144, including without limitation, any volume and manner of sale
restrictions which may be applicable to affiliates under Rule 144 and without the requirement for SVAC to be in compliance with the current
public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), (iii) the date that all Registrable Securities held
by such PIPE Investor may be sold pursuant to another exemption from registration and (iv) two years from the effective date of the registration
statement.
The Subscription Agreements
will terminate with no further force and effect upon the earliest to occur of: (i) such date and time as the Business Combination
Agreement is terminated in accordance with its terms, (ii) the mutual written agreement of the parties to such Subscription Agreement
and Prime Focus World, and (iii) at PIPE Investor’s election, on the End Date, if the Closing has not occurred on or before such
date.
The foregoing description
of the Business Combination Agreement, form of the A&R Registration Rights Agreement, the Sponsor Support Agreement, the Backstop
Agreement, the Stockholder Support Agreements, the PFL Agreement and the Subscription Agreements, and the transactions and documents contemplated
thereby, is not complete and is subject to and qualified in its entirety by reference to the Business Combination Agreement and all exhibits
thereto, the Sponsor Support Agreement, the Backstop Agreement, and the Subscription Agreements, copies of which are filed with this Current
Report on Form 8-K, and the terms of which are incorporated by reference herein.
The Business Combination
Agreement, the Sponsor Support Agreement, the Backstop Agreement and the Subscription Agreements have been included to provide investors
with information regarding its terms. They are not intended to provide any other factual information about SVAC or its affiliates. The
representations, warranties, covenants and agreements contained in the Business Combination Agreement, the Sponsor Support Agreement,
the Backstop Agreement, the Subscription Agreements and the other documents related thereto were made only for purposes of the Business
Combination Agreement as of the specific dates therein, were solely for the benefit of the parties to the Business Combination Agreement,
the Sponsor Support Agreement and the Subscription Agreements, as applicable, and 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, the Sponsor Support Agreement, the Backstop Agreement or the Subscription Agreements, as applicable,
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 Business Combination Agreement, the Sponsor
Support Agreement, the Backstop Agreement or the Subscription Agreements 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 Business Combination Agreement, the Sponsor Support Agreement, the Backstop Agreement or the Subscription
Agreements, as applicable, which subsequent information may or may not be fully reflected in SVAC’s public disclosures.