Rockley Photonics Holdings Ltd (Form: 10-Q, Received: 08/16/2021 16:32:50)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-40735

Rockley Photonics Holdings Limited

(Exact name of registrant as specified in its charter)

Cayman Islands

Not Applicable

(State or other jurisdiction

of incorporation)

(I.R.S. Employer

Identification No.)

3rd Floor 1 Ashley Road

Altrincham, Chesire

United Kingdom, WA14 2DT

+44 (0) 1865 292017

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, $ 0.000004026575398 par value per share	RKLY	New York Stock Exchange
Warrants, each whole warrant exercisable for one ordinary share at an exercise price of $11.50 per share	RKLY.W	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

The registrant had outstanding126,256,257 shares of ordinary shares as of August 12, 2021.

TABLE OF CONTENTS


		Page
Cautionary Statement Regarding Forward-Looking Statements			2

Risk Factors Summary			4

PART I - FINANCIAL INFORMATION			6

Item 1.	Financial Statements (Unaudited)		6

	Rockley Photonics Holdings Limited		6

	Condensed Balance Sheets		6

	Notes to Condensed Financial Statements		7

	Rockley Photonics Limited		8

	Condensed Consolidated Balance Sheets		8

	Condensed Consolidated Statements of Operations and Comprehensive Loss		9

	Condensed Consolidated Statements of Shareholders’ Equity		10

	Condensed Consolidated Statements of Cash Flows		11

	Notes to Condensed Consolidated Financial Statements		12

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		32

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		48

Item 4.	Controls and Procedures		48

PART II - OTHER INFORMATION			50

Item 1.	Legal Proceedings		50

Item 1A.	Risk Factors		50

Item 6.	Exhibits		79

Signatures			81

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding Rockley Photonics Holdings Limited’s (the “Company”) future expectations, beliefs, plans, prospects, objectives, and assumptions regarding future events or performance, as well as the Company’s strategies, future operations, financial position, and estimated future financial results and anticipated costs. The words “anticipate,” “believe,” “continue,” “could,” “enable,” “estimate,” “eventual,” “expect,” “future,” “intend,” “may,” “might,” “opportunity,” “outlook,” “plan,” “possible,” “position,” “potential,” “predict,” “project,” “revolutionize,” “seem,” “should,” “trend,” “will,” “would,” and other terms that predict or indicate future events, trends, or expectations, and similar expressions or the negative of such expressions may identify forward-looking statements, but the absence of these words or terms does not mean that a statement is not forward-looking.

The forward-looking statements contained in this Quarterly Report are based on information available as of the date of this Quarterly Report, and current expectations, forecasts, and assumptions, (whether or not identified herein), and involve a number of risks and uncertainties. Accordingly, forward-looking statements in this Quarterly Report should not be relied upon as representing the Company’s views as of any subsequent date, and the Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Forward-looking statements are subject to several risks and uncertainties (many of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following:

•

the Company’s ability to achieve commercial production of its products and technology, including in a timely and cost-effective manner;

•

the Company’s ability to achieve customer design wins, convert memoranda of understanding and development contracts into production contracts, and achieve customer acceptance of its products and technology;

•

risks related to purchase orders, including the lack of long-term purchase commitments, the cancellation, reduction, delay, or other changes in customer purchase orders, and if and to the extent customers seek to enter into licensing arrangements in lieu of purchases;

•

the Company’s history of losses and need for additional capital and its ability to access additional financing to support its operations and execute on its business plan, as well as the risks associated with any future financings;

•

legal and regulatory risks, including those related to its products and technology and any threatened or actual litigation;

•

risks associated with its fabless manufacturing model and dependency on third-party suppliers;

•

the Company’s reliance on a few significant customers for a majority of its revenue and its ability to expand and diversify its customer base;

•

the Company’s financial performance;

•

the impacts of COVID-19 on the Company, its customers and suppliers, its target markets, and the economy;

•

the Company’s ability to successfully manage growth and its operations as a public company;

•

fluctuations in the Company’s stock price and the Company’s ability to maintain the listing of its ordinary shares on the NYSE;

•

the Company’s ability to anticipate and respond to industry trends and customer requirements;

•

changes in the Company’s current and future target markets;

•

intellectual property risks;

•

the Company’s ability to compete successfully;

•

market opportunity and market demand for, and acceptance of, the Company’s products and technology, as well as the customer products into which the Company’s products and technology are incorporated;

•

risks related to international operations;

•

risks related to cybersecurity, privacy, and infrastructure;

•

risks related to financial and accounting matters;

•

general economic, financial, legal, political, and business conditions and changes in domestic and foreign markets;

•

the Company’s ability to realize the anticipated benefits of the Business Combination (as defined herein) and costs associated with the Business Combination;

•

changes adversely affecting the businesses or markets in which the Company is engaged, and other factors described under the heading “Risk Factors” herein and in other documents the Company files with the Securities and Exchange Commission (the “SEC”) in the future.

RISK FACTOR SUMMARY

Risks Related to the Company’s Business and Industry; Customer-Related Risks

•

If the Company does not fully develop or commercialize its products and services, or if such products and services experience significant delays, the Company’s business, financial condition, and results of operation will be materially and adversely affected;

•

The Company has a history of recurring losses and a significant accumulated deficit, which raises substantial doubt about its ability to continue as a “going concern.” The Company expects to incur significant research and development expenses and devote substantial resources to commercializing new products, which could increase its losses and negatively impact its ability to achieve or maintain profitability;

•

If the end products into which the Company’s products are incorporated are not fully developed and commercialized or do not achieve widespread market acceptance, or if such products experience delays, cancellations, or reductions, or if the Company’s products are not selected for inclusion in its customers’ end products, are not adopted in other industry verticals or use cases, or are not adopted by leading consumer and medical device companies, the Company’s business will be materially and adversely affected;

•

The Company’s forecasts and projections are based upon assumptions, analyses, and internal estimates developed by the Company’s management. If these assumptions, analyses, or estimates prove to be incorrect or inaccurate, the Company’s actual operating results may differ materially from those forecasted or projected;

•

The Company expects its results of operations to fluctuate on a quarterly and annual basis, which could cause its share price to fluctuate or decline;

•

If the Company is unable to manage its growth or scale its operations, its business and operating results could be materially and adversely affected;

•

Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate;

•

The Company’s international operations expose it to operational, financial, and regulatory risks, which could harm the Company’s business;

•

The Company is susceptible to supply shortages, long lead times for components, and supply changes, any of which could disrupt its supply chain and could delay deliveries of its products to customers, which in turn could adversely affect the Company’s business, results of operations, and financial condition;

•

If the Company is unable to sell its products to its target customers, including large corporations with substantial negotiating power, or is unable to enter into agreements with customers and suppliers on satisfactory terms, its prospects and results of operations will be adversely affected;

•

The Company currently depends on a few large customers for a substantial portion of its revenue. The loss of, or a significant reduction in, orders from the Company’s customers, or the Company’s failure to diversify its customer base, could significantly reduce its revenue and adversely impact the Company’s operating results;

•

Because the Company does not anticipate long-term purchase commitments with its customers, orders may be cancelled, reduced, or rescheduled with little or no notice, which in turn exposes the Company to inventory risk, and may cause its business and results of operations to suffer; and

•

The Company’s business depends substantially on the efforts of its executive officers, including its Chief Executive Officer and founder, Dr. Andrew Rickman.

Regulatory, Intellectual Property, Infrastructure, Cybersecurity and Privacy Risks

•

The Company’s failure to comply with applicable governmental export and import control laws and regulations, including those related to the use, distribution, and sale of its products, U.S. Food and Drug Administration clearance or approval requirements, or privacy, data protection, and information security requirements in the jurisdictions in which the Company operates could materially harm its business and operating results;

•

The Company may not be able to adequately protect or enforce its intellectual property rights or prevent unauthorized parties from copying or reverse engineering its products or technology. Further, the Company’s intellectual property applications, including patent applications, may not be approved or granted;

•

A network or data security incident or disruption or performance issues with the Company’s network infrastructure could harm its brand, reputation, and business, as well as its operating results.

Risks Related to Financial and Accounting Matters

•

The Company’s failure to raise additional capital or generate the significant capital necessary to expand its operations could reduce its ability to compete and could harm its business;

•

In preparing the Company’s consolidated financial statements, the Company makes good faith estimates and judgments that may change or turn out to be erroneous, which could adversely affect the Company’s operating results.

Risks Related to Being a Public Company and General Risks

•

The requirements of being a public company may strain the Company’s resources, divert management’s attention, and affect its ability to attract and retain qualified board members;

•

The global COVID-19 pandemic could harm the Company’s business and results of operations.

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

ROCKLEY PHOTONICS HOLDINGS LIMITED

Condensed Balance Sheets

(in thousands)


	As of
	June 30, 2021		March 11, 2021
	(Unaudited)
Assets
Current assets
Receivable from affiliate	$	50	$	50

Total current assets		50		50

Total assets	$	50	$	50

Commitments and contingencies
Shareholder’s equity
Shareholder’s equity
Ordinary shares and additional paid-in capital (Note 2)	$	50	$	50

Total Shareholder’s equity		50		50

See accompanying notes to condensed consolidated financial statements.

Rockley Photonics Holdings Limited

Notes to Condensed Financial Statements

(Unaudited)

1.	Organization and Background

Rockley Photonics Holdings Limited (“Holdco”, “we”, “us”, or “our”) was incorporated in the Cayman Islands with limited liability on March 11, 2021.

As more fully described below, on August 11, 2021, Holdco completed a merger with SC Health Corporation and Rockley Photonics Limited (“Rockley”), with Rockley surviving the merger as a wholly-owned subsidiary of Holdco (the “Business Combination”). Immediately following the completion of the Business Combination and the related organizational transactions on August 11, 2021, Holdco received $168.0 million in gross proceeds. Rockley will operate, conduct and control all of the business and affairs of Holdco.

SC Health and the shareholders of Rockley hold approximately 1.4% and 82.4% ownership interest in Rockley Photonics Holdings Limited, respectively.

Basis of Presentation

Our balance sheets have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Statements of income, shareholders’ equity and cash flows have not been presented because, as of March 11, 2021 and through to June 30, 2021, we have not engaged in any business or other activities except in connection with our formation.

2.	Shareholder’s Equity

On March 11, 2021, upon formation of Holdco, our board of directors (the Rockley Photonics Holdings Limited Board) authorized the issuance of 1 ordinary share with an initial par value of $0.00001 per share, to Dr. Andrew Rickman, OBE. Rockley contributed additional paid-in capital of $50,000 at the formation of Holdco in contemplation of the organizational transactions discussed in sections below.

3.	Subsequent Events

Subsequent events have been evaluated through the date that these financial statements were issued.

In relation to the Business Combination, on July 22, 2021, Holdco’s Form S-4 Registration Statement received a Notice of Effectiveness from the SEC. On August 9, 2021, among other things, we proposed to the High Court of the United Kingdom a transfer scheme of arrangement under Part 26 of the Companies Act pursuant to which our shareholders exchanged all of Rockley Photonics Limited shares for Rockley Photonics Holdings Limited ordinary shares, at a conversion price of $10.00 per share. The transfer was conditional upon the approval of the Business Combination Agreement, the Business Combination and the Plan of Merger by SC Health shareholders. All items were approved on August 6, 2021.

The Business Combination was consummated on August 11, 2021 and Holdco became a publicly traded company listed on the New York Stock Exchange (“NYSE”) under the symbol “RKLY”. Subsequent to the consummation of the Business Combination, Rockley and its subsidiary entities became a wholly owned subsidiary of Holdco.

ROCKLEY PHOTONICS LIMITED

Condensed Consolidated Balance Sheets

(in thousands, except share amounts and par value)


	As of
	June 30, 2021			December 31, 2020
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	35,395		$	19,228
Accounts receivable, net of allowance for doubtful accounts of $377 and $0 as of June 30, 2021 and December 31, 2020, respectively		2,411			4,925
Other receivables		23,037			18,024
Prepaid expenses		7,724			1,605
Other current assets		258			609

Total current assets		68,825			44,391
Property, equipment, and finance lease right-of-use assets, net		8,170			6,182
Equity method investment		4,711			5,202
Intangible assets, net		3,048			3,048
Other non-current assets		11,715			1,607

Total assets	$	96,469		$	60,430

Liabilities and Shareholders’ Deficit
Current liabilities
Trade payables	$	8,692		$	4,413
Accrued expenses		12,104			10,395
Other current liabilities		1,020			998

Total current liabilities		21,816			15,806
Long-term debt		194,328			74,804
Other long-term liabilities		2,719			1,127

Total liabilities		218,863			91,737
Commitments and contingencies (Note 13)
Shareholders’ deficit
Ordinary shares, $0.00001 par value; 55,982,833 authorized as of June 30, 2021 and December 31, 2020; 33,825,620 and 33,637,762 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		—			—
Additional paid-in-capital		205,823			201,576
Accumulated deficit		(328,217	)		(232,883	)

Total Shareholders’ deficit		(122,394	)		(31,307	)

Total liabilities and Shareholders’ deficit	$	96,469		$	60,430

See accompanying notes to condensed consolidated financial statements.

ROCKLEY PHOTONICS LIMITED

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited and in thousands, except share and per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenue	$	2,195		$	7,881		$	3,966		$	14,544
Cost of revenue		4,549			6,522			8,283			13,085

Gross profit		(2,354	)		1,359			(4,317	)		1,459

Operating expenses:
Selling, general and administrative expenses		6,715			3,604			14,020			7,249
Research and development expenses		17,551			7,746			33,531			16,217

Total operating expenses		24,266			11,350			47,551			23,466

Loss from operations		(26,620	)		(9,991	)		(51,868	)		(22,007	)
Other income (expense):
Forgiveness of PPP loan		2,860			—			2,860			—
Interest expense, net		(179	)		(34	)		(326	)		(74	)
Equity method investment loss		(597	)		(102	)		(760	)		(252	)
Change in fair value of debt instruments		(6,008	)		312			(45,661	)		(2,222	)
Gain (loss) on foreign currency		97			(108	)		631			(1,654	)

Total other income (expense)		(3,827	)		68			(43,256	)		(4,202	)

Loss before income taxes		(30,447	)		(9,923	)		(95,124	)		(26,209	)
Provision for income tax		110			80			210			220

Net loss and comprehensive loss	$	(30,557	)	$	(10,003	)	$	(95,334	)	$	(26,429	)

Net loss per share:
Basic and diluted	$	(0.90	)	$	(0.30	)	$	(2.82	)	$	(0.79	)

Weighted-average shares outstanding:
Basic and diluted		33,922,973			33,625,899			33,850,070			33,554,441

See accompanying notes to condensed consolidated financial statements.

ROCKLEY PHOTONICS LIMITED

Condensed Consolidated Statements of Shareholders’ Deficit

(Unaudited and in thousands, except share amounts)


	Number of Ordinary Shares		Ordinary Shares and Additional Paid-in Capital		Accumulated Deficit			Total Shareholders’ Deficit
Balance, December 31, 2020		33,637,762		201,576		(232,883	)		(31,307	)
Net loss		—		—		(64,777	)		(64,777	)
Exercise of stock options		87,244		137		—			137
Exercise of warrants		23,278		—		—			—
Issuance of warrants		—		263		—			263
Stock-based compensation		—		1,725		—			1,725

Balance, March 31, 2021		33,748,284		203,701		(297,660	)		(93,959	)
Net loss		—		—		(30,557	)		(30,557	)
Exercise of stock options		77,336		146		—			146
Stock-based compensation		—		1,976		—			1,976

Balance, June 30, 2021		33,825,620		205,823		(328,217	)		(122,394	)


	Number of Ordinary Shares		Ordinary Shares and Additional Paid-in Capital			Accumulated Deficit			Total Shareholders’ Deficit
Balance, December 31, 2019		33,337,115	$	188,865		$	(152,606	)	$	36,259
Net loss		—		—			(16,426	)		(16,426	)
Exercise of stock options		3,730		20			—			20
Exercise of warrants		5,523		7			—			7
Stock-based compensation		—		1,644			—			1,644
Ordinary share issuance, net of issuance costs		147,432		2,087			—			2,087

Balance, March 31, 2020		33,493,800	$	192,623		$	(169,032	)	$	23,591
Net loss		—		—			(10,003	)		(10,003	)
Exercise of stock options		—		—			—			—
Exercise of warrants		—		—			—			—
Stock-based compensation		—		2,545			—			2,545
Ordinary share issuance, net of issuance costs		—		(126	)		—			(126	)

Balance, June 30, 2020		33,493,800	$	195,042		$	(179,035	)	$	16,007

See accompanying notes to condensed consolidated financial statements.

ROCKLEY PHOTONICS LIMITED

Condensed Consolidated Statements of Cash Flows

(Unaudited and in thousands)


	Six Months Ended June 30,
	2021			2020
Cash flows from operating activities:
Net loss	$	(95,334	)	$	(26,429	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of property, equipment and finance lease right-of-use assets	$	1,999		$	1,395
Gain on disposal of property and equipment	$	—		$	(98	)
Bad debt expense	$	377		$	—
Stock-based compensation	$	3,701		$	4,189
Change in equity-method investment	$	491		$	252
Change in fair value of debt instrument	$	45,661		$	2,222
Forgiveness of Paycheck Protection Program loan		(2,860	)		—
Changes in operating assets and liabilities:
Accounts receivable	$	2,137		$	(1,382	)
Other receivables	$	(5,013	)	$	8,602
Prepaid expenses and other current assets	$	(5,769	)	$	1,263
Other non-current assets	$	(1,733	)	$	357
Trade payables	$	(130	)	$	(4,347	)
Accrued expenses	$	402		$	1,708
Other current and long-term liabilities	$	1,614		$	(838	)

Net cash used in operating activities		(54,457	)		(13,106	)
Cash flows from investing activities:
Purchase of property and equipment		(2,822	)		(650	)
Payment for asset acquisition		(500	)		—
Investment in equity method investee		—			(2,500	)

Net cash used in investing activities		(3,322	)		(3,150	)
Cash flows from financing activities:
Proceeds from convertible loan notes		76,723			12,250
Principal payments on long-term debt		—			(1,952	)
Proceeds from issuance of ordinary shares, net of issuance costs		—			1,961
Proceeds from Paycheck Protection Program loan		—			2,860
Proceeds from exercise of options		283			20
Proceeds from the exercise of warrants		233			7
Proceeds from issuance of warrants		263			—
Debt issuance costs incurred		(3,556	)		—
Principal payments on finance lease		—			(1,231	)

Net cash provided by financing activities		73,946			13,915
Net increase (decrease) in cash and cash equivalents		16,167			(2,341	)
Cash and cash equivalents:
Beginning of period		19,228			20,904

End of period	$	35,395		$	18,563

See accompanying notes to condensed consolidated financial statements.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.	Description of Business and Significant Accounting Policies

Description of Business

Rockley Photonics Limited and its subsidiary entities (together, “we”, “us”, “our”, “Rockley” or, “the Company”) was founded in 2013 in the United Kingdom. We specialize in the research and development of integrated silicon photonics chipsets and have developed a versatile, application specific, third-generation silicon photonics platform specifically designed for the optical integration challenges facing numerous mega-trend markets. We have partnered with multiple tier-1 customers across the markets to deliver complex optical systems required for transformational sensor, communications, and medical product realization.

Basis of Presentation and Preparation

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company, and reflect all adjustments, consisting only of normal recurring adjustments, that are, in the opinion of management, necessary for the fair presentation of our financial position, results of operations, comprehensive income, cash flows and shareholders’ equity for the interim periods presented. The statements have been prepared in accordance with GAAP for interim financial information. Accordingly, these statements do not include all information and footnotes required by GAAP for annual consolidated financial statements, and should be read in conjunction with our audited consolidated financial statements and notes thereto in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2020 included in the Rockley Photonics Holdings Limited’s Registration Statement on Form S-4 (File No. 333-255019), which was declared effective by the SEC on July 22, 2021. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the operating results to be expected for the full fiscal year or future operating periods.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include, but are not limited to, revenue recognition, reserves and allowances; valuation of intangibles; product warranties; employee compensation and benefit accruals; stock-based compensation; loss contingencies; income taxes and fair value measurements. Actual results could differ materially from those estimates. Management’s estimates include, as applicable, the anticipated impacts of the COVID-19 pandemic.

Going Concern

The Company has incurred net losses since inception, has an accumulated deficit of $328.2 million as of June 30, 2021 and negative cash flow from operations of $54.5 million for the six months ended June 30, 2021 and expects to incur losses from operations for the foreseeable future. As of June 30, 2021, the Company had cash and cash equivalents of approximately $35.4 million. The Company’s ability to meet its obligations in the ordinary course of business is dependent on its ability to obtain additional financing. As a result, there is substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Our future liquidity needs, and ability to address those needs, will largely be determined by our ability to obtain additional financing on terms acceptable to us. We will continue to seek additional capital through the sale of debt or equity, or other arrangements, however, there can be no assurance that we will be able to raise additional capital when needed or under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to currently outstanding ordinary shares. Issued debt securities may contain covenants and limit our ability to pay dividends or make other distributions to shareholders. If we are unable to obtain additional financing, operations may be scaled back or discontinued.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Global Pandemic

The COVID-19 global pandemic has prompted extraordinary measures by governments and businesses to control the spread of COVID-19 in most or all regions throughout the world. These actions have included travel bans, quarantines, and similar mandates for individuals to substantially restrict normal activities and for businesses to curtail normal operations.

The COVID–19 pandemic has adversely impacted our operational efficiency and caused delays in operational activities. During the second quarter of 2021, we continue to take cautious steps to protect our workforce, support community efforts, and follow local government guidelines. Certain key laboratory employees and facilities have continued internal testing and laboratory work to the extent necessary to service customer commitments. The remaining non-essential workforce were recommended to continue performing their duties from home. The ongoing impact will depend on the duration of the pandemic which is being mitigated by the vaccination of the general population and gradual easing of restrictions.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. The Company adopted this guidance on January 1, 2020. The adoption of the guidance did not have a material impact on the condensed consolidated financial statements.

On June 16, 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“Topic 326”), requiring the measurement and recognition of expected credit losses for financial assets held at amortized cost, which include our accounts receivable and contract assets. The standard also requires that the Company recognizes credit impairment losses related to our available-for-sale debt securities through an allowance for credit losses instead of a reduction in the cost basis. The Company adopted this guidance on January 1, 2021. The adoption of the guidance did not have a material impact on the condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The Company adopted this guidance on January 1, 2021. The adoption of the guidance did not have a material impact on the condensed consolidated financial statements.

Accounting Pronouncements Issued but Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which affects general principles within Topic 740, and are meant to simplify and reduce the cost of accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and simplifies areas including franchise taxes that are partially based on income, transactions with a government that result in a step up in the tax basis of goodwill, the incremental approach for intraperiod tax allocation, interim period income tax accounting for year-to-date losses that exceed anticipated losses and enacted changes in tax laws in interim periods. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the condensed consolidated financial statements.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

2.	Revenue Recognition

Disaggregation of Revenue

The following table depicts the disaggregation of revenue by geography, consistent with how we evaluate its financial performance (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(Unaudited)				(Unaudited)
United States	$	2,195	$	5,423	$	3,966	$	12,086
Rest of World	$	—	$	2,458	$	—	$	2,458

Total revenue	$	2,195	$	7,881	$	3,966	$	14,544

Significant Customers

The following tables summarize our significant customers as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020:


	Revenue
	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
	(Unaudited)						(Unaudited)
Customer A		100	%		69	%		100	%		83	%
Customer B		—	%		31	%		—	%		17	%


	Accounts Receivable
	As of
	June 30, 2021			December 31, 2020
		(Unaudited)
Customer A		81	%		33	%
Customer B		17	%		67	%

3.	Equity Method Investment

As of June 30, 2021 and December 31, 2020, we held an investment in Hengtong Rockley Technology Co., Ltd (“HRT”) and we appointed two of the HRT’s five board members. HRT manufactures and sells optical fiber transceivers based on silicon photonics chipsets. HRT has share capital consisting solely of ordinary shares. We hold 24.9% of HRT’s ordinary shares, which is the same as the proportion of its voting rights. We consider HRT to be a variable interest entity upon which the Company does exercise significant influence, but the Company concluded it does not control the investment. Accordingly, the investment in HRT is accounted for under the equity method. We elected to use a three-month lag to record our share of HRT’s results. See Note 11, Related Party Transactions for details on the Company’s transactions with HRT.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table summarizes our investment in HRT for the six months ended June 30, 2021 (in thousands):


	June 30, 2021
	(Unaudited)
Beginning balance	$	5,202
Investment in HRT		—
Remeasurement gain on HRT		269
Share of loss of HRT		(760	)

Ending balance	$	4,711

Our maximum exposure to loss as a result of our involvement with HRT is limited to the balance of our investment.

4.	Fair Value Measurements

Our financial assets are considered Level 1 in the fair value hierarchy and measured at fair value, were as follows (in thousands):


	As of
	June 30, 2021		December 31, 2020
	(Unaudited)
Assets
Cash equivalents:

Money market funds	$	11,316	$	11,516

All of our financial liabilities are considered Level 3 in the fair value hierarchy, where inputs to the valuation techniques used to measure fair value were considered unobservable. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgements and consider factors specific to the liability.

The financial liabilities subject to fair value measurement on a recurring basis, were as follows (in thousands):


	As of
	June 30, 2021		December 31, 2020
	(Unaudited)
Financial Liabilities
3.00% – 2020 Convertible Notes	$	36,214	$	32,106
8.00% – 2020 Convertible Notes		17,038		14,789
2020 Term Facility Loan		39,970		25,049
5.00% – $50.0 Million Convertible Notes		11,220		—
5.00% – $25.0 Million Convertible Notes		43,070		—
5.00% – $30.0 Million Convertible Notes		46,816		—

Total financial liabilities	$	194,328	$	71,944

Changes in the fair value of debt that is accounted for at fair value are presented as gains or losses in the condensed consolidated statements of operations and comprehensive loss under Change in Fair Value of Debt Instruments.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

3.00% – 2020 Convertible Notes

On March 9, 2020, we issued $21.3 million of 3.00% Convertible Notes and elected the fair value option of accounting for this debt instrument (see Note 6, Long Term Debt for details). At June 30, 2021, the contractual outstanding principal of the 3.00% Convertible Notes Due 2025 was $21.3 million and the fair value was $36.2 million. As of June 30, 2021, we measured fair value using a binomial lattice model (which is discussed in further detail below) with the following significant inputs:


Fair Value per share of ordinary shares	$	24.70
Risk-free interest rate		0.03	%
Expected volatility		55	%
Expected term, in years		0.10
Discount yield		48.45	%
Conversion price discount		25	%

We recorded a loss of $1.1 million and $4.1 million for the three and six months ended June 30, 2021, respectively from a change in fair value of debt in connection with the subsequent fair value remeasurement of the 3.00% Convertible Notes, as follows (in thousands):


Fair value at December 31, 2020	$	32,106
Plus: Loss from change in fair value	$	4,108

Fair value at June 30, 2021	$	36,214

A binomial lattice model was used to determine the fair value of the 3.00% Convertible Notes Due 2025 based on assumptions as to when these would be converted or redeemed at each decision point. Within the lattice model, the following assumptions were made: (i) upon IPO/Sale/Merger/SPAC or maturity, the convertible notes may be converted to ordinary shares or redeemed at principal and accrued interest; and (ii) upon qualified financing event, the convertible notes will automatically convert to ordinary shares. The lattice model uses the stock price, conversion price, maturity date, risk-free rate, estimated stock volatility and estimated credit spread. We remeasure the fair value of the debt instrument and record a change as a gain or loss in the statements of operations and comprehensive loss for each reporting period.

8.00% – 2020 Convertible Notes

On February 19, 2020, we issued $8.0 million of 8.00% Convertible Notes and elected the fair value option of accounting for this debt instrument (see Note 6, Long Term Debt for details). At June 30, 2021, the contractual outstanding principal of the 8.00% Convertible Notes Due 2027 was $8.0 million and the fair value was $17.0 million (including embedded warrants). As of June 30, 2021, we measured fair value using a binomial lattice model (which is discussed in further detail below) with the following significant inputs:


Fair Value per share of ordinary shares	$	24.70
Risk-free interest rate		0.03	%
Expected volatility		55	%
Expected term, in years		0.10
Discount yield		35	%
Conversion price discount		40	%

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

We recorded a loss of $0.5 million and $2.2 million for the three and six months ended June 30, 2021, respectively from a change in fair value of debt in connection with the subsequent fair value remeasurement of the 8.0% Convertible Notes, as follows (in thousands):


Fair value at December 31, 2020	$	14,789
Plus: Loss from change in fair value	$	2,249

Fair value at June 30, 2021	$	17,038

A binomial lattice model was used to determine the fair value of the 8.00% Convertible Notes Due 2025 based on assumptions as to when these would be converted or redeemed at each decision point. Within the lattice model, the following assumptions were made: (i) upon IPO/Sale/Merger/SPAC or maturity, the convertible notes may be converted to ordinary shares or put at 125% of principal and accrued interest; and (ii) upon financing event, the convertible notes may be converted to ordinary shares. We remeasure the fair value of the debt instrument and record a change as a gain or loss from in the statements of operations and comprehensive loss for each reporting period.

We issued liability classified warrants in conjunction with the issuance of the 8.00% Convertible Notes. The fair value of these warrants is embedded within the fair value of the 8.00% Convertible Notes presented in the table above.

2020 Term Facility Loan

On September 29, 2020, we issued $35.0 million of convertible notes and elected the fair value option of accounting for this debt instrument (see Note 6, Long Term Debt for details). At June 30, 2021, the contractual outstanding principal of the 2020 Term Facility Loan was $33.9 million and the fair value was $40.0 million. As of June 30, 2021, we measured fair value using a binomial lattice model and discounted cash flow approach for various exit event scenario, with the following significant inputs:


Fair Value per share of ordinary shares	$	24.70
Risk-free interest rate		0.03	%
Expected volatility		55	%
Expected term, in years		0.10
Discount yield		35	%

We recorded a loss of $1.2 million and $14.9 million for the three and six months ended June 30, 2021, respectively from a change in fair value of debt in connection with the subsequent fair value remeasurement of 2020 Term Facility Loan, as follows (in thousands):


Fair value at December 31, 2020	$	25,049
Plus: Loss from change in fair value	$	14,921

Fair value at June 30, 2021	$	39,970

A binomial lattice model was used to determine the fair value of the 2020 Term Facility Loan based on assumptions as to when these would be converted upon IPO/Sale/Merger/SPAC. Upon such event, the convertible notes will be paid off as following: (i) if par value exit, repayment of base multiple times principal plus unpaid interest; (ii) if greater value exit, repayment of base multiple plus add-on multiple ratio times principal plus unpaid interest.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

5.00% – $50.0 Million Convertible Notes

On January 11, 2021, we issued $50.0 million of 5.00% – $50.0 Million Convertible Notes and elected the fair value option of accounting for this debt instrument (see Note 6, Long Term Debt for details). At June 30, 2021, the contractual outstanding principal of the 5.00% – $50.0 Million Convertible Notes Due 2026 was $10.3 million and the fair value was $11.2 million. As of June 30, 2021, we measured fair value using a binomial lattice model (which is discussed in further detail below) with the following significant inputs:


Fair Value per share of ordinary shares	$	24.70
Risk-free interest rate		0.03	%
Expected volatility		55	%
Expected term, in years		0.10
Discount yield		48.4	%

We recorded a loss of $0.3 million and $0.9 million for the three and six months ended June 30, 2021, respectively from a change in fair value of debt in connection with the subsequent fair value remeasurement of 5.00%– $50.0 Million Convertible Note, as follows (in thousands):


Fair value at January 11, 2021	$	10,274
Plus: Loss from change in fair value	$	946

Fair value at June 30, 2021	$	11,220

A binomial lattice model was used to determine the fair value of the 5.00% – $50.0 Million Convertible Notes Due 2026 based on assumptions as to when these would be converted or redeemed at each decision point. Within the lattice model, the following assumptions are made: (i) upon IPO/Sale/Merger/SPAC, the convertible notes may be converted to ordinary shares or put at principal and accrued interest; and (ii) upon qualified financing event or maturity, the convertible notes will automatically convert to ordinary shares at base price. The lattice model uses the stock price, conversion price, maturity date, risk-free rate, estimated stock volatility and estimated credit spread. We remeasure the fair value of the debt instrument and record the change as a gain or loss from a change as a gain or loss in the statements of operations and comprehensive loss for each reporting period.

5.00% – $25.0 Million Convertible Notes

On December 31, 2020, we issued $25.0 million of 5.00% – $25.0 Million Convertible Notes and elected the fair value option of accounting for this debt instrument (see Note 6, Long Term Debt for details). At June 30, 2021, the contractual outstanding principal of the 5.00% – $25.0 Million Convertible Notes Due 2025 was $25.0 million and the fair value was $43.1 million (including embedded warrants). As of June 30, 2021, we measured fair value using a binomial lattice model (which is discussed in further detail below) with the following significant inputs:


Fair Value per share of ordinary shares	$	24.70
Risk-free interest rate		0.03	%
Expected volatility		55	%
Expected term, in years		0.10
Discount yield		48.4	%

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

We recorded a loss of $1.3 million and $5.5 million for the three and six months ended June 30, 2021, respectively from a change in fair value of debt in connection with subsequent fair value remeasurement of the 5.00% – $25.0 Million Convertible Notes, as follows (in thousands):


Fair value at December 31, 2020	$	37,592
Plus: Loss from change in fair value	$	5,478

Fair value at June 30, 2021	$	43,070

A binomial lattice model was used to determine the fair value of the 5.00% – $25.0 Million Convertible Notes Due 2025 based on assumptions as to when these would be converted or redeemed at each decision point. Within the lattice model, the following assumptions were made: (i) upon SPAC, the convertible notes may be converted to ordinary shares or put at principal and accrued interest; (ii) upon qualified financing event, the convertible notes may be converted to ordinary shares with discount any time after financing date; and (iii) upon maturity, the convertible notes may converted to ordinary shares at $675.0 million divided by the number of fully diluted shares. We remeasure the fair value of the debt instrument and record a change as a gain or loss in the statements of operations and comprehensive loss for each reporting period.

We issued liability classified warrants in conjunction with the issuance of the 5.00% – $25.0 Million Convertible Notes. We evaluated the terms of these warrants and noted that under ASC 480, our potential obligation to settle the warrants only when the exercise of contingencies is met. Due to this provision, ASC 480 requires that the warrants are classified as liabilities and combined within the 5.00% – $25.0 Million Convertible Notes. The fair value of these warrants is embedded within the fair value of the 5.00% – $25.0 Million Convertible Notes presented in the table above.

5.00% – $30.0 Million Convertible Notes

On January 11, 2021, we issued $30.0 million of 5.00% Convertible Notes and elected the fair value option of accounting for this debt instrument (see Note 6, Long Term Debt for details). At June 30, 2021, the contractual outstanding principal of the 5.00% – $30.0 Million Convertible Notes Due 2026 was $30.0 million and the fair value was $46.8 million. As of June 30, 2021 we measured fair value using a binomial lattice model (which is discussed in further detail below) with the following significant inputs:


Fair Value per share of ordinary shares	$	24.70
Risk-free interest rate		0.03	%
Expected volatility		55	%
Expected term, in years		0.10
Discount yield		48.4	%

We recorded a loss of $1.4 million and $8.4 million for the three and six months ended June 30, 2021, respectively from a change in fair value of debt in connection with the subsequent fair value remeasurement of the 5.00% – $30.0 Million Convertible Notes, as follows (in thousands):


Fair value at January 11, 2021	$	38,403
Plus: Loss from change in fair value	$	8,413

Fair value at June 30, 2021	$	46,816

A binomial lattice model was used to determine the fair value of the 5.00% Convertible Notes Due 2026 based on assumptions as to when these would be converted or redeemed at each decision point. Within the lattice model, the following assumptions were made: (i) upon SPAC, the convertible notes may be converted to ordinary shares or put at principal and accrued interest; and (ii) upon qualified financing event or maturity, the convertible notes will automatically convert to ordinary shares at base price. The lattice model uses the stock price, conversion price, maturity date, risk-free rate, estimated stock volatility and estimated credit spread. We remeasure the fair value of the debt instrument and record a change as a gain or loss in the statements of operations and comprehensive loss for each reporting period.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

At June 30, 2021 and December 31, 2020, the carrying value of certain financial instruments, such as cash, accounts receivable, other receivable, prepaid expenses and other current assets, trade payable and other current accrued liabilities, approximate fair value due to their relatively short maturities and low market interest rates, if applicable.

5.	Balance Sheet Components

Cash and cash equivalents

Cash and cash equivalents balances were concentrated by location as follows:


	As of
	June 30, 2021			December 31, 2020
		(Unaudited)
United Kingdom		92	%		96	%
United States		7	%		3	%
Other		1	%		1	%

Other receivables (in thousands):


	As of
	June 30, 2021		December 31, 2020
	(Unaudited)
R&D tax credit receivable	$	21,911	$	17,412
Grants receivable		573		—
VAT receivable		549		607
Other receivable		4		5

Total other receivables	$	23,037	$	18,024

Property and equipment, net (in thousands):


	As of
	June 30, 2021			December 31, 2020
	(Unaudited)
Computer equipment	$	1,744		$	1,218
Lab equipment		10,081			7,607
Motor vehicles		31			31
Furniture and fixtures		265			265
Leasehold improvements		704			704
Assets under construction		561			27

Total property and equipment	$	13,386		$	9,852
Less: accumulated depreciation		(7,162	)		(5,802	)

Total property and equipment, net	$	6,224		$	4,050

Total depreciation expense for the three months ended June 30, 2021 and 2020 was $1.0 million and $0.6 million, respectively. Total depreciation expense for the six months ended June 30, 2021 and 2020 was $1.8 million and $1.2 million, respectively.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Finance lease right-of-use assets, net (in thousands):


	As of
	June 30, 2021			December 31, 2020
	(Unaudited)
Finance lease right-of-use assets	$	2,966		$	2,966
Less: accumulated amortization		(1,020	)		(834	)

Total finance lease right-of-use assets, net	$	1,946		$	2,132

Amortization expense for the three months ended June 30, 2021 and 2020 was $0.1 million and $0.1 million, respectively. Amortization expense for the six months ended June 30, 2021 and 2020 was $0.2 million and $0.2 million, respectively.

Intangible assets, net (in thousands):


	As of
	June 30, 2021		December 31, 2020
	(Unaudited)
In-process research and development	$	3,048	$	3,048
Total intangible assets, net	$	3,048	$	3,048

The Company reviews its intangible assets for potential impairment whenever events or circumstances indicate that the carrying value of the intangible assets may not be recoverable. No impairment charges were recorded for the three and six months ended June 30, 2021 and 2020.

Other non-current assets (in thousands):


	As of
	June 30, 2021		December 31, 2020
	(Unaudited)
Capitalized transaction costs	$	8,496	$	121
Operating right of use assets	$	3,219	$	1,486

Total other non-current assets	$	11,715	$	1,607

Capitalized transaction costs as of June 30, 2021 consist of capitalized professional fees related to accounting, legal and audit matters incurred by the Company, in connection with the Business Combination transaction.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Accrued expenses (in thousands):


	As of
	June 30, 2021		December 31, 2020
	(Unaudited)
Accrued bonus	$	2,926	$	3,349
Accrued payroll and benefits		2,191		1,524
Accrued taxes		75		332
Accrued fabrication costs		2,304		2,321
Share appreciation rights		741		706
Other accrued expenses		3,867		2,163

Total accrued expenses	$	12,104	$	10,395

6.	Long Term Debt

The following table summarizes information relating to our long-term debt, (in thousands):


	June 30, 2021
	(Unaudited)
	Principal		Fair Value Adjustment		Net
3.00% – 2020 Convertible Notes	$	21,281	$	14,933	$	36,214
8.00% – 2020 Convertible Notes		8,000		9,038		17,038
2020 Term Facility Loan		33,949		6,021		39,970
5.00% – $50.0 Million Convertible Notes		10,274		946		11,220
5.00% – $25.0 Million Convertible Notes		25,000		18,070		43,070
5.00% – $30.0 Million Convertible Notes		30,000		16,816		46,816

Total long-term debt	$	128,504	$	65,824	$	194,328
Less: current portion of long-term debt		—		—		—

Long-term debt, net of current portion	$	128,504	$	65,824	$	194,328


	December 31, 2020
	Principal		Fair Value Adjustment		Net
3.00% – 2020 Convertible Notes	$	21,281	$	10,825	$	32,106
8.00% – 2020 Convertible Notes		8,000		6,789		14,789
2020 Term Facility Loan		22,500		2,549		25,049
Paycheck Protection Program		2,860		—		2,860

Total long-term debt	$	54,641	$	20,163	$	74,804
Less: current portion of long-term debt		—		—		—

Long-term debt, net of current portion	$	54,641	$	20,163	$	74,804

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Future minimum payments under the debt agreements as of June 30, 2021 are as follows (in thousands):


	Convertible Notes
2021 (for the remaining period)	$	—
2022		—
2023		—
2024		—
2025		114,179
Thereafter		50,274

Total future minimum payments	$	164,453
Less: current portion of debt principal		—

Non-current portion of debt principal	$	164,453

3.00% – 2020 Convertible Notes

The discussion on the 3.00% – 2020 Convertible Notes is fully described in Note 7 of the “Notes to Consolidated Financial Statements” included in the Rockley Photonics Holdings Limited’s Registration Statement on Form S-4 (File No. 333-255019), filed with Securities and Exchange Commission (SEC) on May 28, 2021.

We accrued unpaid interest of $0.1 million and $0.3 million in the three and six months ended June 30, 2021, respectively. The accrued unpaid interest for the three and six months ended June 30, 2020 was immaterial.

For the three and six months ended June 30, 2021, we recorded a loss of $1.1 million and $4.1 million, respectively in the condensed consolidated statements of operations and comprehensive loss under Change in Fair Value of Debt Instruments. See Note 4, Fair Value Measurements for information about the assumptions used to measure the fair value of the 3.00% Convertible Notes as of June 30, 2021.

8.00% – 2020 Convertible Notes

The discussion on the 8.00% Convertible Notes is fully described in Note 7 of the “Notes to Consolidated Financial Statements” included in the Rockley Photonics Holdings Limited’s Registration Statement on Form S-4 (File No. 333-255019), filed with Securities and Exchange Commission (SEC) on May 28, 2021.

We accrued unpaid interest of $0.2 million and $0.3 million in the three and six months ended June 30, 2021, respectively. We accrued unpaid interest of $0.1 million and $0.2 million for the three and six months ended June 30, 2020, respectively.

For the three and six months ended June 30, 2021, we recorded a loss of $0.5 million and $2.2 million, respectively in the condensed consolidated statements of operations and comprehensive loss under Change in Fair Value of Debt Instruments. See Note 4, Fair Value Measurements for information about the assumptions used to measure the fair value of 8.00% Convertible Notes as of June 30, 2021.

2020 Term Facility Loan

The discussion on the 2020 Term Facility Loan is fully described in Note 7 of the “Notes to Consolidated Financial Statements” included in the Rockley Photonics Holdings Limited’s Registration Statement on Form S-4 (File No. 333-255019), filed with Securities and Exchange Commission (SEC) on May 28, 2021.

The Company paid interest of $0.2 million and $0.3 million in the three and six months ended June 30, 2021, respectively. As of June 30, 2021, the total amount borrowed was $33.9 million.

For the three and six months ended June 30, 2021, we recorded a loss of $1.2 million and $14.9 million, respectively in the condensed consolidated statements of operations and comprehensive loss under Change in Fair Value of Debt Instruments. See Note 4, Fair Value Measurements for information about the assumptions used to measure the fair value of 2020 Term Facility Loan as of June 30, 2021.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

On May 25, 2021, we entered into an amendment to the 2020 Term Facility Loan which modified the payment and maturity terms such that 30% of the outstanding principal was converted to ordinary shares of Rockley Photonics Holdings Limited at the closing of a business combination and merger with a SPAC and the remaining 70% will be repaid on or before August 31, 2022.

5.00% – $50.0 Million Convertible Notes

On January 11, 2021, we issued convertible loan notes for an aggregate principal amount of $50.0 million. The 5.00% – $50.0 Million Convertible Notes mature on the fifth anniversary date of the instrument and bear interest at a rate of 5.0% per annum. The 5.00% – $50.0 Million Convertible Notes contain no financial covenants. We accrued unpaid interest of $0.1 million and $0.3 million in the three and six months ended June 30, 2021, respectively. As of June 30, 2021, the total amount borrowed was $10.3 million. The 5.00% – $50.0 Million Convertible Notes are convertible as follows:

(a)

In the event of a qualified financing even with total proceeds raised not less than $25.0 million, the outstanding principal amount and any unpaid accrued interest shall automatically convert into the most senior class of share at a conversion price being lower of 15% discount to the per share subscription price of the equity shares or the price obtained by diving $1,500.0 million by fully diluted share capital of the Company at the date of conversion;

(b)

At an exit event, redeem the outstanding principal amount and any unpaid accrued interest on the original principal or convert the outstanding principal amount of all notes and any unpaid accrued interest into the most senior class of share of the Company at a conversion price equal to the lower of 15% discount to the price per share and the price obtained by dividing $1,500.0 million by fully diluted share capital of the Company at the date of conversion;

(c)

At the maturity date, convert into the most senior class of shares at a conversion price by dividing $1,500.0 million by fully diluted share capital of the Company at the date of conversion.

We elected to account for the 5.00% – $50.0 Million Convertible Notes at fair value as of the issuance date. Management believes that the fair value option better reflects the underlying economics of the 5.0% – $50.0 Million Convertible Notes. Under the fair value election, changes in fair value are reported in the condensed consolidated statements of operations and comprehensive loss under Change in Fair Value of Debt Instruments. For the three and six months ended June 30, 2021, we recorded a loss of $0.3 million and $0.9 million, respectively. See Note 4, Fair Value Measurements for information about the assumptions we used to measure the fair value of the 5.00% – $50.0 Million Convertible Notes.

5.00% – $25.0 Million Convertible Notes

On December 31, 2020, we issued convertible loan notes in an aggregate principal amount of $25.0 million. The 5.00% – $25.0 Million Convertible Notes mature on the fifth anniversary date of the instrument and bear interest at a rate of 5.0% per annum. The 5.00% – $25.0 Million Convertible Notes contain no financial covenants. We accrued unpaid interest of $0.3 million and $0.6 million in the three and six months ended June 30, 2021. The 5.00% – $25.0 Million Convertible Notes were convertible as follows:

(a)

In an equity qualified financing event with total proceeds raised not less than $25.0 million, the outstanding principal amount and any unpaid accrued interest shall automatically convert into the most senior class of share at a conversion price being lower of 25% discount to the per share subscription price of the equity shares or the price obtained by diving $800.0 million by fully diluted share capital of the Company at the date of conversion;

(b)

At an exit event, redeem the outstanding notes for an amount equal to 100% of the outstanding principal plus accrued interest or convert the outstanding principal amount into the most senior class of share of the Company, at a conversion price equal to the lower of 25% discount to the price per share and the price obtained by dividing $800.0 million by fully diluted share capital of the Company at the date of conversion; or

(c)

At the maturity date, convert into the most senior class of shares at a conversion price by dividing $675.0 million by the number of issued shares in the capital of the Company on a fully diluted basis or repay the amount equal to 100% of the outstanding principal amount plus any accrued interest.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

We elected to account for the 5.00% – $25.0 Million Convertible Notes at fair value as of the issuance date. Management believes that the fair value option better reflects the underlying economics of the 5.00% – $25.0 Million Convertible Notes. Under the fair value election, changes in fair value are reported in the condensed consolidated statements of operations and comprehensive loss under Change in Fair Value of Debt Instruments. For the three and six months ended June 30, 2021, we recorded a loss of $1.3 million and $5.5 million, respectively. See Note 4, Fair Value Measurements for information about the assumptions we used to measure the fair value of 5.00% – $25.0 Million Convertible Notes.

In conjunction with the 5.00% – $25.0 Million Convertible Notes, we also issued the holder 278,775 warrants (“5.0% Investor Warrants”) which are convertible into ordinary shares of the Company. The warrants have an exercise price of $0.00001 per share and will only become exercisable upon the specified conversion event. The number of shares that the warrants will convert into varies depending on the type of conversion event. The value of the warrants is embedded within the 5.00% – $25.0 Million Convertible Notes.

5.00% – $30.0 Million Convertible Notes

On January 11, 2021, we issued convertible loan notes in an aggregate principal amount of $30.0 million (the “5.00% – $30.0 Million Convertible Notes”). The 5.00% – $30.0 Million Convertible Notes mature on the fifth anniversary date of the instrument and bear interest at a rate of 5.0% per annum. The 5.00% – $30.0 Million Convertible Notes contain no financial covenants. We accrued unpaid interest of $0.4 million and $0.7 million in the three and six months ended June 30, 2021, respectively. The 5.00% – $30.0 Million Convertible Notes were convertible as follows:

(a)

(b)

At an exit event, redeem the outstanding notes for an amount equal to the outstanding principal plus any unpaid accrued interest or convert the outstanding principal amount of all notes and any unpaid accrued interest into the most senior class of share of the Company, at a conversion price equal to the lower of a 25% discount to the price per share and the price obtained by dividing $800.0 million by fully diluted share capital of the Company at the date of conversion; or

(c)

At the maturity date, convert into the most senior class of shares at a conversion price by dividing $800.0 million by fully diluted share capital of the Company at the date of conversion.

We elected to account for the 5.00% – $30.0 Million Convertible Notes at fair value as of the issuance date. Management believes that the fair value option better reflects the underlying economics of the 5.00% – $30.0 Million Convertible Notes. Under the fair value election, changes in fair value are reported in the condensed consolidated statements of operations and comprehensive loss under Change in Fair Value of Debt Instruments. For the three and six months ended June 30, 2021, we recorded a loss of $1.4 million and $8.4 million, respective. See Note 4, Fair Value Measurements for information about the assumptions we used to measure the fair value of the 5.00%– $30.0 Million Convertible Notes.

Paycheck Protection Program

The discussion on paycheck protection program is fully described in Note 7 of the “Notes to Consolidated Financial Statements” included in the Rockley Photonics Holdings Limited’s Registration Statement on Form S-4 (File No. 333-255019), filed with Securities and Exchange Commission (SEC) on May 28, 2021.

During June 2021, the $2.9 million of borrowings outstanding under the Paycheck Protection Program (“PPP”) Loan was forgiven in full. Forgiveness income is recorded as a component of other income, net in the condensed consolidated statements of operations and comprehensive loss.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

7.	Income Taxes

Income tax expense was $0.1 million in both the three months ended June 30, 2021 and 2020. Income tax expense was $0.2 million in both the six months ended June 30, 2021 and 2020. The effective income tax rate was less than 1.0% in the three and six months ended June 30, 2021 and 2020. Our effective tax rate differs from the U.K. statutory rate primarily due to a substantially full valuation allowance against our net deferred tax assets where it is more likely than not that some or all of the deferred tax assets will not be realized. The income tax expense is primarily related to corporate income taxes in the United States, which operates on a cost–plus arrangements and minimum filing fees in the foreign jurisdictions where we have operations.

8.	Ordinary Shares

Ordinary shares have no liquidation preferences and entitle holders to one vote per share. Ordinary shareholders are entitled to receive non-cumulative dividends, when and if declared by our Board of Directors.

9.	Earnings per Share

The following is a calculation of basic and diluted net loss per share (in thousands, except for share and per share amounts):


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
	(Unaudited)						(Unaudited)
Basic and diluted:
Net loss	$	(30,557	)	$	(10,003	)	$	(95,334	)	$	(26,429	)
Weighted average ordinary shares outstanding		33,922,973			33,625,899			33,850,070			33,554,441

Basic and diluted net loss per share	$	(0.90	)	$	(0.30	)	$	(2.82	)	$	(0.79	)

Basic net loss per share is calculated by dividing net loss for the period by the weighted average number of the ordinary shares outstanding plus 108,821 and 132,099 outstanding warrants for the three months ended June 30, 2021 and 2020 with a $0.01 exercise price.

For the three and six months ended June 30, 2021 and 2020, we excluded the potential effect of the following in the calculation of the diluted loss per share, as the effect would be anti-dilutive due to losses incurred:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(Unaudited)				(Unaudited)
Outstanding warrants, less outstanding warrants with a $0.01 exercise price	$	899,698	$	842,717		899,698		842,717
Outstanding options (including performance options)	$	6,700,277	$	6,412,668		6,700,277		6,412,668

		7,599,975		7,255,385		7,599,975		7,255,385

10.

Stock-Based Compensation

The Company has established a number of share-based incentive plans for current employees, directors and others, which include Share Appreciation Rights (“SARs”), 2013 Share Option Plan and Warrants.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Share Appreciation Rights

As of June 30, 2021 and December 31, 2020, the Company had recorded liabilities of $0.7 million and $0.7 million related to these SARs based on their fair value of $24.70 and $20.28 per share as of June 30, 2021 and December 31, 2020, respectively. The total expense that we recognized for the SARs in the condensed consolidated statements of operations and comprehensive loss under selling, general and administrative was immaterial for the three and six months ended June 30, 2021 and 2020, respectively.

2013 Share Option Plan

As of June 30, 2021, there were 11,458,989 shares authorized for issuance under the Plan, of which 3,088,276 shares were available for grant.

The following table summarizes the stock option activity related to the 2013 Share Option Plan:


	Number of Options Outstanding			Average Exercise Price Per Share		Remaining Contractual Life (Years)		Intrinsic Value
								(In thousands)
Balances as of December 31, 2020		7,207,044		$	4.94	$	6.75	$	110,552
Options granted		—		$	—
Options exercised		(164,580	)	$	1.72
Options forfeited		(331,068	)	$	10.30
Options expired		(11,119	)	$	6.66

Balances as of June 30, 2021		6,700,277		$	4.75	$	6.16	$	133,661

Options exercisable—June 30, 2021		4,989,774		$	3.56	$	5.31	$	105,483

The aggregated intrinsic value represents the difference between the exercise price and the fair value of ordinary shares. The weighted-average grant-date fair value of options granted during the six months ended June 30, 2021 was nil since no options were granted during the period.

Stock-based compensation expense for all equity arrangements is included in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(Unaudited)				(Unaudited)
Cost of revenue	$	363	$	870	$	631	$	1,341
Research and development		1,171		1,330		2,219		2,081
Selling, general and administrative		442		345		851		767

Total stock-based compensation expense	$	1,976	$	2,545	$	3,701	$	4,189

As of June 30, 2021, total unrecognized compensation expense related to unvested options granted to employees under the Company’s stock option plan was $11.9 million, which is expected to be recognized over a weighted average period of 1.2 years.

Performance Options

For the three months ended June 30, 2021 and 2020, we recognized a total expense of $0.1 million and $0.02 million in relation to the performance-based options. For the six months ended June 30, 2021 and 2020, we recognized a total expense of $0.2 million and $0.1 million. As of June 30, 2021 and December 31, 2020, there were approximately $1.0 million and $1.2 million of unrecognized stock-based compensation expense related to the performance-based options. During the six months ended June 30, 2021, no additional performance-based options were granted.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Warrants

The following table summarizes information related to our outstanding warrants. Investor Warrants in connection with the 8.00% – 2020 Convertible Notes and 5.00% – $25.0 Million Convertible Notes were excluded from the below table as they are classified as liabilities.


	Number of Warrants Outstanding			Weighted- Average Exercise Per Shares		Weighted- Average Contractual Life (Years)
Balances as of December 31, 2020		1,013,103		$	7.33	$	6.45
Warrants issued		18,694		$	18.16
Warrants exercised		(23,278	)	$	0.00

Balances as of June 30, 2021		1,008,519		$	7.70	$	5.78

11.

Related Party Transactions

The Company formed HRT, a joint venture with Hengtong Optic-Electric Co., Ltd. in 2017, which was recognized by the Company as an equity method investment. During the three and six months ended June 30, 2021, we made no sales to HRT. During the three and six months ended June 30, 2020, we made sales to HRT of $2.5 million. As of June 30, 2021 and December 31, 2020, the balance owed by the joint venture amounted to $0.4 million and $3.3 million, respectively, and is included in accounts receivable in the accompanying balance sheets. As of June 30, 2021, there was no balance owed to the joint venture.

The Company engages two affiliate entities of the Company’s directors for consulting and administrative services. The fees incurred for these services were immaterial for the three and six months ended June 30, 2021 and 2020. As of June 30, 2020 and December 31, 2020, the amounts included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets were not considered material.

12.

Leases

The weighted average remaining lease term was 3 years for operating leases as of June 30, 2021. The weighted average discount rate was 6% for operating leases as of June 30, 2021.

Finance lease costs were immaterial for the three and six months ended June 30, 2021 and 2020. The components of operating lease cost for the three and six months ended June 30, 2021 and 2020, were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(Unaudited)				(Unaudited)
Operating Lease Cost:
Fixed lease cost	$	292		213	$	505		426
Variable lease cost		36		81		119		121

Total operating lease cost	$	328	$	294	$	624	$	547

The supplemental cash flow information related to our operating leases is as follows (in thousands):

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)


	Six Months Ended June 30,
	2021		2020
Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	462	$	454

Operating cash flows for finance leases	$	—	$	12

Financing cash flows for finance leases	$	—	$	933

Right-of-use assets obtained in exchange of lease obligations:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2,187	$	—

There are no finance lease liabilities as of June 30, 2021. Maturities of operating lease liabilities as of June 30, 2021, are as follows (in thousands):


	Operating Leases
2021 (for the remaining period)	$	582
2022		1,239
2023		931
2024		437
2025		327
Thereafter		394

Total lease obligation	$	3,910
Less: Imputed interest		(408	)

Total lease liabilities	$	3,502
Less: Current lease liabilities		(1,020	)

Total non-current lease liabilities	$	2,482

13.

Commitments and Contingencies

Legal Contingencies

From time to time, we are a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. We apply accounting for contingencies to determine when and how much to accrue for and disclose related to legal and other contingencies. Accordingly, we disclose contingencies deemed to be reasonably possible and accrue loss contingencies when, in consultation with legal advisors, it is concluded that a loss is probable and reasonably estimable. Although the ultimate aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance, management believes that as of June 30, 2021 there are no litigations pending that could have, individually and in the aggregate, a material adverse effect on our financial position, results of operations or cash flows.

Financial Commitments

In the ordinary course of business, we make commitments to third-party suppliers for various research and development activities. As of June 30, 2021 and December 31, 2020, we had $8.1 million and $3.0 million, respectively, in contractual obligations for which we have not yet received the services.

14.

Defined Contribution Plan

We have defined contribution plans, under which we contribute based on a percentage of the employees’ elected contributions. We will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized within selling, general and administrative expenses and research and

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

development in the condensed consolidated statements of operations and comprehensive loss. Defined contributions were $0.2 million and $0.1 million for the three months ended June 30, 2021 and 2020, respectively. Defined contributions were $0.4 million and $0.3 million for the six months ended June 30, 2021 and 2020, respectively.

15.

Supplemental Cash Flow Information

Non-cash operating, investing, and financing activities, and supplemental cash flow information are as follows (in thousands):


	Six Months Ended June 30,
	2021			2020
	(Unaudited)
Supplemental Cash Flow Information:
Interest paid	$	271		$	45
Income tax paid	$	210		$	80
Non-cash Operating Activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2,187		$	—

	$	2,187			0

Non-cash Investing Activities:
Unpaid property and equipment received	$	1,163		$	295

	$	1,163		$	295

Non-cash Financing Activities:
Unpaid deferred transaction costs	$	5,201		$	—

Forgiveness of Paycheck Protection Program loan		(2,860	)		—

	$	2,341		$	—

16. Subsequent Events

Subsequent events have been evaluated through the date that these financial statements were issued.

Rockley Photonics Holdings Limited (“Holdco”) was formed on March 11, 2021 for the purpose of effecting a merger or other similar business combination with one or more operating businesses. Holdco had neither engaged in any operations nor generated significant revenue through June 30, 2021.

On March 19, 2021, the Company entered into a definitive agreement to combine with SC Health Corporation (“SC Health”), a publicly traded special purpose acquisition company. The transaction resulted in Rockley becoming a publicly traded company.

On July 22, 2021, Rockley Photonics Holdings Limited’s Form S-4 Registration Statement received a Notice of Effectiveness from the Securities and Exchange Commission (“SEC”).

On August 9, 2021, among other things, we proposed to the High Court of the United Kingdom a transfer scheme of arrangement under Part 26 of the Companies Act pursuant to which our shareholders exchanged all of Rockley Photonics Limited shares for Rockley Photonics Holdings Limited ordinary shares, at a conversion price of $10.00 per share. The transfer is conditional upon the approval of the Business Combination Agreement, the Business Combination and the Plan of Merger by SC Health shareholders.

The Business Combination was consummated on August 11, 2021 and Rockley Photonics Holdings Limited became a publicly traded company listed on the New York Stock Exchange (“NYSE”) under the symbol “RKLY”.

ROCKLEY PHOTONICS LIMITED

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Subsequent to the consummation of the Business Combination, the Rockley Photonics Limited and its subsidiary entities became a wholly owned subsidiary of Rockley Photonics Holdings Limited.

Immediately following the completion of the Business Combination and the related organizational transactions on August 11, 2021, the following took place:

Rockley Photonics Holdings Limited received $126.9 million in proceeds, net of underwriting discounts and commissions.

The shareholders of SC Health and Rockley Photonics Limited hold 12,339,650 and 103,916,607 shares, or approximately 9.8% and 82.3% ownership interest in Rockley Photonics Holdings Limited, respectively.

The Company’s issued and outstanding convertible loan notes (other than certain convertible notes issued in connection with the 2020 Term Facility Loan, of which 30% were converted to ordinary shares of Holdco and 70% were converted to convertible notes of Holdco that mature on August 31, 2022), inclusive of interest accrued thereon, converted into ordinary shares of Holdco at a conversion price of $10.00 per share.

The Company’s issued and outstanding warrants were converted to ordinary shares of Holdco.

In connection with the transaction, we incurred legal, accounting, and other professional fees in connection with the completion of the Business Combination. Through August 12, 2021, we have paid approximately $29.3 million of these expenses. As of August 12, 2021, approximately $14.8 million of these expenses remained unpaid.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion and analysis of our financial condition and results of operations should be read together with Rockley’s condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and together with Rockley’s audited condensed consolidated financial statements and the related notes included in the final prospectus/proxy statement filed with the SEC pursuant to Rule 424(b)(3) on July 22, 2021. This discussion and analysis reflects our historical results of operations and financial position, and, except as otherwise indicated below, does not give effect to the Business Combination. Historic results are not necessarily indicative of future results. As used in discussion, references to “the company,” “Rockley,” “we,” “us,” and “our,” are intended to refer to the business and operations of Rockley prior to the Business Combination and the business and operations of Holdco as directly or indirectly affected by Rockley by virtue of Holdco’s ownership of Rockley following the Business Combination, unless the context clearly indicates otherwise.

Overview

We have developed a unique sensing platform that we believe can reshape the wellness and healthcare industries through multiple applications in non-invasive, multi-modal biomarker monitoring. We believe products based on our technology platform could have the potential to unlock and accelerate advancements in areas such as early disease detection, nutrition management, and preventative healthcare delivery through continuous health and wellness monitoring.

To date, we have been engaged in developing customer-specific designs of our silicon photonics chipsets for incorporation into our customers’ end products. Accordingly, all of our products are presently in the development stage and we do not currently have any of our own end products in commercial production and have not yet shipped any products commercially. Our unique sensing platform has been built upon our silicon photonics technology, which enables compelling sensor performance, power, resolution, and density. This technology has the potential to allow monitoring devices, currently the size of clinical machines, to be condensed to the size of a wearable device. We believe this in turn has the potential to unlock additional uses in consumer electronics and medical devices. The resulting combination of technologies and manufacturing know-how is the “full-stack Rockley Platform” which is made up of PICs in silicon with integrated III-V devices (devices incorporating certain conductor elements that offer superior electronic properties, such as lasers), ASICs, photonic and electronic co-packaging, together with biosensing algorithms and AI cloud analytics, firmware/software, system architecture, and hardware design.

As testament to the relevance of our product development, we have captured the attention of several consumer electronics companies and, as of the date of this quarterly report on Form 10-Q, we are engaged or in contract with entities which collectively account for over 55% market share of wearable devices (of the 55%, we have an agreement with an entity that represents 42%, an MOU with an entity that represents 5% and we are in discussions with entities which represent at least 8%) and over 50% market share of smartphone devices, based on a combination of data sourced from the Yole Report, the IDtechEx Report and the TrendForce Report, as well as our internal volume forecasts for smartphone, smart watch, and smart earbuds through 2025 (based on customer data). We plan to leverage this attention to develop new capabilities in consumer wearables in the near term, and to expand over time into medical devices and other industry applications.

Our vision is to address many pressing healthcare concerns using our technology and we believe that there exists a large market opportunity for our platform. We estimate that the TAM for the consumer wearables, mobile device, and medical device markets is projected to be over $48 billion by 2025, based on data sourced from the Yole Report, the IDtexEx Report, the TrendForce Report, and our internal volume forecasts for smartphone, smart watch, and smart earbuds through 2025 (based on customer data), as the universe of healthcare and consumer wearable devices incorporating additional sensing capabilities emerges. Our target biomarkers for consumer healthcare include lactate, alcohol, glucose (indicator), carbon monoxide, blood pressure, blood oxygen, and core body temperature, among others. Our high-performance lasers have up to 1,000,000 times higher resolution, 1,000 times higher accuracy and 100 times broader range in wavelengths compared with existing LED offerings in wearable solutions (based on product analysis undertaken by Rockley comparing the Rockley silicon photonics-based spectrometer chip to existing solutions). We believe our platform will also be able to address existing applications in consumer wearable devices with significantly higher resolution, accuracy, and range. Further, we believe there are multiple additional markets and concrete opportunities for our technology platform in areas such as data center connectivity (optical transceivers), machine vision (robotic and automotive LiDAR), and compute connectivity (co-packaged optics, or CPO).

To date, we have generated revenue primarily from NRE and development services for customer-specific designs of silicon photonics chipsets for incorporation into their customers’ end products and we have financed our operations primarily through the issuance of convertible loan notes, as well as private placements of ordinary shares. From the date of our formation through June 30, 2021 we have raised aggregate gross proceeds of approximately $290.0 million from the issuance of convertible loan notes and ordinary shares. For the six months ended June 30, 2021, we incurred a net loss of $95.3 million and utilized $54.5 million in cash to fund our operations.

We expect both our capital and operating expenditures will increase significantly in connection with our ongoing activities, as we:

•

continue to invest in our technology and our silicon photonics solutions;

•

continue to develop innovative solutions and applications for our technology;

•

commercialize our silicon photonics solutions;

•

continue to invest in our sales and marketing activities and distribution channels;

•

invest and improve our operational, financial, and management information systems;

•

increase our headcount;

•

maintain and expand our intellectual property portfolio; and

•

enhance internal functions to support our operations as a public company.

Impact of COVID-19

Comparability of Financial Information

Rockley’s results of operations and statements of assets and liabilities may not be comparable between periods as a result of the Business Combination described below.

Business Combination and Public Company Costs

On March 19, 2021, SC Health Corporation (“SC Health”), Rockley Photonics Holdings Limited (“Holdco”), Merger Sub, and the Company entered into a definitive Business Combination Agreement pursuant to which Holdco to acquire all of the issued and outstanding equity interest of the Company and SC Health. Merger Sub, a newly formed subsidiary of Holdco, merged with and into SC Health, with SC Health surviving the merger. Merger Sub ceased to exist and SC Health became a wholly owned subsidiary of Holdco.

On August 9, 2021, among other things, we proposed to the High Court of the United Kingdom a transfer scheme of arrangement under Part 26 of the Companies Act pursuant to which our shareholders exchanged all of Rockley Photonics Limited shares for Rockley Photonics Holdings Limited ordinary shares, at a conversion price of $10.00 per share. The transfer was conditional upon the approval of the Business Combination Agreement, the Business Combination and the Plan of Merger by SC Health shareholders.

The Business Combination was consummated on August 11, 2021. Holdco became a publicly traded company listed on the New York Stock Exchange (“NYSE”) under the symbol “RKLY” on August 12, 2021.

Consideration for the Business Combination consisted of ordinary shares of Holdco issued in exchange for all outstanding ordinary shares of the Company and SC Health, determined on a fully diluted basis, as if all of the Company’s issued and outstanding convertible loan notes (other than certain convertible notes issued in connection with the Company’s

term facility with Argentum Securities Ireland plc, of which 30% was converted to ordinary shares of Holdco prior to the Scheme becoming effective and 70% was converted to convertible notes of Holdco that will mature on August 31, 2022), inclusive of interest accrued thereon, converted into ordinary shares of Holdco at a conversion price of $10.00 per share, and options exercisable for Holdco ordinary shares issued in exchange for all outstanding options exercisable for Rockley ordinary shares.

The following expenses were incurred upon closing of the Business Combination:

•

Total non-recurring transaction costs estimated at approximately $44.1 million, of which the Company expects approximately $1.0 million to be expensed; and

•

The payment of deferred legal fees, underwriting commission, and other costs in connection with the initial public offering.

Pursuant to the Business Combination Agreement, the aggregate consideration, consisting of ordinary shares of Holdco issuable to the Company security holders following a stock split at Holdco, will be the number of Holdco ordinary shares that results from dividing $1,148,114,113 by 10.

Concurrently with the execution of the Business Combination Agreement, SC Health and Holdco entered into Investor Subscription Agreements with certain investors, including, among others, the Sponsor Related PIPE Investor. Pursuant to the Investor Subscription Agreements, each investor agreed to subscribe for and purchase, and Holdco agreed to issue and sell an aggregate of 14,790,000 Holdco ordinary shares, at $10.00 per share, for an aggregate commitment amount of $147,900,000.

Also, concurrently with the execution of the Business Combination Agreement, SC Health and Holdco entered into Individual Subscription Agreements with three individuals pursuant to which Holdco agreed to issue and sell an aggregate of 210,000 Holdco ordinary shares, at $10.00 per share, for an aggregate commitment amount of $2,100,000. These three individuals are existing shareholders of the Company.

PIPE Financing; Accounting for the Business Combination

The Business Combination was accounted for as a forward recapitalization in accordance with GAAP. Under this method of accounting, SC Health was treated as the acquired company for financial reporting purposes, and the Company was treated as the accounting acquirer. In accordance with this accounting, the Business Combination was treated as the equivalent of the Company issuing stock for the net assets of SC Health, accompanied by a recapitalization. The net assets of SC Health were stated at historical costs, with no goodwill or other intangible assets recorded, and operations prior to the Business Combination will be those of the Company. The Company has been deemed the accounting acquirer for purposes of the Business Combination based on an evaluation of the following facts and circumstances:

•

Rockley’s existing shareholders will hold a majority ownership interest in Holdco, irrespective of whether or not existing shareholders of SC Health exercise their right to redeem their ordinary shares of SC Health;

•

Rockley’s existing senior management team will comprise senior management of Holdco;

•

Rockley’s is the larger of the companies based on historical operating activity and employee base; and

•

Rockley’s operations will comprise the ongoing operations of Holdco.

As a consequence of the Business Combination, Holdco became an SEC-registered and NYSE-listed company, which will require it to hire additional talent and implement procedures and processes to address public company regulatory requirements and customary practices. Holdco expects to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees.

Key Factors Affecting Operating Results

We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including, without limitation, the following:

Resource Constraints

Our products are currently under development and we do not have any products in commercial production. Our ability to achieve our product roadmaps and development timelines, including our ability to commence commercial production of our products, may be impacted by resource constraints, including the need for additional capital. We have a history of losses and our determination of substantial doubt as a going concern could materially limit our ability to raise additional funds through the issuance of equity securities or otherwise. Further, our products must also meet certain technical standards and customer requirements, which in turn require additional funds and other resources. Additional financing and resources may not be available to us when needed or on commercially reasonable terms.

Ability to Achieve Design Wins or Long-Term Production Contracts

We may engage in discussions with customers and co-develop products but we may not be able to convert the relationship into a design win or a long-term production contract due to resource constraints, delays, or technical challenges. We work closely with our customers and potential customers to understand their product roadmaps and strategies. Our customers also continuously develop new products in existing and new application areas. We believe achieving design wins and the ability to secure long-term production contracts will be critical to our future success. The selection process is typically lengthy and may require us to incur significant design and development expenditures in pursuit of a design win with no assurance that our products will be selected. The failure to secure a design win or long-term production contract could adversely affect our business.

Customer Orders and Forecasts

We currently anticipate that sales of our future products will be made pursuant to standard purchase orders, which may be cancelled, reduced, or rescheduled with little or no notice and without penalty. Cancellations of orders could result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses. In addition, changes in forecasts or the timing of orders from customers, including if and when we commence commercial production of our products, could expose us to the risks of inventory shortages or excess inventory.

Pricing and Customer Demand

We expect our operating results, including if and when we commence commercial production of our products, will be impacted by the pricing of our products, our average selling prices, and fluctuations in customer purchasing volumes. If and when we begin commercial production of our products, we may not be able to fulfill customer demand in a timely manner or at all. We monitor and work to reduce our product manufacturing costs and improve the potential value our products can provide to our customers’ end products. The cost of raw materials and components critical for the manufacture of our anticipated products is largely out of our control and may fluctuate significantly. Since we rely on third-party wafer foundries and assembly and test contractors to manufacture, assemble, and test our products, we maintain a close relationship with our suppliers to improve quality, increase yields, and lower manufacturing costs.

New Markets and Applications

As we evaluate potential markets and applications for the products we are developing, we analyze forecasts by industry analysts, the adoption curve of technology, and potential competing forces that could hinder such adoption. If we fail to anticipate or respond to technological shifts or market demands, or to timely develop products or technologies in response to the same, it could result in our inability to achieve revenue growth and could harm our business and operations.

Cyclical Nature of the Semiconductor Industry

The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product obsolescence, price erosion, evolving standards, short product life cycles, and wide fluctuations in product supply and demand. Downturns in the semiconductor industry have been characterized by diminished product demand, production overcapacity, high inventory levels, and accelerated erosion of average selling prices. Any prolonged or significant downturn in the semiconductor industry generally could adversely affect our business and reduce demand for our products and otherwise harm our financial condition and results of operations.

See the “Risk Factors” section of this quarterly report on Form 10-Q for additional discussion of the risks and challenges facing our business.

Basis of Presentation

Currently, we conduct business through one operating and reportable segment. All long-lived assets are maintained in, and all losses are attributable to the one segment.

Components of Results of Operations

The following discusses certain line items in Rockley’s condensed consolidated statements of operations.

Revenue

To date, we have primarily generated revenue from development services, which entail developing customer-specific designs of silicon photonics chipsets. Our contracts with customers include specific achievement of agreed-upon projects and a substantive acceptance criteria for each agreed-upon project. In the event an agreed-upon project is successful and the customer provides acceptance, we allocate the contract consideration related to the performance obligations that are satisfied during the period and recognize the revenue at that point in time.

Following the completion of our product development phase and introduction of our spectra-sense chipsets to the wearable devices market, we expect the majority of our revenue to be derived from sales of high-volume consumer wearable products. In addition, we plan to offer advanced module applications with biomarker detection capabilities for advanced health metrics that can detect, classify, and potentially prevent disease. We also expect to offer a cloud analytics platform to provide a full range of subscription services, including the deployment of our technology through a subscription and cloud-based software as a service.

Cost of Revenue

To date, our cost of revenue has included cost related to our development services, which include cost of materials, cost associated with packaging and assembly, testing and shipping, cost of talent, including stock-based compensation, and equipment associated with manufacturing support, logistics, and quality assurance, overhead, and occupancy costs. Once we commence commercial production of our silicon photonics chipsets, cost of revenues will include direct parts, material, and labor costs, manufacturing overhead, including amortized tooling costs, shipping and logistics costs, and reserves for estimated warranty expenses.

Gross Profit and Gross Margin

Gross profit is calculated based on the difference between our revenue and cost of revenue. Gross margin is the percentage obtained by dividing gross profit by our revenue. As we approach commercial production of spectra-sense chipsets, advanced module applications, and Rockley Photonics Cloud Analytics technology, we expect our gross profit and gross margin to vary.

Selling, General, and Administrative Expense

Selling, general, and administrative expenses consist of human capital related expenses for employees involved in general corporate functions, including executive management and administration, accounting, finance, tax, legal, information technology, marketing, and human resources; depreciation expense and rent relating to facilities; travel costs; professional fees; and other general corporate costs. Human capital expenses primarily include salaries, benefits, bonuses, and stock-based compensation. We expect our selling, general and administrative expense to increase in absolute dollars for the foreseeable future as we increase our headcount to support the growth of our business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional general and director and officer insurance expenses, investor relations activities, and other administrative and professional services.

Research and Development Expense

Research and development expense consists primarily of talent costs for engineers and third parties engaged in the design and development of products, software, and technologies, including salary, bonus, and stock-based compensation expense, project material costs, services, and depreciation of our research and development facilities and equipment. We expense research and development costs as they are incurred. Research and development expense also includes the research and development tax credits that we are able to claim in accordance with the relevant U.K. tax legislation. These tax credits are payable to us in cash and are carried on the consolidated balance sheets at the amount claimed and expected to be received from the U.K. government within the next 12 months. We expect research and development expense to increase in absolute dollars as we continue to invest in the development of our products and technology.

Other income (Expense)

Other income consists of miscellaneous non-operating items, such as forgiveness of debt and related accrued interest.

Interest Income (Expense)

Interest income consists primarily of interest received or earned on our cash, cash equivalents, and investment balances held in interest-bearing deposit accounts. Interest expense consists of interest paid on our convertible loan notes and capital lease obligations.

Equity Method Investment

Equity method investments consist of entities over which we have significant influence but not control or joint control. Under the equity method of accounting, all of our investments are initially recognized at cost and adjusted thereafter to recognize our share of the post-acquisition profits or losses of the investee in our consolidated statements of operations.

Change in Fair Value of Debt Instruments

Gains or losses from the change in fair value of debt instruments are recorded from the remeasurement of the fair value of our convertible loan notes using discounted cash flow and binomial lattice methodologies based upon certain valuation assumptions.

Gain (Loss) on Foreign Currency

We have significant international operations that are denominated in foreign currencies, primarily the British Pound and Euro, subjecting us to foreign currency exchange risk that may adversely impact our financial results. We calculate the year-over-year impact of foreign currency movement on our business using foreign currency exchange rates that are applied to transactional currency amounts.

Provision for Income Tax

We are subject to income taxes in the United Kingdom, the United States, Finland, Ireland, and Switzerland. Our income tax provision consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. Due to cumulative losses, we maintain a valuation allowance against our U.S. federal and foreign deferred tax assets.

Results of Operations for the Three and Six Months Ended June 30, 2021 Compared to the Three and Six Months Ended June 30, 2020

The following table sets forth our historical operating results for the periods indicated (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenue	$	2,195		$	7,881		$	3,966		$	14,544
Cost of revenue		4,549			6,522			8,283			13,085

Gross profit		(2,354	)		1,359			(4,317	)		1,459

Operating expenses:
Selling, general and administrative expenses		6,715			3,604			14,020			7,249
Research and development expenses		17,551			7,746			33,531			16,217

Total operating expenses		24,266			11,350			47,551			23,466

Loss from operations		(26,620	)		(9,991	)		(51,868	)		(22,007	)
Other income (expense):
Other income, net		2,860			—			2,860			—
Interest expense, net		(179	)		(34	)		(326	)		(74	)
Equity method investment loss		(597	)		(102	)		(760	)		(252	)
Change in fair value of debt instruments		(6,008	)		312			(45,661	)		(2,222	)
Gain (loss) on foreign currency		97			(108	)		631			(1,654	)

Total other income (expense)		(3,827	)		68			(43,256	)		(4,202	)

Loss before income taxes		(30,447	)		(9,923	)		(95,124	)		(26,209	)
Provision for income tax		110			80			210			220

Net loss and comprehensive loss	$	(30,557	)	$	(10,003	)	$	(95,334	)	$	(26,429	)

Discussion and Analysis of Results of Operations

Revenue (in thousands, except for percentages)


	Three Months Ended June 30,				Change						Six Months Ended June 30,				Change
	2021		2020		$			%			2021		2020		$			%
Revenue	$	2,195	$	7,881	$	(5,686	)		(72	)%	$	3,966	$	14,544	$	(10,578	)		(73	)%

Revenue decreased by $5.7 million, or 72%, to $2.2 million for the three months ended June 30, 2021 from $7.9 million for the three months ended June 30, 2020. Revenue decreased by $10.6 million, or 73%, to $4.0 million for the six months ended June 30, 2021 from $14.5 million for the six months ended June 30, 2020. This decrease is primarily driven by an ongoing backlog of project deliverables in fiscal 2021 when compared to fiscal 2020 where we completed and delivered on project milestones for our significant customers.

Cost of Revenue and Gross Profit (in thousands, except for percentages)


	Three Months Ended June 30,						Change						Six Months Ended June 30,						Change
	2021			2020			$			%			2021			2020			$			%
Cost of revenue	$	4,549		$	6,522		$	(1,973	)		(30	)%	$	8,283		$	13,085		$	(4,802	)		(37	)%
Gross Profit	$	(2,354	)	$	1,359		$	(3,713	)		(273	)%	$	(4,317	)	$	1,459		$	(5,776	)		(396	)%
Gross Margin		(107	)%		17	%		NM			NM			(109	)%		10	%		NM			NM

NM – Not meaningful

Cost of revenue decreased by $2.0 million, or 30%, to $4.5 million for the three months ended June 30, 2021 from $6.5 million for the three months ended June 30, 2020. This decrease in cost of revenue was primarily driven by a decrease of $2.5 million from engineering, fab partner, and stock-based compensation costs. The decrease was partially offset by $1.0 million in research and development tax credits and grants we received in 2021 compared to the prior period due to lower claims for our research and development activities. Gross profit decreased by $3.7 million, or 273% to $(2.4) million for the three months ended June 30, 2021 from $1.4 million for the three months ended June 30, 2020. The decrease in gross profit was primarily driven by an overall decrease in revenue for the three months ended June 30, 2021 and higher costs incurred on product development activities.

Cost of revenue decreased by $4.8 million, or 37%, to $8.3 million for the six months ended June 30, 2021 from $13.1 million for the six months ended June 30, 2020. This decrease in cost of revenue was primarily driven by a decrease of $6.0 million from engineering, fab, partner and stock-based compensation costs. The decrease was partially offset by $1.8 million in research and development tax credits and grants we received in 2021 compared to the prior period where our claims for tax credits for our research and development activities were lower. Gross profit decreased by $5.8 million, or 396% to $(4.3) million for the six months ended June 30, 2021 from $1.5 million for the six months ended June 30, 2020. The decrease in gross profit was primarily driven by a decrease in revenue for the six months ended June 30, 2021 and higher costs incurred on product development activities. Our revenue is recognized at the achievement of milestones and is not necessarily aligned with the timing of costs we incur.

Our gross margin has fluctuated and may fluctuate from period to period based on a number of factors, including the timing of completion of project milestones with each project requiring differing levels of time and costs. The projects we undertake are determined by our customer commitments and our long-term strategy goals.

Selling, General and Administrative Expenses (in thousands, except for percentages)


	Three Months Ended June 30,				Change					Six Months Ended June 30,				Change
	2021		2020		$		%			2021		2020		$		%
Selling, general and administrative expenses	$	6,715	$	3,604	$	3,111		86	%	$	14,020	$	7,249	$	6,771		93	%

Selling, general and administrative expenses increased by $3.1 million, or 86%, to $6.7 million for the three months ended June 30, 2021 from $3.6 million for the three months ended June 30, 2020. The increase was primarily due to general corporate growth, of which $0.7 million was from additional professional fees related to accounting, legal and audit matters, and $1.5 million and $0.1 million were due to increased human capital and stock-based compensation costs, respectively.

Selling, general and administrative expenses increased by $6.8 million, or 93%, to $14.0 million for the six months ended June 30, 2021 from $7.2 million for the six months ended June 30, 2020. The increase was primarily due to general corporate growth, of which $2.9 million was from additional professional fees related to accounting, legal and audit matters, and $2.2 million and $0.1 million were due to increased human capital and stock-based compensation costs, respectively.

Research and Development Expenses (in thousands, except for percentages)


	Three Months Ended June 30,				Change					Six Months Ended June 30,				Change
	2021		2020		$		%			2021		2020		$		%
Research and development expenses	$	17,551	$	7,746	$	9,805		127	%	$	33,531	$	16,217	$	17,314		107	%

Research and development expenses increased by $9.8 million, or 127%, to $17.6 million for the three months ended June 30, 2021 from $7.7 million for the three months ended June 30, 2020. The increase was primarily attributable to growth of $3.6 million from engineering, fab partner, and engineering research and development headcount. This also led to an increase in human capital and stock-based compensation expenses of $4.4 million and $0.2 million, respectively. The increase was partially offset by a decrease of $0.9 million in research and development tax credits and grants we received in 2021 compared to the prior period due to lower claims for our research and development activities.

Research and development expenses increased by $17.3 million, or 107%, to $33.5 million for the six months ended June 30, 2021 from $16.2 million for the six months ended June 30, 2020. The increase was primarily attributable to growth of $8.6 million from engineering, fab partner, and engineering research and development headcount. This also led to an increase in human capital and stock-based compensation expenses of $6.6 million and $0.8 million, respectively. The increase was partially offset by a decrease of $1.4 million in research and development tax credits and grants we received in 2021 compared to the prior period due to lower claims for our research and development activities.

Other income, net (in thousands, except for percentages)


	Three Months Ended June 30,				Change					Six Months Ended June 30,				Change
	2021		2020		$		%			2021		2020		$		%
Other income, net		2,860		—	$	2,860		100	%	$	2,860	$	—	$	2,860		100	%

Other income, net during the three and six months ended June 30, 2021 consisted of debt forgiveness of the $2.9 million PPP Loan and related accrued interest.

Interest Expense, net (in thousands, except for percentages)


	Three Months Ended June 30,						Change						Six Months Ended June 30,						Change
	2021			2020			$			%			2021			2020			$			%
Interest expense, net	$	(179	)	$	(34	)	$	(145	)		426	%	$	(326	)	$	(74	)	$	(252	)		341	%

Change in interest expense, net was immaterial for the three months ended June 30, 2021 and 2020.

Interest expense, net increased by $0.1 million and $0.3 million, or 426% and 341%, for the three and six months ended June 30, 2021, respectively, when compared to the same periods of fiscal 2020. The increase was primarily driven by an increase in our outstanding convertible loan balance in 2021.

Equity Method Investment Loss (in thousands, except for percentages)


	Three Months Ended June 30,						Change						Six Months Ended June 30,						Change
	2021			2020			$			%			2021			2020			$			%
Equity method investment loss	$	(597	)	$	(102	)	$	(495	)		485	%	$	(760	)	$	(252	)	$	(508	)		202	%

Change in equity method investment captures our share of losses of the investment in Hengtong Rockley Technology Co., Ltd (“HRT”) according to our percentage of ownership.

Change in Fair Value of Debt Instruments (in thousands, except for percentages)


	Three Months Ended June 30,					Change						Six Months Ended June 30,						Change
	2021			2020		$			%			2021			2020			$			%
Change in fair value of debt instruments	$	(6,008	)	$	312	$	(6,320	)		(2,026	)%	$	(45,661	)	$	(2,222	)	$	(43,439	)		1,955	%

Change in fair value of debt instruments captures losses from a change in fair value estimates using discounted cash flow and binomial lattice methodologies that are based upon a set of valuation assumptions. The key assumptions used in valuation include default rates from historical performance, risk-free rates, expected volatility rates, and discount rates that reflect estimates of the rates of return that investors would require when investing in other convertible debt with similar characteristics. The change in fair value of debt instruments is a result of the difference in value between the initial issuance and subsequent fair value measurements.

Gain (Loss) on Foreign Currency (in thousands, except for percentages)


	Three Months Ended June 30,					Change					Six Months Ended June 30,					Change
	2021		2020			$		%			2021		2020			$		%
Gain (loss) on foreign currency	$	97	$	(108	)	$	205		(190	)%	$	631	$	(1,654	)	$	2,285		(138	)%

Change in gain (loss) on foreign currency captures losses from the impact of foreign currency exchange rates as a result of the translation of foreign functional currencies into our reporting currency and the re-measurement of foreign currency transactions and balances. During the three and six months ended June 30, 2021 and 2020, most of our balances are held in the reporting currency, which decrease the impact of foreign currency fluctuations on the results of our operations.

Provision for Income Tax (in thousands, except for percentages)


	Three Months Ended June 30,				Change					Six Months Ended June 30,				Change
	2021		2020		$		%			2021		2020		$			%
Provision for income tax	$	110	$	80	$	30		38	%	$	210	$	220	$	(10	)		(5	)%

Change in provision for income tax expense was immaterial for the three and six months ended June 30, 2021 and 2020. The effective income tax rate was less than 1.0% for the three and six months ended June 30, 2021 and 2020. Our effective tax rate differs from the U.S. statutory rate primarily due to a substantially full valuation allowance against our net deferred tax assets where it is more likely than not that some or all of the deferred tax assets will not be realized. The income tax expenses shown above are primarily related to corporate income taxes in the United States, which operates on a cost-plus arrangement and minimum filing fees in the foreign jurisdictions where we have operations.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operational performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively and in context, may be helpful to investors in assessing our operating performance and trends and in comparing our financial measures with those of comparable companies which may present similar non-GAAP financial measures.

Limitations of Non-GAAP Measures

These non-GAAP financial measures are not prepared in accordance with GAAP, are supplemental in nature, and are not intended, and should not be construed, as the sole measure of our performance, and should not be considered in isolation from or as a substitute for comparable financial measures prepared in accordance with GAAP. There are a number of limitations related to EBITDA and Adjusted EBITDA, including the following:

•

EBITDA and Adjusted EBITDA exclude certain recurring, non-cash charges, such as depreciation of property and equipment and/or amortization of intangible assets. While these are non-cash charges, we may need to replace the assets being depreciated and amortized in the future and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect cash requirements for these replacements or new capital expenditure requirements.

•

EBITDA and Adjusted EBITDA do not reflect interest expense, net, which may constitute a significant recurring expense in the future.

•

Adjusted EBITDA excludes stock-based compensation, which may constitute a significant recurring expense in the future, as equity awards are expected to continue to be an important component of our compensation strategy.

•

Future expenses may be similar to the non-recurring special items that are excluded from Adjusted EBITDA.

Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.

EBITDA and Adjusted EBITDA

We define “EBITDA” as net loss before interest expense, net, income tax expense, and depreciation and amortization. We define “Adjusted EBITDA” as EBITDA adjusted for stock-based compensation, non-capitalized transaction costs, and other non-recurring special items determined by management that are not considered representative of our underlying operating performance. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate EBITDA or Adjusted EBITDA in the same fashion.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. You should review the reconciliation of our net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.

Reconciliation

The following table reconciles our net loss (the most directly comparable GAAP measure to EBITDA and Adjusted EBITDA) to EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2021 and 2020 (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net Loss	$	(30,557	)	$	(10,003	)	$	(95,334	)	$	(26,429	)
Interest expense, net		179			34			326			74
Provision for income tax		110			80			210			220
Depreciation and amortization		1,069			706			1,999			1,395

EBITDA		(29,199	)		(9,183	)		(92,799	)		(24,740	)
Non-capitalized transaction costs*		79			30			1,040			30
Stock-based compensation		1,976			2,545			3,701			4,189
Equity-method investment loss		604			102			491			252
Change in fair value of debt instruments		6,008			(312	)		45,661			2,222
Forgiveness of PPP loan		(2,860	)		—			(2,860	)		—

Adjusted EBITDA	$	(23,392	)	$	(6,818	)	$	(44,766	)	$	(18,047	)

*	Non-capitalized transaction costs include non-recurring expense related to the issuance of convertible loan notes in 2021 and the Business Combination.

Liquidity and Capital Resources

Due to Rockley’s history of recurring losses from operations, negative cash flows from operations, and a significant accumulated deficit, management concluded that there is substantial doubt about Rockley’s ability to continue as a going concern. In addition, our independent registered public accounting firm has included an explanatory paragraph in their opinion for the year ended December 31, 2020 as to the substantial doubt about our ability to continue as a going concern. Since inception, Rockley has financed its operations primarily through the issuance and sale of convertible loan notes, ordinary shares and agreed-upon projects. As of June 30, 2021 and December 31, 2020, the cash and cash equivalents balance was $35.4 million and $19.2 million, respectively.

As of the date of this quarterly report on Form 10-Q, we have yet to generate any material revenue from our business operations. Based on current cash on hand, management’s plan to continue as a going concern includes raising additional financing, specifically through the Business Combination and PIPE Financing to satisfy our minimum cash requirements for at least the next 12 months. The funds raised through the Business Combination and PIPE Financing will be used to support our core business operations and overall growth of our business and to execute our current growth strategies. Upon the consummation of the Business Combination and PIPE Financing, we plan to control the timing and extent of certain discretionary operating and planned capital expenditures. Accordingly, absent the funds to be raised upon completion of the Business Combination and PIPE Financing, management has concluded that substantial doubt exists about our ability to continue as going concern.

Upon the consummation of the Business Combination and the PIPE Financing, we received approximately $126.9 million of cash, net of transaction costs, which will be used to fund our future capital and liquidity needs in order to support our core business operations and overall growth of our business and to execute our current growth strategies.

As of the date of this quarterly report on Form 10-Q, management believes that the cash that may be generated by the closing of the of the Business Combination and the PIPE Financing will be sufficient to fund both our cash needs for the execution of our business strategy at least the next 12 months, including (1) investing in research and developments activities, including completion and commercialization of our wearables, smart phone and point-of-care technologies, (2) investing in backend processing, intellectual property protection, quality control and process, (3) expanding sales and marketing activities, and (4) pursuing strategic partnerships. However, our anticipated cash needs could vary materially and negatively as a result of a number of factors, including:

•

Timing and the costs involved in bringing our products to market;

•

Anticipated customer contracts and design wins may not materialize;

•

Delay in launching our products due to technical challenges from our customers or our product development team;

•

Pricing and the volume of sales of our products may be different from our forecast;

•

Execution delays due to resources constraints;

•

Assisting our fab partners with expansion of production capacity;

•

The cost of maintaining, expanding and protecting our intellectual property portfolio, including litigation costs and liabilities;

•

The cost of additional general and administrative talent, including accounting and finance, legal and human resources, as a result of becoming a public company; and

•

Rockley’s additional investment requirement needed for Hengtong Rockley Technology Co., Ltd. to be self-sufficient; and

•

Other risks discussed in the section entitled “Risk Factors.”

If we do not generate sufficient revenue, we will be required to explore various options to fund future cash needs through sale of additional equity, debt financing, and others. There can be no assurance that any such issuance of equity securities, debt financing or other means of financing will be available in the future, or the terms of any such financing will be acceptable to us. If we raise funds by issuing equity securities, there will be dilution to the existing shareholders. Any equity securities issued may also provide for rights, preferences, or privileges senior to those holders of ordinary shares. If we raise funds by issuing debt securities, these debt securities would have rights, preferences, and privileges senior to the holders of ordinary shares. The term of debt securities or borrowing could impose significant restriction on our operations. The credit market and financial service industry have in the past, and may in the future, experience periods of upheaval that could impact the availability and cost of equity and debt financing.

If adequate funds are not available, we will need to curb our expansion plans or limit our research and development activities, which would have a material adverse impact on our business prospects and results of operations.

Historical Cash Flows

For the Six Months Ended June 30, 2021 and 2020


	Six Months Ended June 30,
	2021			2020
(in thousands)
Net cash used in operating activities	$	(54,457	)	$	(13,106	)
Net cash used in investing activities		(3,322	)		(3,150	)
Net cash provided by financing activities		73,946			13,915

Net increase (decrease) in cash and cash equivalents	$	16,167		$	(2,341	)

Cash Flows from Operating Activities

During the six months ended June 30, 2021, net cash used in operating activities was $54.5 million, primarily consisting of net losses of $95.3 million, adjusted by non-cash depreciation and amortization of $2.0 million, bad debt expense of $0.4 million, stock-based compensation of $3.7 million, equity-method investment loss of $0.5 million, and a loss related to the change in fair value of debt instruments of $45.7 million. Changes in assets and liabilities for the six months ended June 30, 2021 included the following: decreases in accounts receivable and other current assets, offset by increases in other receivables, prepaid expenses, trade payables and accrued expenses.

During the six months ended June 30, 2020, net cash used in operating activities was $13.1 million, primarily consisting of net losses of $26.4 million, adjusted by non-cash depreciation and amortization of $1.4 million , stock-based compensation of $4.2 million, equity-method investment loss of $0.3 million, and a loss related to the change in fair value of debt instruments of $2.2 million. Changes in assets and liabilities for the six months ended June 30, 2020 included the following: increases in accounts receivable and accrued expenses, offset by decreases in other receivables, prepaid expenses, other current assets, and trade payables.

Cash Flows from Investing Activities

Net cash used in investing activities was $3.3 million for the six months ended June 30, 2021, primarily related to the purchases of property and equipment to be used in the ordinary course of business. Net cash used in investing activities was $3.2 million for the six months ended June 30, 2020, primarily related to the investment in our HRT of $2.5 million and the remaining $0.7 million was related to purchases of property and equipment to be used in the ordinary course of business.

Cash Flows from Financing Activities

Net cash provided by financing activities was $73.9 million for the six months ended June 30, 2021, primarily consisting of proceeds received for convertible loan notes and payments made for debt issuance costs. Net cash provided by financing activities was $13.9 million for the six months ended June 30, 2020, primarily consisting of proceeds received for convertible loan notes and Paycheck Protection Program.

Contractual Obligations and Commitments

Purchase obligations include commitments to third-party suppliers for various research and development activities. As of June 30, 2021, we had $8.1 million in contractual obligations for which we have not yet received services.

Off-Balance Sheet Arrangements

Since the date of our incorporation, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Recent Accounting Pronouncements

Please refer to Note 1 of our condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations.

Critical Accounting Policies and Estimates

Our financial statements have been prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”), and we consider the various staff accounting bulletins and other applicable guidance issued by the SEC. The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Our actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

While our significant accounting policies are described in Note 1 of our condensed consolidated financial statements included in this quarterly report on Form 10-Q, we believe that the following accounting policies are most critical to understanding our financial condition and historical and future results of operations:

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Revenue recognition;

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Equity valuations;

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Fair value of financial instruments and fair value measurements; and

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Income taxes

Revenue Recognition

We generate revenue principally from development services, which entails developing customer-specific designs of photonics chipsets. Our contracts with customers include specific achievement milestones and a substantive acceptance criteria for each milestone. In the event a milestone is achieved and the customer provides acceptance, we allocate the contract consideration related to the performance obligations that are satisfied during the period and recognize the revenue at that point in time.

Equity Valuations

As there is not a market for the Company’s equity, valuations of the Company’s equity instruments require the application of significant estimates, assumptions, and judgment. These valuations impact various amounts reported in the Company’s financial statements, inclusive of the recognition of equity-based compensation and fair value of convertible loan notes. The following discussion provides additional detail regarding the significant estimates, assumptions, and judgment that impact the determination of the fair values of equity-based compensation awards, warrants, and the ordinary shares that comprises the Company’s capital structure. The following discussion also explains why these estimates, assumptions, and judgments could be subject to uncertainties and future variability.

Equity-Based Compensation, Warrants

The Company estimates the grant date fair value of stock options, warrants, and restricted stock awards granted to employees, non-employees and directors and uses the estimated fair values to measure and recognize the costs for services received in exchange for the grants.

The Company uses the Black-Scholes option-pricing model in order to estimate the fair values of both time-based stock option awards and warrants. Estimating the fair value of stock options and warrants using the Black-Scholes option-pricing model requires the application of significant assumptions, such as the fair value of our underlying ordinary shares, the estimated term of the option, the risk-free interest rates, the expected volatility of the price of our ordinary shares and the expected dividend yield. Each of these assumptions is subjective, require significant judgment, and is based upon management’s best estimates. If any of these assumptions were to change significantly in the future, equity-based compensation for future awards may differ significantly, as compared with awards previously granted.

The assumptions and estimates applied by the Company to derive the inputs for inclusion in the Black-Scholes pricing model are as follows:

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Fair value of ordinary shares—see “Ordinary shares Valuations” discussion below;

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Expected Term—This is the period that the options or warrants that have been granted are expected to remain unexercised. The Company employs the average period the stock options and warrants are expected to remain outstanding;

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Volatility—This is a measure of the amount by which a financial variable, such as a share price, has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. As the Company does not yet have sufficient history of its own volatility, management has identified several guideline comparable companies and estimates volatility based on the volatility of those companies;

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Risk-Free Interest Rate—This is the U.S. Treasury rate, having a term that most closely resembles the expected life of the stock option or warrant; and

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Dividend Yield—The Company has not and does not expect to pay dividends on its ordinary shares in the foreseeable future.

Convertible Loan Notes

The Company estimates the fair value of convertible loan notes held by its investors at issuance of the note and also at each reporting period-end by using the estimated fair values of the ordinary shares and recognizing changes in the fair value of the note in the Company’s statement of operations and comprehensive loss. The Company determines the conversion option component by using the binomial lattice approach which requires the application of significant assumptions, such as the fair value of our underlying ordinary shares, the risk-free interest rates, the expected volatility of the price of our ordinary shares and the implied discount yield. Each of these assumptions is subjective, require significant judgment, and is based upon management’s best estimates, and may impact the change in fair value of the convertible loan note that is recognized in the Company’s statement of operations and comprehensive loss.

Ordinary Shares Valuations

The Company uses valuations of its ordinary shares for various purposes, including, but not limited to, the determination of the exercise price of stock options and warrants and inclusion in the Black-Scholes option pricing model. The Company also uses valuations of its ordinary shares for determining the fair value of its convertible loan notes. As a privately held company, the lack of an active public market for our ordinary shares requires our management and board of directors to exercise reasonable judgment and consider a number of factors in order to make the best estimate of fair value of our equity. We engaged the assistance of a third-party valuation specialist to determine the fair value of the ordinary shares by first estimating the fair value of our total enterprise value and total equity value using a combination of the income approach and guideline transaction method. Estimating our total enterprise value and total equity value requires the application of significant judgment and assumptions. Factors considered in connection with estimating these values:

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Rockley’s historical financial results and future financial projections;

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The lack of marketability of Rockley’s ordinary shares;

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The likelihood of achieving a liquidity event, such as an initial public offering or business combination, given prevailing market conditions;

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Industry outlook; and

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General economic outlook, including economic growth, inflation and unemployment, interest rate environment and global economic trends.

The fair value ultimately assigned to our ordinary shares may take into account any number or combination of the various factors described above, based upon their applicability at the time of measurement. Determination of the fair value of our ordinary shares may also involve the application of multiple valuation methodologies and approaches, with varying weighting applied to each methodology as of the grant date. Application of these approaches involves the use of estimates, judgment, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and future cash flows; discount rates; market multiples; the selection of comparable companies; and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation of our ordinary shares. During 2020, the estimated fair value of our ordinary shares fluctuated between $10.433 and $20.280 per share, the later fair value primarily reflecting our progress towards a business combination. The necessary steps undertaken to prepare for the Business Combination included meeting with SC Health and investment bankers, discussing timing expectations, and negotiating the preliminary Letter of Intent between SC Health and the Company. A Letter of Intent related to the Business Combination was signed by both parties in January 2021 reflecting an increased likelihood of a near-term exit transaction and/or liquidity event. The valuation of the Company’s equity as of December 31, 2020 took into consideration the indicated equity value implied in the signed Letter of Intent. While the December 31, 2020 valuation incorporated equity values based upon the traditional income approach consisting of the discounted cash flow method, the valuation also incorporated the equity value implied by the planned Business Combination transaction. Accordingly, the valuation applied the probability-weighted expected return method (PWERM) to weigh the indicated equity value determined under the traditional income approach and the equity value implied by our planned Business Combination. Based upon management’s determination that there was a high probability that the Business Combination would occur, a higher weighting was assigned to the implied value of the negotiated Business Combination transaction.

As of June 30, 2021, the Company estimated fair value of ordinary shares to be $24.70 per share, which represents an increase in value when compared to the ordinary shares value of $20.28 per share determined as of December 31, 2020. While the June 30, 2021 valuation incorporated equity values based upon the interpolation and income approach consisting of the discounted cash flow method, the valuation also incorporated the equity value implied by the planned Business Combination, which was consummated on August 11, 2021. Accordingly, the valuation applied a calibration approach to determine the implied internal rate of return of the recent Series E round as of the investment date and discount rate in order to calculate the company-specific risk premium of the Series E round of financing. Based upon management’s assumption that the Business Combination would occur, a higher weighting was assigned to the implied value of the negotiated Business Combination transaction.

Equity-based grants and issuance of convertible loan notes occur throughout the year. However, the valuation of the ordinary shares is performed at specific points in the fiscal year such as the end of the fiscal quarter or fiscal year. Therefore, to determine the fair value of the ordinary shares at points in time in between valuation dates, management interpolated the change in the fair value of our ordinary shares to derive a fair value between valuation dates.

Upon consummation of the Business Combination, we exchanged approximately 0.403 of our ordinary shares for each SC Health common share equivalent, determined based upon the number shares of our ordinary shares that would be outstanding if each outstanding share of our warrants and all of our convertible loan notes were to convert to our ordinary shares immediately prior to the merger. Accordingly, the indicated fair value of our equity based upon the terms of the Business Combination was $1.2 billion. Following the Business Combination with SC Health, it will not be necessary for our management and its board of directors to estimate the fair value of our ordinary shares, as the ordinary shares of the combined company will be traded on the NYSE.

Fair Value of Financial Instruments and Fair Value Measurements

We determine fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. For debt instruments for which we have elected fair value accounting, fair value is based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Where available, fair value is based on or derived from observable market prices or other observable inputs. Where observable prices or inputs are not available, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. For debt instruments for which we have not elected fair value accounting, fair value is based on the present value of expected future cash flows and assumptions about the then-current market interest rates as of the reporting period and our creditworthiness. The carrying value of these debt instruments approximates fair value as the stated interest rate approximates market rates currently available to us.

Income Taxes

We record income tax expense for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of asset and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record valuation allowances to reduce its deferred tax assets to the net amount that it believes is more likely than not to be realized. Its assessment considers the realization of deferred tax assets on a jurisdictional basis. We recognize the income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. The income tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to a variety of market and other risks, including the effects of changes in interest rates, inflation, and foreign currency exchange rates, as well as risks to the availability of funding sources, hazard events, and specific asset risks.

Interest Rate Risk

The market risk inherent in our financial instruments and our financial position represents the potential loss arising from adverse changes in interest rates. As of June 30, 2021, we had cash and cash equivalents of $35.4 million, consisting of interest-bearing money market accounts for which the fair market value would be affected by changes in the general level of U.S. interest rates. However, due to the short-term maturities and the low-risk profile of our investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our cash and cash equivalents. We are also exposed to interest rate risk relating to our convertible debt instruments. We carry these instruments at face value in our consolidated balance sheets. Since these instruments bear interest at fixed rates, we have no financial statement risk associated with changes in interest rates. However, the fair value of these instruments fluctuates when interest rates change. For additional details related to our debt, see Note 6, Long Term Debt to our condensed consolidated financial statements included in this report.

Foreign Currency Risk

The functional currency of our operations is the United States dollar. We conduct operations in the United Kingdom, as well as various parts of Europe, and as such we are exposed to foreign currency risk. Currently, we do not use foreign currency forward contracts to manage exchange rate risk, as the amount subject to foreign currency risk has no material impact to our overall operations and results.

Item 4.

Controls and Procedures

(a) Evaluation of disclosure controls and procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in change SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Our disclosure controls and procedures have been designed to meet reasonable assurance standards. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

(b) Changes in internal control over financial reporting

During the period covered by this Quarterly Report on Form 10-Q, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 1.

Legal Proceedings

We are not currently subject to any material legal proceedings, nor, to our knowledge, any material legal proceeding threatened against us or any of our officers or directors in their capacity as such.

Item 1A.

Risk Factors

Our operations and financial results are subject to various risks and uncertainties including those described below. You should carefully consider the risks and uncertainties described below, in addition to the other information contained in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we faced. Additional risks and uncertainties that we are unaware of, or that we currently believed are not material, may also become important factors that adversely affect our business. If any of the following risks or other not specified below materialize, our business financial condition and results of operations could be materially and adversely affected. In that case, the trading price of our ordinary shares could decline.

As used in the risks described in this subsection, references to “the company,” “Rockley,” “we,” “us,” and “our,” are intended to refer to the business and operations of Rockley prior to the Business Combination and the business and operations of HoldCo as directly or indirectly affected by Rockley by virtue of HoldCo’s ownership of Rockley following the Business Combination, unless the context clearly indicates otherwise.

Risks Related to Rockley’s Business and Industry

Rockley has incurred net losses since inception and expects to continue to incur losses for the foreseeable future. If Rockley does not fully develop or commercialize its products and services, including its silicon photonics chipsets, or if such products and services experience significant delays, Rockley’s business, financial condition, and results of operation will be materially and adversely affected and Rockley may never achieve or sustain profitability.

Rockley has to date generated revenue primarily from non-recurring engineering (“NRE”) and development services for customer-specific designs of silicon photonics chipsets for incorporation into its customers’ end products. Rockley incurred a net loss of $30.6 million and $95.3 million for the three and six months ended June 30, 2021, respectively. As of June 30, 2021, Rockley had an accumulated deficit of $328.2 million. Rockley believes that it will continue to incur operating and net losses for the foreseeable future, including for a period of time after commercialization of its silicon photonics chipsets, which is not currently expected to begin until 2022; provided that any such commercialization may occur later than 2022 or not at all. Even if Rockley is able to successfully develop and sell its products, there can be no guarantee that it will do so within its anticipated timeframe or that its products will be commercially successful. Rockley’s potential future profitability is dependent upon the successful development, commercial introduction, and acceptance of its products and services, including its silicon photonics chipsets for the consumer wearables market and its module applications with biomarker detection capabilities for advanced health metrics. Because Rockley will incur costs to develop and commercialize its products and services, including its chipsets and module applications, before it receives any significant revenue from any sales of such products or services, Rockley’s losses in future periods may continue. Rockley may never achieve or sustain profitability.

Rockley expects to continue to incur operating losses for the foreseeable future as it:

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continues to invest in its technology and its silicon photonics chipsets and modules, as well as its cloud-based analytics subscription service;

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continues to develop innovative solutions and applications for its technology;

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commercializes its silicon photonics solutions;

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continues to invest in its sales and marketing activities and distribution channels;

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invests and improves its operational, financial, and management information systems;

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increases its headcount;

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expands its intellectual property portfolio; and

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enhances internal functions, systems, and infrastructure to support its anticipated transition to a public company.

Rockley has a history of recurring losses and negative cash flows from operations, and a significant accumulated deficit, which raises substantial doubt about its ability to continue as a “going concern.”

Since inception, Rockley has financed its operations primarily through the issuance and sale of convertible loan notes, ordinary shares and revenue received from agreed-upon projects. As of June 30, 2021, Rockley’s cash and cash equivalents balance was $35.4 million and it had an accumulated deficit of $328.2 million. Due to Rockley’s history of recurring losses from operations, negative cash flows from operations, and a significant accumulated deficit, its management concluded that there is substantial doubt about Rockley’s ability to continue as a going concern. There have been no adjustments to the accompanying financial statements of Rockley to reflect this uncertainty. Rockley’s ability to continue as a going concern is dependent upon it becoming profitable in the future or obtaining the necessary capital to meet its obligations. Rockley’s determination of substantial doubt about its ability to continue as a going concern could materially limit its ability to raise additional funds through the issuance of equity securities, debt financing or otherwise. There can be no assurance that any such issuance of equity securities, debt financing or other means of financing will be available in the future, or the terms of any such financing will be acceptable to Rockley. Further, there can be no assurance that Rockley will ever become profitable or continue as a going concern.

If the end products into which Rockley’s products are incorporated are not fully developed and commercialized or do not achieve widespread market acceptance, or if such products experience delays, cancellations, or reductions, Rockley’s business, financial condition, and results of operations will be materially and adversely affected.

Rockley’s success in developing and commercializing its products depends in large part on its customers’ success in developing, commercializing, and achieving widespread market acceptance of their end products that incorporate Rockley’s products. Rockley’s customers may be unable to fully develop and commercialize, or achieve widespread market acceptance of, their end products that incorporate Rockley’s products. Further, these customers may not continue to incorporate Rockley’s products into their end products either in the short or long term. If such customers’ end products are not fully developed and commercialized, fail to achieve or maintain widespread market acceptance, experience delays, or if Rockley’s customers otherwise choose not incorporate Rockley’s products into their end products, Rockley’s business, financial condition, and results of operations will be materially and adversely affected.

If Rockley’s products are not selected for inclusion in its customers’ end products, including products for the consumer health and wellness market, or adopted in other industry verticals or use cases or are not adopted by leading consumer and medical device companies, life sciences companies, or their respective suppliers, Rockley’s business will be materially and adversely affected.

Rockley is currently developing products for use in its customers’ end products, which are in varying stages of development. Many of these products, including products for consumer device, medical device, and life sciences companies, require extensive testing or qualification processes, which involve testing of Rockley’s products in the customers’ end products and systems, as well as testing for reliability. These qualification processes may continue for several months or longer. However, qualification of any of Rockley’s products by a customer does not assure any sales of such product by Rockley to that customer. Even after successful qualification and sales by Rockley of a product to a customer, a subsequent revision in Rockley’s third-party contractors’ manufacturing process or Rockley’s selection of a new supplier may require a new qualification process with Rockley’s customers, which may result in delays in the sale of such product and could also result in Rockley holding excess or obsolete inventory. After Rockley’s products are qualified, it can take several months before the customer commences production of end products that incorporate Rockley’s products. Rockley spends significant time and resources to have its products selected for incorporation into these end products, which is known as a “design win.” If Rockley fails to win a significant number of design wins in its target markets, its business, results of operations, and financial condition will be materially and adversely affected.

Rockley is targeting the deployment of its products in the consumer health and wellness and medical device sectors and forecasts of Rockley’s future results contained in this quarterly report on Form 10-Q assume that Rockley will successfully commercialize its products and achieve significant market penetration in these sectors. As a result, if Rockley’s products are not selected for inclusion by consumer device and medical device companies or life sciences companies, or their suppliers, Rockley’s actual results may differ materially from the Company’s forecasts and projections and Rockley’s business would be materially and adversely affected.

Rockley’s limited operating history makes it difficult to evaluate its future prospects and the risks and challenges which may impact its business.

Rockley was founded in 2013, completed development of its advanced sensing platform in 2019, launched its healthcare module offering in 2020, and has not yet fully developed and commercialized any of its products. This relatively limited operating history makes it difficult to evaluate Rockley’s future prospects and the risks and challenges it may encounter. The risks and challenges which may impact Rockley’s future prospects and business include, but are not limited to, its ability to:

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successfully commercialize its products and services, including its silicon photonics chipsets, module applications, and analytics subscription service;

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develop innovative applications for its silicon photonics and sensing technology;

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expand its sales and marketing activities and distribution channels;

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improve its operational, financial, and management information systems;

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attract, hire, integrate, and retain qualified talent to support the growth of its business. This includes increasing headcount to appropriately staff to projected growth;

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protect its intellectual property portfolio;

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enhance internal, systems, functions, and infrastructure to support its anticipated transition to a public company;

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comply with existing and new or modified laws and regulations applicable to its business;

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manage capital expenditures for its current and future products, as well as its supply chain and supplier relationships;

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anticipate and respond to macroeconomic changes and changes in the markets in which it operates;

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effectively manage its growth and business operations, including the impacts of the COVID-19 pandemic on its business; and

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hire, integrate, and retain qualified talent to support the growth of its business.

If Rockley fails to successfully manage the risks and difficulties that it faces, including those associated with the challenges listed above and those described elsewhere in this “Risk Factors Related to Rockley’s Business and Industry” section, its business, financial condition, and results of operations could be materially and adversely affected. Further, because Rockley has a limited operating history and has not yet commercialized its products, it is difficult to accurately assess its future prospects or financial performance. Rockley has encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries. If Rockley’s assumptions regarding these risks and uncertainties, which it uses to plan and operate its business, are incorrect or change, or if it does not address these risks successfully, its results of operations could differ materially from its expectations and its business, financial condition, and results of operations could be materially and adversely affected.

Rockley’s forecasts and projections are based upon assumptions, analyses, and internal estimates developed by Rockley’s management. If these assumptions, analyses, or estimates prove to be incorrect or inaccurate, Rockley’s actual operating results may differ materially from those forecasted or projected.

Rockley’s forecasts and projections are subject to uncertainty and are based on assumptions, analyses, and internal estimates developed by Rockley’s management, all or some of which may not prove to be correct or accurate. If these assumptions, analyses, or estimates, including, but not limited to, those related to estimated revenue, production costs, operating expenses, and cash utilization, prove to be incorrect or inaccurate, Rockley’s actual operating results may differ materially from those forecasted or projected. We have in the past experienced actual results which varied from our estimates. These assumptions, analyses, or estimates are subject to risks and uncertainties, some of which are outside of Rockley’s control. These risks and uncertainties include, but are not limited to, risks discussed elsewhere in this “Risk Factors Related to Rockley’s Business and Industry” section and in this quarterly report on Form 10-Q, as well as those discussed below:

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Revenue-related assumptions:

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Customer contracts and design wins: Rockley’s existing memoranda of understanding (“MOUs”) and development contracts may not ultimately convert into production contracts. In addition, Rockley may be unable to secure design wins from additional customers in a timely manner;

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Form of customer arrangement: It is possible that instead of entering into agreements with customers for the purchase of a significant amount of Rockley’s products, Rockley may be required to enter into license arrangements with certain customers, any of which would have a significant impact on the revenue Rockley has currently forecasted to achieve;

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Timing of launch and delivery: Rockley or Rockley’s customers may encounter delays in the launch or delivery of Rockley’s product or the customer’s end product incorporating Rockley’s product, including due to a customer’s decision to delay the launch of a product, Rockley’s ability to deliver its product in a timely manner to a customer, which in turn may result in the customer canceling a contract, technical challenges, or customer-related delays in its development program;

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Pricing and volume fluctuation: Rockley may experience pricing and volume fluctuations due to price negotiations, lower than anticipated unit volumes, delays in volume ramp, decreases in average selling prices due to competition or market dynamics, or other factors; and

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Timing and execution of customer agreements: Rockley may face difficulties in meeting customer milestones in a timely manner or achieving required technical specifications. In addition, Rockley may experience execution delays under its NRE programs, including with its largest customer, due to resource constraints or customer delay. Further, to the extent Rockley were to enter into licensing arrangements in lieu of a product sale with a customer, including its largest customer, it could have a significant negative impact on Rockley’s anticipated revenue.

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Production cost-related assumptions:

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Production volume and ramp: Rockley has in the past, and may in the future experience delays in contract execution, lower than expected manufacturing yields, manufacturing delays, and technical challenges, including if and when Rockley commences commercial production of its products, any of which could negatively impact forecasted production volume and ramp;

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Production cost: Rockley may be unable to secure the volume pricing or yield cost levels underlying its assumptions and indirect materials and production overhead costs may exceed forecasted amounts; and

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Inventory and obsolescence: Rockley’s quality, warranty, return merchandise authorization, and inventory obsolescence may exceed forecasted amounts. Rockley may also experience product recalls which are not included in Rockley’s assumptions. Further, Rockley may incur greater than expected costs in connection with its NRE programs.

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Operating expenses and cash utilization-related assumptions: Rockley’s cash utilization may exceed currently anticipated rates due to a variety of factors, including lower than expected revenue, revenue delays, higher than anticipated production and manufacturing costs, operating expenses, and capital expenditures, lower than anticipated average selling prices, greater than anticipated cash needs for internal resources and organic growth, and potential strategic investments and acquisitions not currently anticipated.

The Company’s forecasts and projections also include forecasts and estimates relating to the expected size and growth of the markets in which Rockley operates or intends to enter, including the consumer wearables, mobile device, and medical device markets. Such markets may not develop or grow, or may develop and grow at a lower rate than expected, and even if these markets experience the forecasted growth described in this quarterly report on Form 10-Q, Rockley may not grow its business at similar rates, or at all. Accordingly, the forecasts and estimates of market size and growth described in this quarterly report on Form 10-Q should not be taken as a guarantee or other indication of Rockley’s future growth or results of operations. In addition, these forecasts may be materially and adversely affected by a number of factors outside of Rockley’s control, including, but limited to, factors associated with the ongoing COVID-19 pandemic.

The strategic initiatives Rockley has undertaken or may undertake in the future may be more costly than currently anticipated and Rockley may not generate sufficient revenue to offset the costs of these initiatives, which in turn would negatively impact Rockley’s ability to achieve and maintain profitability.

Rockley continues to invest in initiatives designed to grow its business, including:

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partnering with customers and potential customers to develop and commercialize Rockley’s products;

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investing in research and development;

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investing in its workforce, including its engineering talent;

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expanding its sales, marketing, and distribution efforts;

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investing in new applications and markets for its products;

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partnering with third-parties to develop manufacturing processes; and

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investing in legal, accounting, and other administrative and internal functions necessary to support its operations as a public company.

These initiatives may be more costly than anticipated and Rockley may not generate sufficient revenue to offset the costs of these initiatives. Certain of Rockley’s market opportunities, such as healthcare monitoring devices incorporating sensing capabilities for disease detection and management, are at an early stage of development, and it may be years before these end markets generate demand for Rockley’s products at scale, if at

all. Rockley’s revenue may be adversely affected for a number of reasons, including the rate and degree of development or market acceptance of new technology that competes with its products, failure of Rockley’s customers to develop and commercialize their end products that incorporate Rockley’s products, Rockley’s inability to effectively manage production of its products to scale, Rockley’s inability to enter new markets or help its customers adopt Rockley’s products for new applications, and Rockley’s failure to attract new customers or expand orders from existing customers. Further, it is difficult to predict the size and growth rate of Rockley’s target markets, customer demand for its products, commercialization timelines, developments in silicon photonics technology, the entry of competitive products, or the success of existing competitive products and services. As a result, Rockley does not expect to achieve profitability until 2023 at the earliest. If Rockley’s revenue does not grow over the short or long term, its ability to achieve and maintain profitability will be adversely affected, and the value of its business may significantly decrease.

Rockley expects its results of operations to fluctuate on a quarterly and annual basis, which could cause the Company’s share price to fluctuate or decline.

Rockley’s revenue and operating results have fluctuated in the past and may vary significantly in the future. Historical comparisons of its operating results may not be relevant, or indicative of future results. In particular, because Rockley’s revenue to date has been generated from NRE and development services for customer-specific designs of silicon photonics chipsets for testing in the customers’ end products, revenue in any given quarter or period can fluctuate based on the timing and success of its customers’ development projects. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. Rockley’s quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of its control and may not fully reflect the underlying performance of Rockley’s business. These fluctuations could adversely affect Rockley’s ability to meet its expectations or those of securities analysts, ratings agencies, or investors. If Rockley does not meet these expectations for any reporting period, the value of its business and its securities, could decline significantly. Factors that may cause these quarterly fluctuations include, but are not limited to, those listed below:

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the timing and magnitude of NRE services revenue in any quarter;

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the timing and magnitude of operating expenses incurred, including research and development expenses;

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Rockley’s ability to meet product development roadmaps and timelines, which in turn may be impacted by resource constraints and must meet certain technical standards;

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the timing and degree of success of commercialization of Rockley’s products;

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Rockley’s ability to attract and retain customers and successfully transition customers with which it is engaged in discussions to contracted customers with whom it has MOUs or development and supply agreements and to attract new customers;

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changes in terms of customer agreements;

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the ability of Rockley’s customers to commercialize and achieve widespread market adoption of products incorporating Rockley’s products;

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the timing and magnitude of orders and shipments of Rockley’s products in any quarter;

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the mix of product sales and licensing arrangements in lieu of product sales;

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the actual timing and magnitude of sales returns and warranty claims of Rockley’s products in any quarter may differ from estimate;

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Rockley’s ability to develop, introduce, commercialize, manufacture, and ship in a timely manner products that meet customer requirements;

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disruptions in Rockley’s sales channels or termination of its relationships with key channel partners;

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customer demand and product life cycles;

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the receipt, reduction, or cancellation of, or changes in the forecasts or timing of, orders by customers;

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fluctuations in the levels of inventories held by distributors or end customers;

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the gain or loss of significant customers, including Rockley’s largest customer;

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fluctuations in sales by customers who incorporate Rockley’s products into their products;

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cyclicality, seasonality, and the competitive landscape in Rockley’s target markets;

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fluctuations in manufacturing yields;

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changes in pricing, product cost, product volume, and product mix;

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sales of subscriptions to Rockley’s cloud-based analytics subscription service, if and when commercially launched, and in the future, the rate of renewal of subscriptions by existing customers, the extent the use of subscription offerings and related services is expanded under such subscriptions, and timing and magnitude of any such subscriptions which are not renewed;

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the mix of customers licensing the service on a subscription basis as compared to a perpetual license;

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the size, timing, and terms of its subscription agreements with new customers;

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supply chain disruptions, delays, shortages, and capacity limitations as a result of the COVID-19 pandemic or other reasons;

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the impact and duration of the global COVID-19 pandemic;

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the timing and rate of broader market adoption of consumer and medical devices utilizing Rockley’s products or technology across the consumer wearables, mobile device, and medical device sectors;

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changes in the competitive landscape in Rockley’s target markets, including industry consolidation, regulatory developments, and new market entrants;

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Rockley’s ability to effectively manage its third-party suppliers and manufacturing partners;

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changes in the source, cost, and availability of materials and components incorporated in Rockley’s products;

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adverse litigation, judgments, settlements or other litigation-related costs, or claims that may give rise to such costs;

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general economic, industry, and market conditions, including trade disputes; and

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Rockley’s forecasts of market growth in this quarterly report on Form 10-Q may not be accurate.

Rockley expects to incur significant research and development expenses and devote substantial resources to commercializing new products, which could increase its losses and negatively impact its ability to achieve or maintain profitability.

Rockley’s future growth depends on developing and commercializing its products, achieving widespread market adoption of its products, adapting existing products to new applications and customer requirements, and introducing new products to address changing customer and market demands. Rockley plans to incur substantial research and development expenses as part of its efforts to design, develop, manufacture, and commercialize new products and enhance existing products. Rockley’s research and development expenditures could increase its losses and adversely affect its results of operations in the future.

Further, Rockley’s research and development efforts may not be successful or result in additional revenue. This in turn would negatively impact Rockley’s ability to achieve or maintain profitability.

If Rockley is unable to manage its growth or expansion of operations, including in a cost-efficient manner, its business, operations, and financial condition, as well as its ability to scale its operations, could be materially and adversely affected.

Rockley’s ability to effectively manage its anticipated growth and expansion of operations and manage its transition to operating as a public company will also require it to enhance its operational, financial, and management controls and infrastructure, human resources policies, and reporting systems. These enhancements and improvements will require significant capital expenditures, investments in additional headcount and other operating expenditures, and allocation of valuable management and employee resources. Rockley’s future financial performance and ability to execute on its business plan will depend, in part, on its ability to effectively manage any future growth and expansion. Rockley may be unable to effectively manage any future growth or expansion in an efficient or timely manner. Further, Rockley may not be able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, systems, and procedures, which could have an adverse effect on its business, reputation, and financial results.

Market opportunity estimates and growth forecasts included in this quarterly report on Form 10-Q are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.

The forecasts and estimates in this quarterly report on Form 10-Q relating to the expected size and growth of the markets for consumer wearables, mobile devices, and medical devices may prove to be inaccurate. Even if these markets experience the forecasted growth described in this quarterly report on Form 10-Q, Rockley may not grow its business at similar rates, or at all. Rockley’s future growth is subject to many factors, including market adoption of its products, which is subject to many risks and uncertainties. Accordingly, the forecasts and estimates of market size and growth described in this quarterly report on Form 10-Q, including Rockley’s estimates that the consumer wearables, mobile device, and medical devices markets will represent, in the aggregate, an approximately over $48 billion of total addressable market for healthcare monitoring devices incorporating additional sensing capabilities by 2025, should not be taken as indicative of Rockley’s future growth. In addition, these forecasts may be materially and adversely affected as a result of the COVID-19 pandemic.

If Rockley is unable to accurately forecast long-term end-customer adoption rates and demand for Rockley’s products, it could materially and adversely affect its current and future financial results of operations.

Rockley is pursuing opportunities in markets that are undergoing rapid changes, including technological and regulatory changes, and it is difficult to predict the timing and size of the opportunities. For example, consumer health and wellness applications and healthcare monitoring devices require complex technology. Because these products may incorporate technology from other companies, commercialization of these products could be delayed or impaired on account of certain technological components of Rockley or others not being ready to be deployed. Although Rockley currently has MOUs or development and supply agreements with various consumer and medical device companies, these companies may not be able to commercialize products incorporating Rockley’s products immediately, or at all. Regulatory developments, many of which are outside of Rockley’s control, could also cause delays or otherwise impair commercial adoption of these products. Rockley’s future financial performance will depend on its ability to make timely investments in the correct market opportunities. Given the evolving nature of the markets in which Rockley operates in, it is difficult to predict customer demand or adoption rates for its products or the future growth of the markets in which it operates. As a result, the Company’s financial projections may not necessarily reflect various estimates and assumptions that may not prove accurate and these projections could differ materially from actual results due to the risks included in this “Risk Factors Related to Rockley’s Business and Industry” section, among others. If demand does not develop or if Rockley cannot accurately forecast customer demand, the size of its markets, inventory requirements, or its future financial results, its business, results of operations, and financial condition will be adversely affected.

Rockley’s target customer and product markets may not grow or develop as Rockley currently expects, and if Rockley fails to penetrate new markets and scale successfully within those markets, Rockley’s revenue and financial condition would be harmed.

Rockley’s target markets include the consumer wearables, mobile device, and medical device markets. Any deterioration in Rockley’s target customer or product markets or reduction in capital spending to support these markets could lead to a reduction in demand for Rockley’s products, which would adversely affect its revenue and results of operations. Further, if Rockley’s target customer markets do not grow or develop in ways that Rockley currently forecasts, demand for Rockley’s products may not materialize as expected, which would also negatively impact its business, financial condition, and results of operations. Rockley may be unable to predict the timing or development of trends in its target markets with any accuracy. If Rockley fails to accurately predict market requirements or market demand for these solutions, Rockley’s business may suffer.

Rockley’s future revenue growth, if any, will depend in part on Rockley’s ability to penetrate Rockley’s current target markets, and to enter emerging markets, such as the market for consumer healthcare monitoring devices and predictive analytics. Meeting the technical requirements and securing design wins in any of these new markets will require a substantial investment of Rockley’s time and resources. Rockley may not secure design wins from these or other new markets, or achieve meaningful revenue from sales in these markets. If any of these markets do not develop as Rockley currently anticipates or if Rockley is unable to penetrate and scale them successfully, it may adversely affect Rockley’s ability to grow its business.

Rockley’s target markets are characterized by rapid technological change, which requires Rockley to continue to develop new products and technology innovations and could adversely affect market adoption of its products.

Rapid technological changes in the markets for sensing technology, including the consumer wearables, mobile device, and medical device markets, could adversely affect adoption of Rockley’s products, either generally or for particular applications. Rockley’s future success will depend upon its ability to develop and introduce a variety of new capabilities and innovations to its products, as well as introduce new products, to address the changing needs of its target markets. Delays in delivering new products that meet customers’ requirements could damage Rockley’s relationships with its customers and lead them to seek alternative sources of supply. Further, the introduction of new products by Rockley’s competitors, the delay or cancellation of any of Rockley’s customers’ end products into which Rockley’s products are designed, the market acceptance of products based on new or alternative technologies, or the emergence of new industry standards could render Rockley’s existing or future products uncompetitive, obsolete, and/or otherwise unmarketable.

In addition, Rockley’s success to date has been based on the delivery of prototypes and services to research and development programs in which customers are investing substantial capital to develop new products. Delays in introducing products and innovations, the failure to choose correctly among technical alternatives, or the failure to offer innovative products at competitive prices may cause existing and potential customers to purchase Rockley’s competitors’ products or turn to alternative sensing technology. If Rockley is unable to successfully develop products that meet changing customer or market requirements on a timely basis or that remain competitive with technological alternatives, its products may fail to achieve commercial adoption, its revenue will decline, it may experience operating losses, and its business and prospects will be adversely affected.

Rockley may be unable to make the substantial investments that are required to remain competitive.

The silicon photonics industry requires substantial and continuous investment in research and development in order to bring to market new and enhanced solutions. Rockley expects its research and development expenditures to increase in the future as part of its strategy to increase demand for Rockley’s solutions in Rockley’s current target markets and to expand into additional markets. Rockley may not have sufficient resources to maintain the level of investment in research and development required to remain competitive. In addition, Rockley cannot assure you that the technologies, that are the focus of its research and development expenditures will become commercially successful or generate any revenue.

If Rockley fails to compete effectively, it may lose or fail to gain market share, which could negatively impact Rockley’s operating results and Rockley’s business.

The global optical components market in general, and the consumer sensor, healthcare, and data communications markets in particular, are highly competitive. Rockley expects competition to increase and intensify as additional companies enter Rockley’s target markets. Increased competition could result in price pressure, reduced gross margins, and difficulty achieving market penetration, any of which could harm Rockley’s business, financial condition, and results of operations. Rockley’s competitors range from large, international companies offering a wide range of services and optical components, such as LEDs, lasers, detectors, or photonic integrated circuit (“PICs”), to smaller companies specializing in narrow market verticals. Some of Rockley’s key competitors across various verticals include: ams AG (“AMS”), Analog Devices, Inc. (“ADI”), Broadcom Inc. (“Broadcom”), Brolis Semiconductors (“Brolis”), Cisco Systems, Inc. (“Cisco”), GlobalFoundries Inc. (“GlobalFoundries”), Intel Corporation (“Intel”), Lumentum Holdings Inc. (“Lumentum”), Maxim Integrated Products Inc. (“Maxim”), Osram Licht AG (“OSRAM”), Taiwan Semiconductor Manufacturing Company, Limited (“TSMC”), and Tower Semiconductor Ltd. (“Tower Jazz”). Rockley expects competition in its target markets to increase in the future as existing competitors improve or expand their product offerings and as new competitors enter these markets.

Rockley’s ability to compete successfully depends, in part, on factors that are outside of its control, including industry and general economic trends. Rockley’s ability to compete successfully will depend on a number of factors, including its ability to:

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define, design, and regularly introduce new products that anticipate the functionality and integration needs of Rockley’s customers’ next-generation products and applications;

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build strong and long-lasting relationships with Rockley’s customers and other industry participants;

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cost-effectively develop and commercialize products which compete favorably with competitors’ products;

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achieve design wins;

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accurately estimate the effectiveness and success of Rockley’s customers’ end products incorporating Rockley’s products in their competitive end markets;

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expand its research and development capabilities to provide innovative solutions and maintain Rockley’s product roadmap;

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strengthen its sales and marketing efforts, brand awareness and reputation;

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deliver products in volume on a timely basis at competitive prices;

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withstand or respond to significant price competition;

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build and expand international operations in a cost-effective manner;

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obtain, maintain, protect, and enforce Rockley’s intellectual property rights;

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defend potential patent infringement claims arising from third parties;

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promote and support Rockley’s customers’ incorporation of Rockley’s products into their products; and

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retain high-level talent, including Rockley’s management team and engineers.

Rockley’s competitors may also establish cooperative relationships among themselves or with third parties or may acquire companies that provide similar products to Rockley’s. As a result, new competitors or alliances may emerge that could capture significant market share. Any of these factors, alone or in combination with others, could harm Rockley’s business, financial condition, and results of operations and result in a loss of market share and an increase in pricing pressure.

Rockley may pursue strategic investments or acquisitions in the future. If Rockley fails to successfully select, execute, or integrate its acquisitions, then its business, results of operations, and financial condition could be materially and adversely affected, and the Company’ s share price could decline.

From time to time, Rockley may pursue investments or acquisitions to add new products and technologies, acquire talent, gain new sales channels, or enter into new markets or sales territories. In addition to possible shareholder approval, Rockley may need approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay and costs. Furthermore, acquisitions and the subsequent integration of new assets, businesses, key talent, customers, vendors, and suppliers require significant attention from Rockley’s management and could result in a diversion of resources from Rockley’s existing business, which in turn could have an adverse effect on Rockley’s operations. Acquired assets or businesses may not generate the financial results Rockley expects. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets, and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.

Failure to successfully identify, complete, manage, and integrate acquisitions could materially and adversely affect its business, financial condition, and results of operations and could cause the Company’s share price to decline.

Rockley’s international operations expose it to operational, financial, and regulatory risks, including possible unfavorable regulatory, political, tax, and labor conditions, which could harm Rockley’s business.

Rockley is committed to growing its international sales, and while it has committed resources to expanding its international operations and sales channels, these efforts may not be successful. International operations are subject to a number of other risks, including:

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foreign currency fluctuations, which could result in increased operating expenses and reduced revenue;

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political and economic instability, international terrorism, and anti-American or British sentiment, particularly in emerging markets;

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disadvantages of competing against companies from countries that are not subject to U.S. and U.K. laws and regulations, including the Foreign Corrupt Practices Act, Office of Foreign Assets Control regulations, and U.S. anti-money laundering regulations, as well as exposure of Rockley’s foreign operations to liability under these regulatory regimes;

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preference for locally branded products, and laws and business practices favoring local competition;

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potential consequences of, and uncertainty related to, the “Brexit” process in the United Kingdom, which could lead to additional expense and complexity in doing business there;

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less effective protection of intellectual property;

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stringent regulation of the end products incorporating Rockley’s products and stringent consumer protection and product compliance regulations, including but not limited to General Data Protection Regulation in the European Union, European competition law, the Restriction of Hazardous Substances Directive, the Waste Electrical and Electronic Equipment Directive, and the European Ecodesign Directive that are costly to comply with and may vary from country to country;

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difficulties and costs of staffing and managing foreign operations;

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foreign taxes, including withholding of payroll taxes; and

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the U.S. government’s and U.K. government’s restrictions on certain technology transfer to certain countries of concern.

For example, Rockley has significant international operations that are denominated in foreign currencies, primarily the British Pound and Euro, subjecting it to foreign currency exchange risk that may adversely impact its financial results. The occurrence of any of these risks could negatively affect Rockley’s international business and consequently its business, operating results, and financial condition.

The average selling prices of Rockley’s products could decrease rapidly over the life of the product, which may negatively affect Rockley’s revenue and margins. In addition, the selling prices Rockley is able to ultimately charge in the future for the products it is currently developing or commercializing may be less than what Rockley currently projects, which may cause Rockley’s actual operating results to differ materially from its projections.

The prices that Rockley is able to ultimately charge in the future for the products it is currently developing or commercializing may experience declines for a variety of reasons, many of which are outside of Rockley’s control. In order to sell products that have a falling average unit selling price and maintain margins at the same time, Rockley will need to continually reduce product and manufacturing costs. To manage manufacturing costs, Rockley must engineer the most cost-effective design for its products and collaborate with its manufacturing counterparties to reduce manufacturing costs. Rockley also needs to continually introduce new products with higher sales prices and gross margin in order to maintain its overall gross margin. If Rockley is unable to manage the cost of older products or successfully introduce new products with higher gross margin, its revenue and overall gross margin would likely decline. In addition, the selling prices Rockley is able to ultimately charge in the future for the products it is currently developing or commercializing may be less than what Rockley currently projects, which may cause Rockley’s actual operating results to differ materially from its forecasts and projections.

Rockley’s gross margins may fluctuate due to a variety of factors, which could negatively impact Rockley’s results of operations and Rockley’s financial condition.

Rockley’s gross margins may fluctuate due to a number of factors, including customer and product mix, market acceptance of Rockley’s new products, yield, wafer pricing, packaging and testing costs, competitive pricing dynamics, the

impact of the COVID-19 pandemic, and geographic and market pricing strategies. To the extent Rockley may offer certain customers favorable prices, it would decrease Rockley’s average selling prices and likely impact gross margins. Further, Rockley may in the future offer pricing incentives to Rockley’s customers on earlier generations of products that inherently have a higher cost structure, which would negatively affect Rockley’s gross margins. In addition, in the event Rockley’s customers, including Rockley’s larger customers, exert more pressure with respect to pricing and other terms, it could put downward pressure on Rockley’s margins.

Because Rockley does not operate its own manufacturing, assembly, or testing facilities, it may not be able to reduce its costs as rapidly as companies that operate their own facilities, and Rockley’s costs may even increase, which could further reduce Rockley’s gross margins. Rockley relies primarily on obtaining yield improvements and volume-based cost reductions to drive cost reductions. To the extent that such cost reductions do not occur at a sufficient level and in a timely manner, Rockley’s business, financial condition, and results of operations could be adversely affected and may vary from Rockley’s projections and estimates.

In addition, Rockley may in the future maintain an inventory of Rockley’s products at various stages of production and in finished goods inventory. Rockley will hold these inventories in anticipation of customer orders. If those customer orders do not materialize in a timely manner, Rockley may have excess or obsolete inventory which Rockley would have to reserve or write-down, and Rockley’s gross margins would be adversely affected.

Because some of the raw materials and key components in its products come from limited or single source suppliers, Rockley is susceptible to supply shortages, long lead times for components, and supply changes, including as a result of industry consolidation, any of which could disrupt its supply chain and could delay deliveries of its products to customers, which could adversely affect Rockley’s business, results of operations, and financial condition.

Some of the components used in the manufacturing of Rockley’s products are sourced from third-party suppliers. To date, Rockley has produced its products in relatively limited quantities for use in products. Rockley does not have extensive experience in managing its supply chain to manufacture and deliver its products at scale. Some of the key components used to manufacture Rockley’s products come from limited or single source suppliers. Rockley is therefore subject to the risk of shortages and long lead times in the supply of these components and the risk that its suppliers discontinue or modify components used in its products. Rockley has a global supply chain and the COVID-19 pandemic and other health epidemics and outbreaks may adversely affect its ability to source components in a timely or cost effective manner from its third-party suppliers due to, among other things, work stoppages or interruptions. For example, Rockley relies on third-party foundries to manufacture its silicon photonic integrated circuits and for wafer scale integration. Any disruptions to those foundries could materially and adversely affect Rockley’s ability to manufacture its products. In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules. Rockley has in the past experienced and may in the future experience component shortages and price fluctuations of certain key components and materials, and the predictability of the availability and pricing of these components may be limited. In the event of a component shortage, supply interruption or material pricing change from suppliers of these components, Rockley may not be able to develop alternate sources in a timely manner or at all in the case of sole or limited sources. These risks may be exacerbated if any of Rockley’s suppliers were to cease operations or be acquired by a third party. If this were to occur, Rockley may need to re-qualify the supplier and/or otherwise confirm that such an event would not cause concerns with Rockley’s end customers or otherwise negatively impact Rockley’s relationships with its end customers. Developing alternate sources of supply for these components may be time-consuming, difficult, and costly and Rockley may not be able to source these components on terms that are acceptable to it, or at all, which may undermine Rockley’s ability to meet its requirements or to fill customer orders in a timely manner. Any interruption or delay in the supply of any of these parts or components, or the inability to obtain these parts or components from alternate sources at acceptable prices and within a reasonable amount of time, would adversely affect Rockley’s ability to meet its scheduled product deliveries to its customers. This could adversely affect Rockley’s relationships with its customers and channel partners and could cause delays in shipment of its products and adversely affect its operating results. In addition, increased component costs could result in lower gross margins. Even where Rockley is able to pass increased component costs along to its customers, there may be a lapse of time before it is able to do so such that Rockley must absorb the increased cost. If Rockley is unable to buy these components in quantities sufficient to meet its requirements on a timely basis, it will not be able to deliver products to its customers. This in turn could materially and adversely affect Rockley’s business, financial condition, and results of operations.

If the foundries with which Rockley contracts do not achieve satisfactory yields or quality, Rockley’s reputation and customer relationships could be harmed.

Rockley depends on satisfactory wafer foundry manufacturing capacity, wafer prices, and production yields, as well as timely wafer delivery, to meet customer demand and enable it to maintain gross margins. The fabrication of Rockley’s products

is a complex and technically demanding process. Minor deviations in the manufacturing process can cause substantial decreases in yields and, in some cases, cause production to be suspended. Rockley’s foundry vendors may experience manufacturing defects and reduced manufacturing yields from time to time. Further, any new foundry vendors Rockley employs, whether due to industry consolidation, customer requirements, or otherwise, may present additional and unexpected manufacturing challenges that could require significant management time and focus. Changes in manufacturing processes or the inadvertent use of defective or contaminated materials by the foundries that Rockley employs could result in lower than anticipated

production yields or unacceptable performance of Rockley’s products. Many of these problems are difficult to detect at an early stage of the manufacturing process and may be time-consuming and expensive to correct. Poor production yields from the foundries that Rockley employs, or defects, integration issues, or other performance problems in Rockley’s products could significantly harm Rockley’s customer relationships and financial results, and give rise to financial or other damages to Rockley’s customers. Any product liability claim brought against Rockley, even if unsuccessful, would likely be time-consuming and costly to defend.

Manufacturing yields for new products initially tend to be lower as Rockley completes product development and commence volume manufacturing, and typically increase as Rockley brings the product to full production. While Rockley’s business model includes this assumption of improving manufacturing yields its assumptions may be incorrect and, as a result, material variances between projected and actual manufacturing yields will have a direct effect on Rockley’s gross margin and profitability. The difficulty of accurately forecasting manufacturing yields and maintaining cost competitiveness through improving manufacturing yields will continue to be magnified by the increasing process complexity of manufacturing silicon photonics products.

Raw material price fluctuations can increase the cost of Rockley’s products, impact Rockley’s ability to meet customer commitments, and may adversely affect its results of operations.

The cost of raw materials is a key element in the cost of Rockley’s products. Rockley’s inability to offset material price inflation through increased prices to customers, suppliers, productivity actions, or through commodity hedges could adversely affect Rockley’s results of operations. Many major components, product equipment items, and raw materials are procured or subcontracted on a single or sole-source basis. Although Rockley maintains a qualification and performance surveillance process and Rockley believes that sources of supply for raw materials and components are generally adequate, it is difficult to predict what effects shortages or price increases may have in the future. Rockley’s inability to fill its supply needs would jeopardize its ability to fulfill its contractual obligations, which could, in turn, result in reduced revenue, contract penalties or terminations, and damage to Rockley’s customer relationships.

Furthermore, increases in the price of wafers, testing costs, and commodities, which may result in increased production costs, mainly assembly and packaging costs, may result in a decrease in Rockley’s gross margins. Moreover, Rockley’s suppliers may pass the increase in raw materials and commodity costs onto it which would further reduce the gross margin of Rockley’s products. In addition, as Rockley is a fabless company, global market trends such as a shortage of capacity to fulfill Rockley’s fabrication needs also may increase Rockley’s raw material costs and thus decrease its gross margin.

Rockley is subject to the cyclical nature of the semiconductor industry.

The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product obsolescence, price erosion, evolving standards, short product life cycles, industry consolidation, and wide fluctuations in product supply and demand. The industry experienced significant downturns during past global recessions. These downturns have been characterized by diminished product demand, production overcapacity, high inventory levels, and accelerated erosion of average selling prices. While these downturns have not directly impacted Rockley’s business to date, any prolonged or significant downturn in the semiconductor industry could adversely affect Rockley’s business and reduce demand for Rockley’s products. Any future downturns in the semiconductor industry could also harm Rockley’s business, financial condition, and results of operations. Furthermore, any significant upturn in the semiconductor industry could result in increased competition for access to third-party foundry and assembly capacity. Rockley is dependent on the availability of this capacity to manufacture and assemble Rockley’s products and Rockley can provide no assurance that adequate capacity will be available to it in the future.

If Rockley or its suppliers do not maintain sufficient inventory or if they do not adequately manage their respective inventory, Rockley could lose sales or incur higher inventory-related expenses, which could negatively affect Rockley’s operating results.

To ensure adequate inventory supply, Rockley and its suppliers must forecast inventory needs and expenses, place orders sufficiently in advance with their respective suppliers and manufacturing counterparties, and manufacture products based on its

estimates of future demand for particular products. Changes in customer purchasing patterns may affect Rockley’s ability to forecast its future operating results, including revenue, gross margins, cash flows, and profitability. Rockley’s ability to accurately forecast demand for its products could be affected by many factors, including the growth rate, if any, in Rockley’s target markets or the market adoption of the end products into which Rockley’s products are incorporated, the emergence of new markets, an increase or decrease in customer demand for Rockley’s products or for products and services of its competitors, product introductions by competitors, the COVID-19 pandemic, other health epidemics and outbreaks, and any associated work stoppages or interruptions, unanticipated changes in general market conditions, and the weakening of economic conditions or consumer confidence in future economic conditions. If Rockley’s products are commercialized in markets that are quickly growing, including the consumer wearables, mobile device, and medical device markets, Rockley may face challenges acquiring adequate supplies to manufacture its products and/or Rockley and its manufacturing counterparties may not be able to manufacture its products at a rate necessary to satisfy the levels of demand, which would negatively affect Rockley’s revenue. This risk may be exacerbated by the fact that Rockley may not carry or be able to obtain for its manufacturers a significant amount of inventory to satisfy short-term demand increases. If it fails to accurately forecast customer demand, Rockley may experience excess inventory levels or a shortage of products available for sale.

Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would adversely affect Rockley’s financial results, including its gross margin, and have a negative effect on its brand. Conversely, if Rockley underestimates customer demand for its products, Rockley, or its manufacturing counterparties, may not be able to deliver products to meet its requirements, and this could result in damage to Rockley’s brand and customer relationships and adversely affect its revenue and operating results.

If Rockley’s products do not conform to, or are not compatible with, existing or emerging industry standards, demand for Rockley’s products may decrease, which in turn would harm Rockley’s business and operating results.

Rockley’s ability to compete in the future will depend on its ability to identify and ensure compliance with evolving industry standards in its target markets, as well as in the silicon photonics and sensing technology industry generally. The emergence of new industry standards could render Rockley’s products incompatible with products developed by third-party suppliers or make it difficult for Rockley’s products to meet the requirements of certain device manufacturers and their suppliers. If Rockley’s customers or Rockley’s third-party suppliers adopt new or competing industry standards with which Rockley’s solutions are not compatible, or if industry groups fail to adopt standards with which Rockley’s products are compatible, Rockley’s products would become less desirable to its current or prospective customers. As a result, Rockley’s sales would suffer and it could be required to make significant expenditures to develop new products. Although Rockley designs its products to be compliant with applicable industry standards, proprietary enhancements may not in the future result in conformance with existing industry standards under all circumstances. If Rockley’s products do not conform to, or are not compatible with, existing or emerging standards, it would harm its business, financial condition, and results of operations.

Rockley may be subject to warranty or product liability claims, which could result in unexpected expenses and loss of market share.

Rockley may be subject to warranty or product liability claims. These claims may require Rockley to make significant expenditures to defend those claims, replace Rockley’s solutions, refund payments, or pay damage

awards. Rockley has not yet commercialized its products. Accordingly, the operation of Rockley’s products and technology has not been validated over longer periods. If a customer’s end product fails in use, the customer may incur significant monetary damages, including a product recall or associated replacement expenses as well as lost revenue. The customer may claim that a defect in Rockley’s product caused the product failure and assert a claim against Rockley to recover monetary damages. The cost of defending these claims and satisfying any arbitration award or judgment with respect to these claims would result in unexpected expenses, which could be substantial, and could harm Rockley’s business, financial condition, and results of operations. Although Rockley carries product liability insurance, this insurance is subject to significant deductibles and may not adequately cover Rockley’s costs arising from defects in its products or otherwise.

The complexity of Rockley’s products and its anticipated future product and service offerings could result in unforeseen delays or expenses from undetected defects, errors, or reliability issues in hardware or software that could reduce the market adoption of its new products, damage its reputation with current or prospective customers, and adversely affect its operating costs.

Rockley’s current and future products and service offerings are or are expected to be highly technical and very complex and require high standards to manufacture or distribute and have in the past and will likely in the future experience defects, errors, or reliability issues at various stages of development. Rockley may be unable to timely release new products, product updates, manufacture existing products, correct problems that have arisen, or correct such problems to its customers’

satisfaction. Additionally, undetected errors, defects, or security vulnerabilities, especially as new products or updates are introduced or as new versions are released, could result in inaccurate data to the end users of products incorporating Rockley’s products. Any of the foregoing could negatively impact Rockley’s ability to commercialize a product or service offering, result in litigation against Rockley, and damage Rockley’s credibility. These risks may be heightened in the medical device industry, one of Rockley’s target markets, where the end user may act in reliance upon inaccurate data as a result of errors or defects, or where there may be a privacy or data breach of an end user’s personal health information. Some errors or defects in Rockley’s products and service offerings may only be discovered after they have been tested, commercialized, and deployed by customers. In these cases, Rockley may incur significant additional development costs and product recall, repair, or replacement costs. These problems may also result in claims, including class actions, against Rockley by its customers or others. Rockley’s reputation or brand may be damaged as a result of these problems and customers may be reluctant to buy its products, which could adversely affect its ability to retain existing customers and attract new customers and could adversely affect its financial results.

In addition to product liability claims, Rockley could face material legal claims for breach of contract, fraud, tort, or breach of warranty as a result of these problems. Defending a lawsuit, regardless of its merit, could be costly and may divert management’s attention and adversely affect the market’s perception of Rockley and its products. In addition, Rockley’s business liability insurance coverage could prove inadequate with respect to a claim and future coverage may be unavailable on acceptable terms or at all. These product-related issues could result in claims against Rockley and its business could be adversely affected.

Rockley currently expects to recognize subscription revenue from its future cloud-based analytics subscription offering ratably over the term of these subscriptions and, to a lesser extent, perpetual licenses ratably over an expected period of benefit and, as a result, downturns in sales may not be immediately reflected in its operating results.

If Rockley is able to commercially launch its cloud-based analytics subscription service, which is currently expected to occur as early as 2023, it expects to recognize revenue ratably over the terms of its subscriptions with customers. As a result, a substantial portion of the revenue that it will report in each period will be derived from the recognition of deferred revenue relating to agreements entered into during previous periods. Consequently, a decline in new sales or renewals in any one period may not be immediately reflected in its revenue results for that period. This decline, however, will negatively affect its revenue in future periods. Accordingly, the effect of

significant downturns in sales and market acceptance of its subscription service and potential changes in the rate of renewals may not be fully reflected in its results of operations until future periods. This will also make it difficult for Rockley to rapidly increase revenue growth through additional sales in any period, as revenue from new customers generally will be recognized over the term of the applicable agreement. Rockley may be unable to commercially launch its subscription service offering in a timely manner or at all and such subscription offering may not achieve widespread customer adoption.

Any decline in customer renewals, terminations, or failure to convince customers to use Rockley’s cloud-based analytics subscription service would harm its business, results of operations, and financial condition.

The rate at which Rockley’s customers purchase subscriptions to its cloud-based analytics service will depend on a number of factors, including the perceived value of the service. Rockley anticipates that its subscription offerings for enterprise customers will range from one to two years subject to renewal terms. Rockley’s ability to grow revenue from its cloud-based analytics subscription offering, if and when commercially launched, will depend on a significant percentage of customer renewals when the then-existing subscription terms expire, as well as renewals on the same or more favorable terms. Customers will have no obligation to renew their subscriptions, and Rockley may not be able to accurately predict customer renewal rates. The growth of Rockley’s business will depend in part on its customers adopting and expanding their use of Rockley’s cloud-based analytics subscription offering and related services. If Rockley’s customers do not maintain or renew their subscriptions or renew on less favorable terms, Rockley’s future business prospects and growth opportunities may suffer.

If Rockley’s future platform offerings do not interoperate with its customers’ network and security infrastructure or with third-party products, websites, or services, it would negatively impact its business and results of operations.

Rockley’s cloud-based analytics subscription offering, which is under development and is currently expected to be commercially launched as early as 2023, is expected to allow for the deployment of Rockley’s technology through a cloud-based software-as-a-service model. As a result, it must interoperate with Rockley’s customers’ existing network and security infrastructure. The components of Rockley’s customers’ infrastructure have different specifications, rapidly evolve, utilize multiple protocol standards, include multiple versions and generations of products, and may be highly customized. Rockley must be able to interoperate and provide its software service to customers with highly complex and customized networks, which requires careful planning and execution between its customers, its customer support teams, and its channel partners. Further,

whenever there are new or updated elements of the customers’ infrastructure or new industry standards or protocols, Rockley may have to update or enhance its cloud platform to continue to provide service to customers. Rockley’s competitors or other vendors may refuse to work with Rockley to allow their products to interoperate with Rockley’s, which could make it difficult for Rockley’s cloud-based analytics subscription service to function properly in customer networks that include these third-party products.

Rockley may not deliver or maintain interoperability quickly or cost-effectively, or at all. If Rockley fails to maintain compatibility of its cloud-based analytics subscription service with its customers’ network and security infrastructures, its customers may not be able to fully utilize the service, and Rockley may, among other consequences, fail to achieve widespread customer adoption of this subscription service and experience reduced demand for its products and services, which would materially harm its business, operating results, and financial condition.

Rockley licenses technology from third parties, and its inability to maintain those licenses could harm its business.

Rockley incorporates technology that it licenses from third parties, including software, into its software subscriptions. Rockley cannot be certain that its licensors are not infringing the intellectual property rights of

third parties or that its licensors have sufficient rights to the licensed intellectual property in all jurisdictions in which Rockley may sell its software subscriptions. In addition, some licenses may be non-exclusive, and therefore its competitors may have access to the same technology licensed to Rockley. Some of Rockley’s license agreements may be terminated for convenience by the licensors. Rockley may also be subject to additional fees or be required to obtain new licenses if any of its licensors allege that Rockley has not properly paid for such licenses or that it has improperly used the technologies under such licenses, and such licenses may not be available on terms acceptable to Rockley or at all. If Rockley is unable to continue to license any of this technology because of intellectual property infringement claims brought by third parties against its licensors or against it, or claims against Rockley by its licensors, or if Rockley is unable to continue its license agreements or enter into new licenses on commercially reasonable terms, its ability to develop and sell software subscriptions containing such technology would be severely limited, and its business could be harmed. Additionally, if Rockley is unable to license necessary technology from third parties, it may be forced to acquire or develop alternative technology, which it may be unable to do in a commercially feasible manner or at all, and Rockley may be required to use alternative technology of lower quality or performance standards. This would limit and delay its ability to offer new or competitive software subscriptions and increase its costs of production. As a result, Rockley’s margins, market share, and operating results could be significantly harmed.

Portions of Rockley’s cloud-based analytics subscription offering utilize open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect its business.

Rockley’s cloud-based analytics subscription offering contains software made available by third parties under so-called “open source” licenses. From time to time, there have been claims against companies that distribute or use open source software in their products and services, asserting that such open source software infringes the claimants’ intellectual property rights. Rockley could be subject to suits by parties claiming that what Rockley believes to be licensed open source software infringes their intellectual property rights. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. In addition, certain open source licenses require that source code for software programs that are subject to the license be made available to the public and that any modifications or derivative works to such open source software continue to be licensed under the same terms. Further, certain open source licenses also include a provision that if Rockley enforces any patents against the software programs that are subject to the license, it will lose the license to such software. If Rockley were to fail to comply with the terms of such open source software licenses, such failures could result in costly litigation, lead to negative public relations, or require that it quickly find replacement software which may be difficult to accomplish in a timely manner.

Although Rockley monitors its use of open source software in an effort both to comply with the terms of the applicable open source licenses and to avoid subjecting its software to conditions it does not intend, the terms of many open source licenses have not been interpreted by U.S. or international courts, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on its ability to commercialize its product or operate its business. By the terms of certain open source licenses, Rockley could be required to release the source code of its software and to make its proprietary software available under open source licenses, if Rockley combines or distributes its software with open source software in a certain manner. In the event that portions of its software are determined to be subject to an open source license, Rockley could be required to publicly release the affected portions of its source code, re-engineer all, or a portion of, that software or otherwise be limited in the licensing of its software, each of which could reduce or eliminate the value of its product. Many of the risks associated with usage of open source software cannot be eliminated, and could negatively affect its business, results of operations, and financial condition.

Customer-Related Risks

Rockley currently has, and intends to target, customers and suppliers that are large corporations with substantial negotiating power, exacting product, quality, and warranty standards, and potentially competitive internal solutions. If Rockley is unable to sell its products to these customers or is unable to enter into agreements with customers and suppliers on satisfactory terms, its prospects and results of operations will be adversely affected.

Many of Rockley’s customers and suppliers, and potential customers, are large corporations with substantial negotiating power relative to it and, in some instances, may have internal solutions that are competitive to Rockley’s products. Many of these large corporations that are customers or potential customers also have significant development resources, which may allow them to acquire or develop independently, or in partnership with others, competitive technologies. Meeting the technical requirements and securing design wins with any of these companies will require a substantial investment of Rockley’s time and resources. Rockley cannot assure you that its products or technology will secure design wins from these or other companies or that it will generate meaningful revenue from the sales of its products to these key customers and potential customers. If Rockley’s products are not selected by these large corporations or if these corporations develop or acquire competitive technology, it will have an adverse effect on Rockley’s business.

Rockley currently depends on a few large customers for a substantial portion of its revenue. The loss of, or a significant reduction in, orders from Rockley’s customers, including its largest customer, could significantly reduce its revenue and adversely impact Rockley’s operating results.

Rockley believes that its operating results for the foreseeable future will continue to depend to a significant extent on revenue attributable to a few large customers, including Apple Inc., Rockley’s largest customer, and Hengtong Rockley Technology Co., Ltd. (“HRT”), its second largest customer. Rockley’s two largest customers collectively accounted for 100% and 99.6% of Rockley’s revenue in 2020 and 2019, respectively. Revenue attributable to Rockley’s largest customer accounted for the majority of its revenue in 2020 and 2019, respectively. Rockley anticipates revenue attributable to this customer will fluctuate from period to period, although it expects to remain dependent on this customer for a significant portion of its revenue for the foreseeable future. Rockley has a master supply and development agreement with this customer, which provides a general framework for Rockley’s transactions with it. This agreement continues until either party terminates for material breach. Under this agreement, Rockley has agreed to develop and deliver new products to this customer at its request, provided it also meets Rockley’s business purposes, and has agreed to indemnify it for intellectual property infringement or any injury or damages caused by Rockley’s products. This customer does not have any minimum or binding purchase obligations to Rockley under this agreement and could elect to discontinue or reduce making purchases from Rockley with little or no notice.

HRT is a joint venture formed by Rockley with Hengtong Optic-Electric Co., Ltd. (“Hengtong”), a subsidiary of Hengtong Group, Co., Ltd., in 2017. Under the Sino-Foreign Equity Joint Venture Contract (the “JV Agreement”) and the related technology development agreement and license agreement, HRT must procure chipsets from Rockley for use in finished products and HRT owns the copyright in the final designs. HRT has a license to the underlying intellectual property in the reference designs and Rockley has certain non-compete obligations under the JV Agreement. During the years ended December 31, 2020 and 2019, Rockley made sales to HRT of $5.3 million and $6.7 million, respectively. See notes 3 and 11 to the notes to Rockley’s consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

In addition, customers may seek to enter into licensing arrangements in lieu of product purchases, which could negatively impact Rockley’s revenue, and, to a lesser extent, Rockley’s gross margins. If Rockley’s customers were to choose to work with other manufacturers or its relationships with its customers is disrupted for any reason, it could have a significant negative impact on Rockley’s business. Any reduction in sales attributable to Rockley’s larger customers would have a significant and disproportionate impact on Rockley’s business, financial condition, and results of operations.

Rockley’s customers, or the distributors through which it sells to these customers, may choose to use products in addition to Rockley’s, use a different product altogether, or develop an in-house solution. Any of these events could significantly harm its business, financial condition, and results of operations. In addition, if Rockley’s distributors’ relationships with Rockley’s end customers, including its larger end customers, are disrupted for inability to deliver sufficient products or for any other reason, it could have a significant negative impact on Rockley’s business, financial condition, and results of operations.

Rockley is dependent in part upon its relationships and alliances with industry participants to generate revenue, which involves risks and uncertainties.

Rockley has, and in the future may, acquire interests in joint ventures, which may subject Rockley to risk because, among other things, Rockley cannot exercise sole decision-making power and its partners may have different economic interests than Rockley has. For example, Rockley currently holds a 24.9% share in a strategic joint venture with another industry participant

and is currently in discussions regarding potential licensing of technology to the joint venture in return for future payments. Rockley is therefore dependent on the successful execution of a licensing agreement with this joint venture partner to generate additional revenue. Rockley may also acquire interests in other joint ventures with third parties. There are additional risks involved in joint venture transactions. For example, as a co-investor in a joint venture, Rockley may not be in a position to exercise sole decision-making authority relating to the joint venture or other entity. As a result, the operations of any joint venture are subject to the risk that third parties may make business, financial, or management decisions with which Rockley does not agree, or the management of the joint venture may take risks or otherwise act in a manner that does not serve Rockley’s interests. Further, there may be a potential risk of impasse in some business decisions because Rockley may not be in a position to exercise sole decision-making authority. In such situations, it is possible that Rockley may not be able to exit the relationship because it may not have the funds necessary to complete a buy-out of the other partner or it may be difficult to locate a third-party purchaser for its interest. Because Rockley may not have the ability to exercise control over such operations, it may not be able to realize some or all of the benefits that it believes will be created from its involvement. In addition, there is the potential that a joint venture partner may become bankrupt or have divergent, conflicting, or inconsistent economic or business interests from Rockley. This could result in, among other things, exposing Rockley to liabilities of the joint venture in excess of its proportionate share of these liabilities. If any of the foregoing were to occur, Rockley’s business, financial condition, and results of operations could suffer.

If Rockley is unable to expand or further diversify its customer base, its business, financial condition, and results of operations could suffer.

Rockley currently expects the composition of its largest customers to vary over time, and that revenue attributable to its largest customers in any given period may decline over time. Rockley’s relationships with existing customers may deter potential customers who compete with these customers from buying Rockley’s products. If Rockley is unable to expand or further diversify its customer base, it could harm its business, financial condition, and results of operations.

Rockley does not currently have any products in commercial production. Accordingly, Rockley views its current customer relationships in the following stages: (a) customers with whom it is “engaged”, or in discussions with, regarding potential product features for incorporation into such customer’s end products or (b) customers with whom it is “contracted” where Rockley has non-binding MOUs or development and supply agreements. These non-binding MOUs and development and supply agreements provide a general framework for Rockley’s transactions with the customer and typically provide that Rockley will develop and deliver new products meeting the customer’s specifications. These agreements do not contain any minimum or binding purchase obligations. If Rockley is unable to transition customers with whom it is engaged in discussions to contracted customers or if Rockley fails to otherwise attract new customers, it would negatively impact Rockley’s ability to grow its business and gain market share, which in turn would harm Rockley’s financial condition and results of operations.

Because Rockley does not anticipate long-term purchase commitments with its customers, orders may be cancelled, reduced, or rescheduled with little or no notice, which in turn exposes Rockley to inventory risk, and may cause its business and results of operations to suffer.

Rockley anticipates that its products will be sold directly to customers as well as through distributors and resellers, with, in certain cases, no long-term or minimum purchase commitments from them or their end customers. Rockley expects that sales of its products will be primarily made pursuant to standard purchase orders, which orders may be cancelled, reduced, changed, or rescheduled with little or no notice or penalty. Cancellations of orders could result in the loss of anticipated sales without allowing Rockley sufficient time to reduce its inventory and operating expenses. In addition, changes in forecasts or the timing of orders from its customers expose Rockley to the risks of inventory shortages or excess inventory. As a result, Rockley’s revenue and operating results could fluctuate materially and could be materially and disproportionately impacted by purchasing decisions of Rockley’s customers, including Rockley’s larger customers. In the future, Rockley’s customers or its distributors or their end customers may decide to purchase fewer units than expected, may alter their purchasing patterns at any time with limited or no notice, or may decide not to continue to purchase Rockley’s products at all, any of which could cause Rockley’s revenue to decline materially and materially harm Rockley’s business, financial condition, and results of operations.

Cancellations of, reductions in, or rescheduling of customer orders could also result in the loss of anticipated sales without allowing Rockley sufficient time to reduce its inventory and operating expenses, as a substantial portion of Rockley’s expenses are fixed at least in the short term. In addition, changes in forecasts or the timing of orders expose Rockley to the risks of inventory shortages or excess inventory. Any of the foregoing events could materially and adversely affect Rockley’s business, financial condition, and results of operations.

If Rockley is unable to establish and maintain confidence in its long-term business prospects among customers and analysts and within its industry or is subject to negative publicity, then Rockley’s financial condition, operating results, business prospects, and access to capital may suffer materially.

Rockley has not yet fully developed or commercialized its products or services and the successful commercialization of Rockley’s products depends in part on Rockley’s customers and potential customers committing to use Rockley’s products in their own products. Customers may be less likely to purchase Rockley’s products if they are not convinced that Rockley’s business will succeed or that its service and support and other operations will continue in the long term. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing business relationships with Rockley if they are not convinced that Rockley’s business will succeed. If Rockley is unable to establish and maintain confidence in its long-term business prospects among customers, suppliers, analysts, ratings agencies, and within its industry or is subject to negative publicity, then Rockley’s financial condition, operating results, business prospects, and access to capital may suffer materially.

Rockley’s investments in educating its customers and potential customers about the advantages of Rockley’s silicon photonics and sensing technology and its applications will require significant financial and talent resources and may not result in sales of Rockley’s products.

Educating Rockley’s prospective customers, and to a lesser extent, its existing customers, about Rockley’s silicon photonics and sensing technology and its applications in health monitoring devices, its advantages over competitive technologies, and the potential application of Rockley’s products in different industries and use cases is an integral part of Rockley’s strategy to expand into additional markets. Rockley’s efforts to educate potential customers and the market generally will require significant financial and talent resources. These educational efforts may not be successful and Rockley may not offset the costs of such efforts with revenue from the new customers. If Rockley is unable to acquire new customers to offset these expenses, its financial condition will be adversely affected.

Rockley’s business depends substantially on the efforts of its executive officers, including its Chief Executive Officer and founder, Dr. Andrew Rickman, OBE, and highly skilled talent, and its operations may be severely disrupted if it lost their services.

Rockley is highly dependent on its founder, Dr. Andrew Rickman, OBE as well its other executive officers, and the loss of his services would adversely affect Rockley’s business because his loss could make it more difficult to, among other things, compete with other market participants, manage Rockley’s research and development activities, and retain existing customers or cultivate new ones. Competition for highly-skilled talent is often intense and Rockley may incur significant costs to attract highly-skilled talent. Rockley may not be successful in attracting, integrating, or retaining qualified talent to fulfill its current or future needs. Rockley has, from time to time, experienced, and it expects to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications.

In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. If the perceived value of Rockley’s equity or equity awards declines it may adversely affect Rockley’s ability to retain highly skilled employees. If Rockley fails to attract new talent or fails to retain and motivate its current talent, its business and future growth prospects could be adversely affected.

Legal and Regulatory Risks Related to Rockley’s Business

Rockley is subject to governmental export and import control laws and regulations. Rockley’s failure to comply with these laws and regulations could have an adverse effect on its business, prospects, financial condition, and results of operations.

Certain of Rockley’s products and services are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. U.S. export control laws and regulations and economic sanctions prohibit the shipment of certain products and services to U.S. embargoed or sanctioned countries, governments and persons. In addition, complying with export control and sanctions regulations for a particular sale may be time-consuming and result in the delay or loss of sales opportunities. Exports of Rockley’s products and technology must be made in compliance with these laws and regulations. If Rockley fails to comply with these laws and regulations, Rockley and certain of its employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges, fines, which may be imposed on Rockley and responsible employees or managers, and, in extreme cases, the incarceration of responsible employees or managers.

Changes to trade policy, tariffs, and import/export regulations may have a material adverse effect on Rockley’s business, financial condition, and results of operations.

Changes in global political, regulatory, and economic conditions, or in laws and policies governing foreign trade, manufacturing, development, and investment in the territories or countries where Rockley may purchase its components, sell its products, or conduct its business, could adversely affect Rockley’s business. The United States has in the past instituted or proposed changes in trade policies that included the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the United States, economic sanctions on individuals, corporations, or countries, and other government regulations affecting trade between the United States and other countries where Rockley conducts its business. A number of other nations have proposed or instituted similar measures directed at trade with the United States in response. As a result of these developments or any future similar developments, there may be greater restrictions and economic disincentives on international trade that could adversely affect Rockley’s business. It may be time-consuming and expensive for Rockley to alter its business operations to adapt to or comply with any such changes, and any failure to do so could have a material adverse effect on its business, financial condition, and results of operations.

Rockley may become involved in legal and regulatory proceedings and commercial or contractual disputes, which could have an adverse effect on its profitability and financial position.

Rockley may be, from time to time, involved in litigation, regulatory proceedings, and commercial or contractual disputes that may be significant. These matters may include, without limitation, disputes with Rockley’s suppliers and customers, intellectual property claims, shareholder litigation, government investigations, class action lawsuits, personal injury claims, environmental issues, customs and value-added tax disputes, and employment and tax issues. In addition, Rockley could face in the future a variety of labor and employment claims against it, which could include but is not limited to general discrimination, wage and hour, privacy, ERISA, or disability claims. In such matters, government agencies or private parties may seek to recover from Rockley indeterminate amounts in penalties or monetary damages (including, in some cases, treble or punitive damages) or seek to limit Rockley’s operations in some way. These types of lawsuits could require significant management time and attention or could involve substantial legal liability, adverse regulatory outcomes, and/or substantial expenses to defend. Often these cases raise complex factual and legal issues and create risks and uncertainties. No assurances can be given that any proceedings and claims will not have a material adverse impact on Rockley’s operating results and financial position or that its established reserves or its available insurance will mitigate this impact.

Rockley is subject to, and must remain in compliance with, numerous laws and governmental regulations across various jurisdictions concerning the use, distribution, and sale of its products. Some of Rockley’s customers also require that it comply with their own unique requirements relating to these matters.

Rockley sells products that contain electronic components, and such components may contain materials that are subject to government regulation in locations where Rockley sells its products. For example, certain regulations limit the use of lead in electronic components. Since Rockley operates on a global basis, compliance with regulations is a complex process which requires continual monitoring of regulations and an ongoing compliance process to ensure that Rockley and its suppliers are in compliance with existing regulations in each market where it operates. If there is an unanticipated new regulation that significantly impacts Rockley’s use and sourcing of various components or requires more expensive components, that regulation could materially and adversely affect its business, results of operations, and financial condition. Rockley’s products may also be used in healthcare monitoring and other medical devices, which are subject to additional regulation. If Rockley fails to adhere to these new regulations or fails to continually monitor the updates, it may be subject to litigation, loss of customers, or negative publicity and its business, results of operations, and financial condition will be adversely affected.

Rockley may in the future become subject to additional regulations, including Food and Drug Administration (the “FDA”) clearance or approval, for health monitoring products in which Rockley’s products are incorporated. Achieving and maintaining compliance and approval under applicable regulations may be difficult to achieve.

Rockley’s products may be incorporated into end products in the health monitoring sector, including products which collect clinical data. Accordingly, it is possible that certain of Rockley’s products, or the end products which incorporate Rockley’s products will be subject to current and future regulation by the FDA, as well as by other federal, state, and local agencies. As Rockley’s target market is consumer wellness rather than medical, Rockley currently anticipates that FDA clearance will be unnecessary for its products targeting the consumer wearables market; however, Rockley intends to monitor and comply with regulations to the extent they become applicable to Rockley.

Manufacturers of medical devices are required to comply with applicable laws and regulations governing development, testing, manufacturing, labeling, marketing, and distribution of medical devices. Devices are generally subject to varying levels of regulatory control, based on the risk level of the device. Governmental regulations specific to medical devices are wide-ranging and govern, among other things:

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product design, development, and manufacture;

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laboratory, pre-clinical and clinical testing, labeling, packaging, storage, and distribution;

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premarketing clearance or approval;

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record-keeping;

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product marketing, promotion and advertising, sales, and distribution; and

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post-marketing surveillance, including reporting of deaths or serious injuries and recalls and correction and removals.

Rockley or its customers may not be able to obtain the necessary clearances or approvals for their products or may be unduly delayed in doing so, which could harm Rockley’s business. Furthermore, even if Rockley is granted regulatory clearances or approvals, they may include significant limitations on the permitted uses for the product, which may limit the market potential for the product. Delays in obtaining clearance or approval could increase Rockley’s costs and harm Rockley’s revenue and growth.

Additionally, Rockley’s products may be subject to regulation by similar agencies in other states and foreign countries. While Rockley believes that it has complied with all applicable laws and regulations, continued compliance with such laws or regulations, including any new laws or regulations, might impose additional costs on Rockley which could adversely affect its financial performance and results of operations.

Rockley is subject to various environmental laws and regulations that could impose substantial costs upon Rockley.

Concerns over environmental pollution and climate change have produced significant legislative and regulatory efforts on a global basis, and Rockley believes this will continue both in scope and in the number of countries participating. In addition, as climate change issues become more prevalent, foreign, federal, state, and local governments and Rockley’s customers have been responding to these issues. The increased focus on environmental sustainability may result in new regulations and customer requirements, or changes in current regulations and customer requirements, which could materially and adversely impact Rockley’s business, results of operations, and financial condition. If Rockley is unable to effectively manage real or perceived issues, including concerns about environmental impacts or similar matters, sentiments toward Rockley or its products could be negatively impacted, and its business, results of operations, or financial condition could suffer.

Rockley’s operations are and will be subject to foreign, federal, state, and local environmental laws and regulations, and such laws and regulations could directly increase the cost of energy, which may have an effect on the way Rockley manufactures products or utilizes energy to produce its products. In addition, any new regulations or laws in the environmental area might increase the cost of raw materials or key components Rockley uses in its products. Environmental regulations require Rockley to reduce product energy usage, monitor and exclude an expanding list of restricted substances, and to participate in required recovery and recycling of its products. Environmental and health and safety laws and regulations can be complex, and Rockley has limited experience complying with them. Capital and operating expenses needed to comply with environmental laws and regulations can be significant, and violations may result in substantial fines and penalties, third-party damages, suspension of production, or a cessation of Rockley’s operations.

The costs of complying with environmental laws and regulations and any claims concerning noncompliance, or liability with respect to contamination in the future, could have a material adverse effect on Rockley’s financial condition or operating results. Rockley may face unexpected delays in obtaining the required permits and approvals in connection with its planned production facilities that could require significant time and financial resources and delay its ability to operate these facilities, which would adversely impact Rockley’s business, prospects, financial condition, and operating results.

Rockley is subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. Rockley can face criminal liability and other serious consequences for violations, which can harm its business.

Rockley is subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the U.K. Bribery Act of 2010, and possibly other anti-bribery and anti-money laundering laws in countries in which Rockley conducts activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, and other collaborators from authorizing,

promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. Rockley can be held liable for the corrupt or other illegal activities of its employees, agents, contractors, and other collaborators, even if Rockley does not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.

Failures, or perceived failures, to comply with privacy, data protection, and information security requirements in the variety of jurisdictions in which Rockley operates may adversely impact its business, and such legal requirements are evolving, uncertain, and may require improvements in, or changes to, Rockley’s policies and operations.

Rockley’s current and potential future operations and sales are subject to laws and regulations addressing privacy and the collection, use, storage, disclosure, transfer, and protection of a variety of types of data. For example, the European Commission has adopted the General Data Protection Regulation and California recently enacted the California Consumer Privacy Act of 2018, both of which provide for potentially material penalties for non-compliance. These regimes may, among other things, impose data security requirements, disclosure requirements, and restrictions on data collection, uses, and sharing that may impact Rockley’s operations and the development of its business. Rockley has limited access to collect, store, process, or share certain information collected by its products, and Rockley’s products may evolve to collect additional information. Therefore, the full impact of these privacy regimes on Rockley’s business is rapidly evolving across jurisdictions and remains uncertain at this time.

Rockley may also be affected by cyber-attacks and other means of gaining unauthorized access to its products, systems, and data. For instance, cyber criminals or insiders may target Rockley or third parties with which it has business relationships to obtain data, or in a manner that disrupts Rockley’s operations or compromises its products or the systems into which its products are integrated.

Rockley is assessing the continually evolving privacy and data security regimes and measures it believes are appropriate in response. Since these data security regimes are evolving, uncertain, and complex, especially for a global business like Rockley, Rockley may need to update or enhance its compliance measures and these updates or enhancements may require implementation costs. In addition, Rockley may not be able to monitor and react to all developments in a timely manner. The compliance measures Rockley does adopt may prove ineffective. Any failure, or perceived failure, by Rockley to comply with current and future regulatory or customer-driven privacy, data protection, and information security requirements, or to prevent or mitigate security breaches, cyber-attacks, or improper access to, use of, or disclosure of data, or any security issues or cyber-attacks affecting Rockley, could result in significant liability, costs (including the costs of mitigation and recovery), and a material loss of revenue resulting from the adverse impact on its reputation and brand, loss of proprietary information and data, disruption to its business and relationships, and diminished ability to retain or attract customers and business partners. Such events may result in governmental enforcement actions and prosecutions, private litigation, fines, and penalties or adverse publicity, and could cause customers and business partners to lose trust in Rockley, which could have an adverse effect on its reputation and business.

Further, in the event Rockley’s products, or the end products into which Rockley’s products are incorporated, involve the collection of personal medical or clinical data, Rockley would be subject to additional privacy regulations. For example, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) regulations apply U.S. national standards for some types of electronic health information transactions and the data elements used in those transactions to ensure the integrity, security, and confidentiality of health information and standards to protect the privacy of individually identifiable health information businesses receive, maintain or transmit. The Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH Act”) expanded the scope of the privacy and security requirements under HIPAA and increased penalties for violations. In addition, the HITECH Act enacted federal breach notification rules requiring notification to affected individuals and the Department of Health and Human Services (and in some cases, relevant media outlets) whenever a breach of protected health information occurs. Rockley’s failure to maintain confidentiality of sensitive protected health information or other personal information in accordance with the applicable regulatory requirements could damage its reputation and expose Rockley to claims, fines, and penalties. Rockley’s business, operating results, and financial condition could also be negatively impacted by a violation of the HIPAA privacy or security rules or any other applicable privacy or data security law.

Many U.S. states and international jurisdictions in which Rockley operates also have laws and regulations that protect the privacy and security of confidential, protected health information, or other personal information and have similar or even more protection than U.S. federal regulations. Furthermore, state data breach notification laws continue to expand the type of protected health information and other personal information they encompass, and in many cases are more burdensome than the HIPAA/HITECH breach reporting requirements.

Regulations related to conflict minerals may cause Rockley to incur additional expenses and could limit the supply and increase the costs of certain metals used in the manufacturing of its products.

As a public company, Rockley will become subject to the requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, that will require it to determine, disclose, and report whether its products contain conflict minerals. The implementation of these requirements could adversely affect the sourcing, availability, and pricing of the materials used in the manufacture of components used in Rockley’s products. In addition, Rockley will incur additional costs to comply with the disclosure requirements, including costs related to conducting diligence procedures to determine the sources of conflict minerals that may be used in or necessary to the production of its products and, if applicable, potential changes to products, processes, or sources of supply as a consequence of such verification activities. It is also possible that its reputation may be adversely affected if Rockley determines that certain of its products contain minerals not determined to be conflict-free or if Rockley is unable to alter its products, processes, or sources of supply to avoid use of such materials.

Risks Related to Rockley’s Intellectual Property

Despite the actions Rockley is taking to defend and protect its intellectual property, Rockley may not be able to adequately protect or enforce its intellectual property rights or prevent unauthorized parties from copying or reverse engineering its products or technology. Rockley’s efforts to protect and enforce its intellectual property rights and prevent third parties from violating its rights may be costly.

The success of Rockley’s products and its business depend in part on Rockley’s ability to obtain patents and other intellectual property rights and maintain adequate legal protection for its products in the United States and other international jurisdictions. Rockley relies on a combination of patent, trademark, and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect its proprietary rights, all of which provide only limited protection.

As of June 30, 2021, Rockley had 85 issued and allowed patents and 85 other patent applications pending in the United States and 59 patents in foreign jurisdictions. The 85 issued and allowed patents in the United States expire in the years beginning in 2021 through 2040. The 59 patents in foreign jurisdictions include 33 in the United Kingdom, 23 in China, and 3 in Japan, and they expire in the years beginning 2027 through 2039. Many of Rockley’s issued patents and pending patent applications relate to sensors and sensor chips.

Rockley cannot assure you that any patents will be issued with respect to its currently pending patent applications or that any trademarks will be registered with respect to its currently pending applications in a manner that gives Rockley adequate defensive protection or competitive advantages, if at all, or that any patents issued to Rockley or any trademarks registered by it will not be challenged, invalidated, or circumvented. Rockley may file for patents and trademarks in the United States and in certain international jurisdictions, but such protections may not be available in all countries in which it operates or in which Rockley seeks to enforce its intellectual property rights, or may be difficult to enforce in practice. For example, the legal environment relating to intellectual property protection in certain emerging market countries where Rockley may operate in the future is relatively weaker, often making it difficult to create and enforce such rights. Rockley’s currently-registered trademarks and any patents and trademarks that may be issued or registered, as applicable, in the future with respect to pending or future applications may not provide sufficiently broad protection or may not prove to be enforceable in actions against alleged infringers. Rockley cannot be certain that the steps it has taken will prevent unauthorized use of its technology or the reverse engineering of its technology. Moreover, others may independently develop technologies that are competitive to Rockley or infringe Rockley’s intellectual property.

Protecting against the unauthorized use of Rockley’s intellectual property, products, and other proprietary rights is expensive and difficult, particularly internationally. Unauthorized parties may attempt to copy or reverse engineer Rockley’s sensing technology or certain aspects of Rockley’s products or manufacturing processes that it considers proprietary. Litigation may be necessary in the future to enforce or defend Rockley’s intellectual property rights, to prevent unauthorized parties from copying or reverse engineering its products, or technology to determine the validity and scope of the proprietary rights of others or to block the importation of infringing products into the United States.

Any such litigation, whether initiated by Rockley or a third party, could result in substantial costs and diversion of management resources, either of which could adversely affect Rockley’s business, operating results, and financial condition. Even if it obtains favorable outcomes in litigation, Rockley may not be able to obtain adequate remedies, especially in the context of unauthorized parties copying or reverse engineering its products or technology.

Further, many of Rockley’s current and potential competitors have the ability to dedicate substantially greater resources to defending intellectual property infringement claims and to enforcing their intellectual property rights than Rockley has. Attempts to enforce its rights against third parties could also provoke these third parties to assert their own intellectual property

or other rights against Rockley or result in a holding that invalidates or narrows the scope of Rockley’s rights, in whole or in part. Effective patent, trademark, service mark, copyright, and trade secret protection may not be available in every country in which Rockley’s products are available and competitors based in other countries may sell infringing products in one or more markets. Failure to adequately protect Rockley’s intellectual property rights could result in Rockley’s competitors offering similar products, potentially resulting in the loss of some of Rockley’s competitive advantage and a decrease in its revenue, which would adversely affect Rockley’s business, operating results, financial condition, and prospects.

Third-party claims that Rockley is infringing intellectual property, whether successful or not, could subject Rockley to costly and time-consuming litigation or expensive licenses, and its business could be adversely affected.

Although Rockley has applied for patents related to its products and technology, a number of companies hold patents covering aspects of sensing and photonic chip technologies. In addition to these patents, participants in this industry typically also protect their technology, especially embedded software, through copyrights and trade secrets. As a result, there is frequent litigation based on allegations of infringement, misappropriation, or other violations of intellectual property rights. Rockley may in the future receive inquiries from other intellectual property holders and may become subject to claims that it infringes their intellectual property rights, particularly as Rockley expands its presence in the market, expands to new use cases, and faces increasing competition. In addition, parties may claim that the names and branding of Rockley’s products infringe their trademark rights in certain countries or territories. If such a claim were to prevail, Rockley may have to change the names and branding of its products in the affected territories and it could incur other costs.

Rockley currently has a number of agreements in effect pursuant to which it has agreed to defend, indemnify, and hold harmless its customers, suppliers, and channel partners and other counterparties from damages and costs which may arise from the infringement by Rockley’s products of third-party patents or other intellectual property rights. The scope of these indemnity obligations varies, and, in some instances, include indemnification for damages and expenses, including attorneys’ fees. Rockley’s insurance may not cover all intellectual property infringement claims. A claim that its products infringe a third party’s intellectual property rights, even if untrue, could adversely affect Rockley’s relationships with its customers, may deter future customers from purchasing its products, and could expose Rockley to costly litigation and settlement expenses. Even if Rockley is not a party to any litigation between a customer and a third party relating to infringement by its products, an adverse outcome in any such litigation could make it more difficult for Rockley to defend its products against intellectual property infringement claims in any subsequent litigation in which it is a named party. Any of these results could adversely affect Rockley’s brand and operating results.

Rockley may in the future need to initiate infringement claims or litigation to try to protect its intellectual property rights. In addition to litigation where Rockley is a plaintiff, Rockley’s defense of intellectual property rights claims brought against it or its customers, suppliers, and channel partners, with or without merit, could be time-consuming, expensive to litigate or settle, divert management resources and attention, and force Rockley to acquire intellectual property rights and licenses, which may involve substantial royalty or other payments and may not be available on acceptable terms or at all. Further, a party making such a claim, if successful, could secure a judgment that requires Rockley to pay substantial damages or obtain an injunction and also Rockley may lose the opportunity to license its technology to others or to collect royalty payments. An adverse determination also could invalidate or narrow Rockley’s intellectual property rights and adversely affect its ability to offer its products to its customers and may require that Rockley procure or develop substitute products that do not infringe, which could require significant effort and expense. Any of these events could adversely affect Rockley’s business, reputation, operating results, financial condition, and prospects.

Rockley’s intellectual property applications, including patent applications, may not be approved or granted or may take longer than expected to result in approval or grant, which may have a material adverse effect on Rockley’s ability to prevent others from commercially exploiting products similar to Rockley’s.

Rockley cannot be certain that it is the first inventor of the subject matter to which it has filed a particular patent application, or if it is the first party to file such a patent application. If another party has filed a patent application to the same subject matter as Rockley has, Rockley may not be entitled to the protection sought by the patent application. Rockley also cannot be certain whether the claims included in a patent application will ultimately be allowed in the applicable issued patent or the timing of any approval or grant of a patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, Rockley cannot be certain that the patent applications that it files will issue, or that its issued patents will afford protection against competitors with similar technology. In addition, Rockley’s competitors may design around Rockley’s registered or issued intellectual property, which may adversely affect Rockley’s business, prospects, financial condition, and operating results.

In addition to patented technology, Rockley relies on its unpatented proprietary technology, trade secrets, designs, experiences, workflows, data, processes, software, and know-how.

Rockley relies on proprietary information (such as trade secrets, designs, experiences, workflows, data, know-how, and confidential information) to protect intellectual property that may not be patentable or subject to copyright, trademark, trade dress, or service mark protection, or that Rockley believes is best protected by means that do not require public disclosure. Rockley generally seeks to protect this proprietary information by entering into confidentiality agreements, or consulting, services, or employment agreements that contain non-disclosure and non-use provisions with its employees, consultants, contractors, and third parties. However, these agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement, or misappropriation of its proprietary information, may be limited as to their term, and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information. Rockley has limited control over the protection of trade secrets used by its current or future manufacturing counterparties and suppliers and could lose future trade secret protection if any unauthorized disclosure of such information occurs. In addition, Rockley’s proprietary information may otherwise become known or be independently developed by its competitors or other third parties. To the extent that its employees, consultants, contractors, advisors, and other third parties use intellectual property owned by others in their work for Rockley, disputes may arise as to the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to enforce and determine the scope of Rockley’s proprietary rights, and failure to obtain or maintain protection for its proprietary information could adversely affect its competitive business position. Furthermore, laws regarding trade secret rights in certain markets where Rockley operates may afford little or no protection to its trade secrets.

Rockley also relies on physical and electronic security measures to protect its proprietary information, but it cannot provide assurance that these security measures will not be breached or provide adequate protection for its property. There is a risk that third parties may obtain and improperly utilize Rockley’s proprietary information to its competitive disadvantage. Rockley may not be able to detect or prevent the unauthorized use of such information or take appropriate and timely steps to enforce its intellectual property rights.

Rockley may be subject to damages resulting from claims that it or its current or former employees have wrongfully used or disclosed alleged trade secrets of its current or former employees’ former employers. Rockley may be subject to damages if its current or former employees wrongfully use or disclose Rockley’s trade secrets.

Rockley may be subject to claims that it or its current or former employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of a current or former employee’s former employers. Litigation may be necessary to defend against these claims. If Rockley fails to defend against such claims, in addition to paying monetary damages, it may lose valuable intellectual property rights or talent. A loss of key talent or their work product could hamper or prevent Rockley’s ability to commercialize its products, which could severely harm its business. Even if Rockley is successful in defending against these claims, litigation could result in substantial costs and demand on management resources.

Risks Related to Infrastructure, Cybersecurity and Privacy

A network or data security incident may allow unauthorized access to Rockley’s network or data, harm its reputation, create additional liability, and adversely impact its financial results.

Rockley and its third-party service providers may face security threats and attacks from a variety of sources. In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, employee theft or misuse, and denial of service attacks, sophisticated nation-state and nation-state supported actors engage in attacks (including advanced persistent threat intrusions) and increase the risks to Rockley’s internal networks and customer facing environments and the information they store and process. These risks may increase due to COVID-19. A breach in Rockley’s data or an attack against its service availability, or that of its third-party service providers, could impact Rockley’s networks, creating system disruptions or slowdowns and exploiting security vulnerabilities of Rockley’s products, and the information stored on Rockley’s networks or those of its third-party service providers could be accessed, publicly disclosed, altered, lost, or stolen, which could subject Rockley to liability and cause it financial harm.

Unauthorized access by a third party to Rockley’s internal network, any actual or perceived breach of network security in its systems or networks, or any other actual or perceived data security incident Rockley or its third-party service providers suffer, could result in damage to its reputation, negative publicity, loss of channel partners, end-customers and sales, loss of competitive advantages over its competitors, increased costs to remedy any problems and otherwise respond to any incident, regulatory investigations and enforcement actions, costly litigation, and other liability. In addition, Rockley may incur significant costs to investigate and remediate any security breaches and other security incidents. Rockley’s data, corporate systems, third-party systems, and security measures may be breached due to the actions of outside parties, employee error,

malfeasance, a combination of these, or otherwise, and, as a result, an unauthorized party may obtain access to its data. For example, in late 2020, Rockley was subject to phishing attacks, one involving a spoofed email whereby certain vendor account information was charged and payment was made to a fraudulent account and a second closely timed incident where a “forwarding” rule was applied to the spoofed email’s recipient. While no personal data was accessed and the issue was addressed, the incident resulted in a net loss of approximately $66,345, which loss has been accounted for in Rockley’s 2020 financial statements (which amount has been offset by a payout under our cybersecurity insurance policy in March 2021). While Rockley maintains cybersecurity insurance, such insurance may be insufficient to cover all liabilities incurred by these incidents, and any incidents may result in loss or increased costs of its cybersecurity insurance. Any of these negative outcomes could adversely impact the market perception of, and investor confidence in, Rockley.

Any disruption or performance issues with Rockley’s network infrastructure could harm its brand, reputation, and business.

Rockley has experienced, and may in the future experience, disruptions, outages, and other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints, and fraud. Any disruptions or other performance problems with Rockley’s products or reliability or security of Rockley’s systems could harm its reputation, brand, and Rockley’s business and operating results. In addition, Rockley must continually improve its computer network and infrastructure to avoid service interruptions or slower system performance. Rockley will need to devote additional resources to improving its platform architecture and its infrastructure. Any failure or delays in Rockley’s computer systems could cause service interruptions or slower system performance. These performance issues could harm Rockley’s business operations and financial condition.

Rockley relies on third parties to maintain and operate certain elements of its network infrastructure.

Rockley relies on third parties to operate and maintain certain elements of its network infrastructure. Interruptions in Rockley’s systems or the third-party systems on which it relies, whether due to system failures, computer viruses, physical or electronic break-ins, or other factors, could affect the security or availability of Rockley’s network infrastructure and website. Rockley’s existing data center facilities and third-party hosting providers have no obligations to renew their agreements with Rockley on commercially reasonable terms or at all, and certain of the agreements governing these relationships may be terminated by either party at any time, with no or limited notice. If any of these arrangements with third parties are terminated, Rockley could experience interruptions, as well as downtime, delays, and additional expenses in arranging alternative cloud infrastructure services. Rockley may incur significant liability from those customers and from third parties with respect to any breach of security affecting third parties’ infrastructure.

Risks Related to Financial and Accounting Matters

Rockley’s failure to raise additional capital or generate the significant capital necessary to expand its operations could reduce its ability to compete and could harm its business.

Rockley intends to continue to make investments to support its product development efforts and overall business growth and may require additional funds to respond to business challenges, including the need to develop new features to enhance its products or acquire complementary businesses and technologies. Accordingly, Rockley may in the long-term need to engage in equity or debt financings to secure additional funds. If Rockley raises additional equity or equity-linked financing, shareholders may experience dilution of their ownership interests. Current and future indebtedness may also contain terms that, among other things, restrict Rockley’s ability to incur additional indebtedness. Rockley may also be required to take other actions that would otherwise be in the interests of the debt holders and would require it to maintain specified liquidity or other ratios, any of which could harm Rockley’s business, operating results, and financial condition. Rockley may not be able to obtain additional financing on terms favorable to it, if at all. If Rockley is unable to obtain adequate financing or financing on satisfactory terms when required, Rockley’s ability to continue to support its business growth and to respond to business challenges could be significantly impaired, and its business may be adversely affected.

The nature of Rockley’s business requires the application of complex revenue recognition rules. Significant changes in current principles will affect its consolidated financial statements and changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and harm its results of operations.

The accounting rules and regulations with which Rockley must comply with are complex and subject to interpretation by the Financial Accounting Standards Board (“FASB”), the U.S. Securities and Exchange Commission (the “SEC”), and various bodies formed to promulgate and interpret appropriate accounting principles. In addition, many companies’ accounting disclosures are being subjected to heightened scrutiny by regulators and the public. Further, the accounting rules and regulations are continually changing in ways that could impact Rockley’s financial statements.

In preparing Rockley’s consolidated financial statements, Rockley makes good faith estimates and judgments that may change or turn out to be erroneous, which could adversely affect Rockley’s operating results.

In preparing Rockley’s consolidated financial statements in conformity with GAAP, Rockley must make estimates and judgments in applying Rockley’s most critical accounting policies. Those estimates and judgments have a significant impact on the results Rockley reports in its consolidated financial statements. The most difficult estimates and subjective judgments that Rockley makes relate to (i) revenue recognition including variable consideration, (ii) useful lives and recoverability of property and equipment and long-lived assets, (iii) incremental borrowing rates on the Company’s finance and operating leases, (iv) valuation of our convertible loan notes, (v) valuation allowances for income taxes, (vi) stock-based compensation including the valuation of ordinary shares, (vii) valuation of warrants and (viii) contingencies. Rockley bases its estimates on historical experience, input from outside experts, and on various other assumptions that Rockley believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Rockley also has other key accounting policies that are not as subjective, and therefore, their application would not require Rockley to make estimates or judgments that are as difficult, but which nevertheless could significantly affect its financial reporting. Actual results may differ materially from these estimates. In general, if Rockley’s estimates, judgments, or assumptions relating to its critical accounting policies are inaccurate or change or if actual circumstances differ from its estimates, judgments, or assumptions, including uncertainty in the current economic environment due to COVID-19, its operating results may be adversely affected and could fall below Rockley’s publicly announced projections or the expectations of securities analysts and investors.

Additionally, Rockley regularly monitors its compliance with applicable financial reporting standards and review new pronouncements and drafts thereof that are relevant to it. As a result of new standards, changes to existing standards, and changes in their interpretation, Rockley might be required to change its accounting policies, alter its operational policies, and implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or Rockley may be required to restate its published financial statements. Such changes to existing standards or changes in their interpretation may have an adverse effect on Rockley’s reputation, business, financial position, and profit, or cause an adverse deviation from Rockley’s revenue and operating profit target, which may negatively impact Rockley’s financial results. For more information, refer to the section entitled “Critical Accounting Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this quarterly report on Form 10-Q.

Rockley’s ability to use its net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, 2020, Rockley had $79.3 million of U.K. net operating loss carryforwards available to reduce future taxable income and will be carried forward indefinitely. To the extent Rockley is not able to offset future taxable income with its net operating losses, Rockley’s cash flows may be adversely affected.

Risks Related to Being a Public Company

Rockley’s management team has varying degrees of experience managing and operating a public company.

Members of Rockley’s management team have varying degrees of experience managing and operating a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. Additionally, some members of Rockley’s management team were recently hired, including its Senior Director of Sensing Application Algorithm Development, Controller, Senior Director of Sensing Product Module Development, and VP of Sensing Cloud, and AI Product. Rockley’s management team may not successfully or efficiently manage their new roles and responsibilities. Rockley’s transition to being a public company subjects it to significant regulatory oversight and reporting obligations under the U.S. securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from Rockley’s senior management and could divert their attention away from the day-to-day management of Rockley’s business. Rockley may not have adequate key talent with the appropriate level of knowledge, experience, and training in the accounting policies, practices, or internal controls over financial reporting required of public companies. The development and implementation of the standards and controls necessary for Rockley to achieve the level of accounting standards required of a public company may require costs greater than expected. It is possible that Rockley will be required to expand its employee base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods. These factors could adversely affect Rockley’s business, financial condition, and operating results.

If Rockley fails to maintain an effective system of internal controls, its ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected.

Upon the closing of the Business Combination, Rockley became subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the New York Stock Exchange (“NYSE”). The requirements of these rules and regulations have increased, and Rockley expects ongoing compliance with these rules and regulations will continue to increase its legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on its talent, systems, and resources.

The Sarbanes-Oxley Act requires, among other things, that Rockley maintain effective disclosure controls and procedures and internal control over financial reporting. Rockley is continuing to develop and refine its disclosure controls, internal control over financial reporting, and other procedures that are designed to ensure that information required to be disclosed by it in the reports that it will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to Rockley’s principal executive and financial officers.

Rockley’s current controls and any new controls that it develops may be inadequate because of changes in conditions in its business. Further, additional weaknesses in Rockley’s internal controls may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could adversely affect Rockley’s operating results or cause it to fail to meet its reporting obligations and may result in a restatement of Rockley’s financial statements for prior periods. Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of Rockley’s internal control over financial reporting that it is required to include in its periodic reports Rockley will file with the SEC under Section 404 of the Sarbanes-Oxley Act. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in Rockley’s reported financial and other information.

In order to maintain and improve the effectiveness of its disclosure controls and procedures and internal control over financial reporting, Rockley has expended and anticipates that it will continue to expend significant resources, including accounting-related costs, and provide significant management oversight. Any failure to maintain the adequacy of its internal controls, or consequent inability to produce accurate financial statements on a timely basis, could increase Rockley’s operating costs and could materially and adversely affect its ability to operate its business. If Rockley’s internal controls are perceived as inadequate or that it is unable to produce timely or accurate financial statements, investors may lose confidence in Rockley’s operating results and Rockley’s share price could decline.

Rockley’s independent registered public accounting firm is not required to formally attest to the effectiveness of its internal control over financial reporting until after Rockley is no longer an emerging growth company. At such time, Rockley’s independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which Rockley’s controls are documented, designed, or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on Rockley’s business and operating results.

In addition to Rockley’s results determined in accordance with GAAP, Rockley believes certain non-GAAP measures may be useful in evaluating its operating performance. Rockley presents certain non-GAAP financial measures in this quarterly report on Form 10-Q and intends to continue to present certain non-GAAP financial measures in future filings with the SEC and other public statements. Any failure to accurately report and present its non-GAAP financial measures could cause investors to lose confidence in its reported financial and other information, which would likely have a negative effect on the trading price of its ordinary shares.

The requirements of being a public company may strain Rockley’s resources, divert management’s attention, and affect its ability to attract and retain qualified board members.

Upon the closing of the Business Combination, Rockley became subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NYSE, and other applicable securities rules and regulations. Compliance with these rules and regulations has increased, and will continue to increase, Rockley’s legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on its systems and resources. Among other things, the Exchange Act requires that public companies file annual, quarterly, and current reports with respect to their business and operating results. In addition, the Sarbanes-Oxley Act requires, among other things, that companies maintain effective disclosure controls and procedures and internal control over financial reporting. In order to meet the requirements of this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm Rockley’s business and operating results. As a private company, Rockley was not required to comply with these requirements and as such, had not invested in the resources required for such compliance. Although Rockley has already hired additional employees to comply with these requirements, it may need to hire even more employees in the future and will need to engage its auditors to review its quarterly and annual reports, which will increase its costs and expenses.

In addition, changing laws, regulations, and standards related to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time-consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Rockley intends to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If Rockley’s efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against Rockley and its business may be harmed.

General Risks

The global COVID-19 pandemic could harm Rockley’s business and results of operations.

On March 11, 2020, the World Health Organization characterized the outbreak of COVID-19 as a global pandemic and recommended containment and mitigation measures. Since then, extraordinary actions have been taken by international, federal, state, and local public health and governmental authorities and organizations to contain and combat the outbreak and spread of COVID-19 in regions throughout the world. These actions include travel bans, quarantines, “stay-at-home” orders, and similar mandates and guidelines for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations.

The COVID-19 pandemic has negatively impacted, and will likely continue to have a negative impact on, worldwide economic activity and financial markets and has impacted, and will further impact, Rockley’s

workforce and operations, the operations of its customers, and those of their respective channel partners, vendors, and suppliers. In light of the uncertain and evolving situation and various international and government restrictions and guidelines, Rockley has taken measures intended to mitigate the spread of the virus and minimize the risk to its employees, channel partners, end-customers, and the communities in which it operates. Specifically, these measures include transitioning its employee population to work remotely from home, which is planned to continue through June 30, 2021 with the anticipated roll out of a phased return to office plan in through September 30, 2021 in accordance with government guidance and, in accordance with applicable government directives, reducing on-site operations at its facilities. Certain key laboratory employees and facilities were designated as Essential Critical Infrastructure and Rockley was able to continue internal testing and laboratory work to the extent necessary to service customer commitments. To facilitate on-site operations, revised operational and manufacturing plans were implemented that conform to COVID-19 precautionary health guidelines, including universal requirement of facial coverings, rearranging facilities to follow social distancing protocols, conducting active daily temperature checks, regular and thorough disinfecting of surfaces and tools, and regular testing of its employees for COVID-19. The remaining non-essential workforce was required to perform their duties from home.

Rockley intends to continue to monitor the situation and may adjust its current policies as more information and public health guidance become available. Any precautionary measures that Rockley has adopted or may adopt could negatively affect Rockley’s sales and marketing efforts, delay and lengthen its sales cycles, and create operational or other challenges, any of which could harm its business and results of operations. In addition, COVID-19 may disrupt the operations of Rockley’s customers and channel partners for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns, all of which could negatively impact Rockley’s business and results of operations, including cash flows.

The ongoing impact will depend on the duration of the pandemic, which is being mitigated by advances in the treatment of the disease, prevention efforts including vaccines, broad government measures to contain the spread of the virus, and related government stimulus measures. However, should Rockley experience sustained impact from the pandemic, additional actions such as cost reduction measures may need to be implemented. The impact of COVID-19 is fluid and uncertain, but it has caused and may continue to cause various negative effects, including an inability to meet with actual or potential customers; customers deciding to delay or abandon their planned product development programs and product commercialization timelines; increased requests for delayed payment terms by customers and channel partners; changes in the demand of Rockley’s products, which may cause it to reprioritize its engineering and research and development efforts; and delays or possible disruptions in its supply chain. Until the COVID-19 pandemic is contained and global economic activity stabilizes, it will continue to be more difficult for Rockley to forecast its operating results.

The recurrence or continued effects of a global economic downturn as a result of the COVID-19 pandemic could have an adverse effect on Rockley’s business and operating results.

Rockley operates globally and as a result its business and revenue are impacted by global macroeconomic conditions. The multinational efforts to contain the spread of COVID-19 had a significant adverse effect on the global macroeconomic environment. In addition, the instability in the global credit markets, uncertainties regarding the effects of Brexit, uncertainties related to the timing of the lifting of governmental restrictions to mitigate the spread of COVID-19, uncertainties related to changes in public policies such as domestic and international regulations, taxes, or international trade agreements, international trade disputes, government shutdowns, geopolitical turmoil, and other disruptions to global and regional economies and markets could continue to add uncertainty to global economic conditions.

These adverse conditions could result in longer sales, development, and production cycles, slower adoption of new technologies, and increased price competition. As a result, any continued or further uncertainty, weakness, or deterioration in global macroeconomic and market conditions may cause Rockley’s customers to modify spending priorities or delay purchasing decisions, and result in lengthened sales, development, and production cycles, any of which could harm its business and operating results.

Item 6.

Exhibits


Exhibit Number		Description

2.1†		Business Combination Agreement and Plan of Merger, dated as of March 19, 2021, by and among SC Health Corporation, Rockley Photonics Limited, Rockley Photonics Holdings Limited and Rockley Mergersub Limited (incorporated by reference from Annex A contained in the Registration Statement on Form S-4 (File No. 333-255109)).

3.1		Amended and Restated Memorandum and Articles of Association of Rockley Photonics Holdings Limited.

4.1		Warrant Agreement among American Stock Transfer & Trust Company, SC Health Corporation and SC Health Holdings Limited (incorporated by reference from Exhibit 4.1 to the Registration Statement on Form S-4 (File No. 333-255109)).

4.2		Assignment, Assumption and Amendment Agreement among Computershare Trust Company, N.A., Computershare Inc., SC Health Corporation, SC Health Holdings Limited and Rockley Photonics Holdings Limited.

4.3		Form of Specimen Warrant Certificate of Rockley Photonics Holdings Limited (incorporated by reference from Exhibit 4.3 to the Registration Statement on Form S-4 (File No. 333-255109)).

4.4		Form of Specimen Ordinary Share Certificate of Rockley Photonics Holdings Limited (incorporated by reference from Exhibit 4.4 to the Registration Statement on Form S-4 (File No. 333-255109)).

4.5		Form of Lock-Up Agreement.

10.1†		Form of Investor Subscription Agreement (incorporated by reference from Annex E contained in the Registration Statement on Form S-4 (File No. 333-255109)).

10.2†		Form of Individual Subscription Agreement (incorporated by reference from Annex F contained in the Registration Statement on Form S-4 (File No. 333-255109).

10.3†		Form of Registration Rights and Lock-up Agreement (incorporated by reference from Annex G contained in the Registration Statement on Form S-4 (File No. 333-255109)).

10.4+		Form of Indemnification Agreement between Rockley Photonics Holdings Limited and its officers and directors (incorporated by reference from Exhibit 10.7 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.5+†		Rockley Photonics Holdings Limited 2021 Stock Incentive Plan and the Forms of Stock Option Agreement, Restricted Stock Unit Agreement and Restricted Stock Agreement.

10.6+		Rockley Photonics Limited 2013 Equity Incentive Plan and Forms of Stock Option Agreements (incorporated by reference from Exhibit 10.9 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.7+†		Rockley Photonics Holdings Limited Employee Stock Purchase Plan.

10.8		Investment Management Trust Agreement, dated July 11, 2019, by and between the SC Health Corporation and American Stock Transfer & Trust Company, LLC (incorporated by reference from Exhibit 10.11 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.9		Sino-Foreign Equity Joint Venture Contract, dated December 19, 2017, by and between Hengtong Optic-Electric Co., Ltd. and Rockley Photonics Limited (incorporated by reference from Exhibit 10.12 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.10		Intra Group Loan Agreement, dated February 24, 2021, by and between Rockley Photonics Oy and Rockley Photonics Limited (incorporated by reference from Exhibit 10.13 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.11		Lease Agreement, dated November 20, 2015, by and between 21st Century Techbanq LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.14 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.12		First Amendment to Lease Agreement, dated April 27, 2016, by and between 21st Century Techbanq Pasadena LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.15 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.13		Second Amendment to Lease Agreement, dated April 7, 2017, by and between 21st Century Techbanq Pasadena LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.16 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.14		Third Amendment to Lease Agreement, dated November 1, 2017, by and between 21st Century Techbanq Pasadena LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.17 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.15		Fourth Amendment to Lease Agreement, dated August 6, 2019, by and between 21st Century Techbanq Pasadena LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.18 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.16		Fifth Amendment to Lease Agreement, dated May 24, 2020, by and between 21st Century Techbanq Pasadena LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.19 to the Registration Statement on Form S-4 (File No. 333-255109)).


Exhibit Number		Description

10.17		Sixth Amendment to Lease Agreement, dated January 27, 2021, by and between 21st Century Techbanq Pasadena LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.20 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.18		Seventh Amendment to Lease Agreement, dated January 27, 2021, by and between 21st Century Techbanq Pasadena LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.21 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.19		Office Lease, dated November 27, 2018, by and between RiverPark Tower I Owner LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.22 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.20		Office Lease, dated January 11, 2021, by and between Boardwalk Office Associates, LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.23 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.21		First Amendment to Office Lease, dated January 21, 2021, by and between Boardwalk Office Associates, LLC and Rockley Photonics, Inc. (incorporated by reference from Exhibit 10.24 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.22		Licence, dated November 26, 2018, by and between Newport Wafer Fab Limited and Rockley Photonics Limited (incorporated by reference from Exhibit 10.25 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.23†		Amendment and Restated Facility Agreement between Rockley Photonics Limited, Certain Companies as Guarantors, Argentum Securities Ireland plc as Original Lender, Credit Suisse International as Agent and Security Agent, and SIG-I Capital AG as Arranger.

10.24+		Employment Agreement dated April 1, 2020, by and between Andrew Rickman and Rockley Photonics Limited (incorporated by reference from Exhibit 10.27 to the Registration Statement on Form S-4 (File No. 333-255109)).

10.25+		Equity Side Letter with Andrew Rickman.

10.26+		Deed of Amendment to Andrew Rickman’s Employment Agreement.

10.27+		Deed of Termination to Rockley Ventures Limited Consultancy Agreement.

10.28+		Amended and Restated Employment Agreement for Mahesh Karanth.

10.29+		Amended and Restated Employment Agreement for Amit Nagra.

10.30+		Non-Employee Director Compensation Policy.

31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1#		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2#		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34—47986, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10 Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933 except to the extent that the Company specifically incorporates it by reference.

†	Certain exhibits and schedules to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby agrees to furnish a copy of any omitted exhibits or schedules to the SEC upon request.

+	Indicates a management contract or compensatory plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Rockley Photonics Holdings Limited

Date: August 16, 2021		/s/ Dr. Andrew Rickman, OBE
	Name:	Dr. Andrew Rickman, OBE
	Title	Chief Executive Officer
		(Principal Executive Officer)

Date: August 16, 2021		/s/ Mr. Mahesh Karanth
	Name:	Mr. Mahesh Karanth
	Title	Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 3.1

THE COMPANIES ACT (REVISED)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

SECOND AMENDED AND RESTATED

MEMORANDUM OF ASSOCIATION

ROCKLEY PHOTONICS HOLDINGS LIMITED

(adopted by a Special Resolution passed on August 9, 2021 and

effective August 11, 2021)

1	The name of the Company is Rockley Photonics Holdings Limited.

The registered office of the Company shall be at the offices of International Corporation Services Ltd., Harbour Place 2nd Floor, 103 South Church Street, P.O. Box 472, George Town, Grand Cayman KYI-1106, Cayman Islands, British West Indies or at such other place as the Directors may from time to time decide.

3	The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Act (Revised) or as the same may be revised from time to time, or any other law of the Cayman Islands.

4	The liability of each Member is limited to the amount from time to time unpaid on such Member’s shares.

The authorized share capital of the Company is US$50,000 divided into 12,417,500,000 shares of a nominal or par value of US$0.000004026575398 each. The Company has the power to redeem or purchase any of its shares and to increase or reduce the said capital subject to the provisions of the Companies Act (Revised) and the Articles of Association and to issue any part of its capital, whether original, redeemed or increased with or without any preference, priority or special privilege or subject to any postponement of rights or to any conditions or restrictions and so that unless the conditions of issue shall otherwise expressly declare every issue of shares whether declared to be preference or otherwise shall be subject to the powers hereinbefore contained.

6	The Company has the power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

7	Capitalized terms that are not defined in this Memorandum of Association bear the same meaning as those given in the Articles of Association of the Company.

THE COMPANIES ACT (REVISED)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

SECOND AMENDED AND RESTATED

ARTICLES OF ASSOCIATION

ROCKLEY PHOTONICS HOLDINGS LIMITED

(adopted by a Special Resolution passed on August 9, 2021 and

effective August 11, 2021)

INTERPRETATION

1	In these Articles, Table A in the Schedule in the Companies Act does not apply and unless otherwise defined, the defined terms shall have the meanings assigned to them as follows:


“Articles”		these Articles of Association of the Company as altered or added to, from time to time;

“Board” or “Board of Directors”		the board of Directors for the time being of the Company;

“Business Day”		a day (excluding Saturdays or Sundays), on which banks in London, United Kingdom, California, United States and New York, United States are open for general banking business throughout their normal business hours;

“Chairman”		the Chairman appointed pursuant to Article 78;

“Commission”		Securities and Exchange Commission of the United States of America or any other federal agency for the time being administering the Securities Act;

“Companies Act”		the Companies Act (Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof. Where any provision of the Companies Act is referred to, the reference is to that provision as amended by any law for the time being in force;

“Company”		Rockley Photonics Holdings Limited, a Cayman Islands company limited by shares;

“Company’s Website”		the website of the Company, the address or domain name of which has been notified to Members;

“Designated Stock Exchange”		The New York Stock Exchange or any other internationally recognized stock exchange where the Company’s securities are traded;

“Directors”		the directors of the Company for the time being, or as the case may be, the Directors assembled as a Board or as a committee thereof;

“electronic”		the meaning given to it in the Electronic Transactions Act;

“electronic communication”		electronic posting to the Company’s Website, transmission to any number, address or internet website or other electronic delivery methods as otherwise decided and approved by not less than two-thirds of the vote of the Board;

“Electronic Record”		has the same meaning as in the Electronic Transactions Act;


“Electronic Transactions Act”		the Electronic Transactions Act (Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof. Where any provision of the Electronic Transactions Act is referred to, the reference is to that provision as amended by any law for the time being in force;

“in writing”		includes writing, printing, lithograph, photograph, type-writing and every other mode of representing words or figures in a legible and non-transitory form and, only where used in connection with a notice served by the Company on Members or other persons entitled to receive notices hereunder, shall also include a record maintained in an electronic medium which is accessible in visible form so as to be useable for subsequent reference;

“Member”		the meaning given to it in the Companies Act;

“Memorandum of Association”		the Memorandum of Association of the Company, as amended and re-stated from time to time;

“month”		calendar month;

“Ordinary Resolution”		a resolution: (a) passed by a simple majority of votes cast by such Members as, being entitled to do so, vote in person or, in the case of any Member being an organization, by its duly authorized representative or, where proxies are allowed, by proxy at a general meeting of the Company; or (b) approved in writing by all of the Members entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Members and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments if more than one, is executed;

“paid up”		paid up as to the par value and any premium payable in respect of the issue of any shares and includes credited as paid up;

“Register of Members”		the register to be kept by the Company in accordance with the Companies Act;

“seal”		the Common Seal of the Company (if adopted) including any facsimile thereof;

“Securities Act”		the Securities Act of 1933 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;

“share”		any share in the capital of the Company and includes a fraction of a share;

“signed”		includes a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a person with the intent to sign the electronic communication;

“Special Resolution”		the meaning given to it in the Companies Act and includes a unanimous written resolution;

“Statutes”		the Companies Act and every other laws and regulations of the Cayman Islands for the time being in force concerning companies and affecting the Company;

“Treasury Share”		means a Share held in the name of the Company as a treasury share in accordance with the Companies Act;

“year”		calendar year.

2	In these Articles, save where the context requires otherwise:

(a)

words importing the singular number shall include the plural number and vice versa;

(b)

words importing the masculine gender only shall include the feminine gender;

(c)

words importing persons only shall include companies or associations or bodies of persons, whether corporate or not;

(d)

“written” and “in writing” include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record;

(e)

“may” shall be construed as permissive and “shall” shall be construed as imperative;

(f)

a reference to a dollar or dollars (or $) is a reference to dollars of the United States;

(g)

references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced;

(h)

any phrase introduced by the terms “including”, “include”, “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;

(i)

the term “and/or” is used herein to mean both “and” as well as “or.” The use of “and/or” in certain contexts in no respects qualifies or modifies the use of the terms “and” or “or” in others. The term “or” shall not be interpreted to be exclusive and the term “and” shall not be interpreted to require the conjunctive (in each case, unless the context otherwise requires);

(j)

headings are inserted for reference only and shall be ignored in construing the Articles;

(k)

any requirements as to delivery under the Articles include delivery in the form of an Electronic Record;

(l)

any requirements as to execution or signature under the Articles including the execution of the Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act;

(m)

Section 8 and 19(3) of the Electronic Transactions Act shall not reply;

(n)

the term “clear days” in relation to the period of a notice means that period excluding the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect;

(o)

the term “holder” in relation to a Share means a person whose name is entered in the Register of Members as the holder of such Share.

3	Subject to the last two preceding Articles, any words defined in the Companies Act shall, if not inconsistent with the subject or context, bear the same meaning in these Articles.

PRELIMINARY

4	The business of the Company may be conducted as the Directors see fit.

The registered office of the Company shall be at such address in the Cayman Islands as the Directors shall from time to time determine. The Company may in addition establish and maintain such other offices and places of business and agencies in such places as the Directors may from time to time determine.

ISSUE OF SHARES

6	Subject to the provisions, if any, in the Memorandum of Association, these Articles and to any direction that may be given by the Company in a general meeting, the Directors may, in their absolute discretion and

without approval of the existing Members, issue shares, grant rights over existing shares or issue other securities in one or more series as they deem necessary and appropriate and determine designations, powers, preferences, privileges and other rights, including dividend rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers and rights associated with the shares held by existing Members, at such times and on such other terms as they think proper. The Company shall not issue shares in bearer form.

7	The Directors may provide, out of the unissued shares, for series of preferred shares. Before any preferred shares of any such series are issued, the Directors shall fix, by resolution or resolutions, the following provisions of the preferred shares thereof:

(a)

the designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different from the par value thereof;

(b)

whether the shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be general or limited;

(c)

the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any shares of any other class or any other series of preferred shares;

(d)

whether the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditions of such redemption;

(e)

the amount or amounts payable upon preferred shares of such series upon, and the rights of the holders of such series in, a voluntary or involuntary liquidation, dissolution or winding up, or upon any distribution of the assets, of the Company;

(f)

whether the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof;

(g)

whether the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series of preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange;

(h)

the limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existing shares or shares of any other class of shares or any other series of preferred shares;

(i)

the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional shares, including additional shares of such series or of any other class of shares or any other series of preferred shares; and

(j)

any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof.

Without limiting the foregoing and subject to Article 78, the voting powers of any series of preferred shares may include the right, in the circumstances specified in the resolution or resolutions providing for the issuance of such preferred shares, to elect one or more Directors who shall serve for such term and have such voting powers as shall be stated in the resolution or resolutions providing for the issuance of such preferred shares. The term of office and voting powers of any Director elected in the manner provided in the immediately preceding sentence of this Article 7 may be greater than or less than those of any other Director or class of Directors.

The powers, preferences and relative, participating, optional and other special rights of each series of preferred shares, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. All shares of any one series of preferred shares shall be identical in all respects with all other shares of such series, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon shall be cumulative.

REGISTER OF MEMBERS AND SHARE CERTIFICATES

The Company shall maintain a Register of its Members and a Member shall only be entitled to a share certificate if the Directors resolve that share certificates shall be issued. Share certificates (if any) shall specify the share or shares held by that person and the amount paid up thereon, provided that in respect of a share or shares held jointly by several persons the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all. All certificates for shares shall be delivered personally or sent through the post addressed to the Member entitled thereto at the Member’s registered address as appearing in the register.

10	All share certificates shall bear legends required under the applicable laws, including the Securities Act.

11	Any two or more certificates representing shares of any one class held by any Member may at the Member’s request be cancelled and a single new certificate for such shares issued in lieu on payment (if the Directors shall so require) of US$1.00 or such smaller sum as the Directors shall determine.

If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed, a new certificate representing the same shares may be issued to the relevant Member upon request subject to delivery up of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such conditions as to evidence and indemnity and the payment of out-of-pocket expenses of the Company in connection with the request as the Directors may think fit.

13	In the event that shares are held jointly by several persons, any request may be made by any one of the joint holders and if so made shall be binding on all of the joint holders.

TRANSFER OF SHARES

14 (a) Subject

to the terms of the Articles, any Member may transfer all or any of his Shares by an instrument of transfer provided that such transfer complies with the rules and regulations of the Designated Stock Exchange, the United States Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. If the Shares in question were issued in conjunction with rights, options or warrants issued pursuant to the Articles on terms that one cannot be transferred without the other, the Directors shall refuse to register the transfer of any such Share without evidence satisfactory to them of the like transfer of such option or warrant.

(b)

The instrument of transfer of any Share shall be in writing in the usual or common form or in a form prescribed by the rules and regulations of the Designated Stock Exchange, the United States Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law or in any other form approved by the Directors and shall be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Directors may approve from time to time. The transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered in the Register of Members.

15	The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods

as the Board may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year.

The instrument of transfer of any share shall be in writing and executed by or on behalf of the transferor (and if the Directors so require, signed by the transferee). The transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the Register of Members.

17	All instruments of transfer that shall be registered shall be retained by the Company.

REDEMPTION AND PURCHASE OF OWN SHARES

Subject to the provisions of the Companies Act the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member or the Company. The redemption of such Shares shall be effected in such manner and upon such other terms as the Company may, by Special Resolution, determine before the issue of the Shares.

19	Subject to the provisions of the Companies Act, the Company may purchase its own Shares (including any redeemable Shares) in such manner and on such other terms as the Directors may agree with the relevant Member.

20	The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Companies Act, including out of capital.

21	The Directors may accept the surrender for no consideration of any fully paid Share.

TREASURY SHARES

22	The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share.

23	The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration).

VARIATION OF RIGHTS ATTACHING TO SHARES

If at any time the share capital of the Company is divided into different classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares of that class, or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class.

25	The provisions of these Articles relating to general meetings shall apply to every such general meeting of the holders of one class or series of shares except the following:

(a)

separate general meetings of the holders of a class or series of shares may be called only by (i) the Chairman of the Board, or (ii) a majority of the entire Board of Directors (unless otherwise specifically provided by the terms of issue of the shares of such class or series). Nothing in this Article 25 or Article 24 shall be deemed to give any Member or Members the right to call a class or series meeting.

(b)

the necessary quorum shall be one or more persons holding or representing by proxy at least one-third of the issued shares of the class or series and that any holder of shares of the class or series present in person or by proxy may demand a poll.

The rights conferred upon the holders of the shares of any class or series shall not, unless otherwise expressly provided by the terms of issue of the shares of that class or series, be deemed to be varied by the creation or issue of further shares ranking in priority thereto or pari passu therewith.

COMMISSION ON SALE OF SHARES

The Company may in so far as the Statutes from time to time permit pay a commission to any person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any shares of the Company. Such commissions may be satisfied by the payment of cash or the lodgement of fully or partly paid-up shares or partly in one way and partly in the other. The Company may also on any issue of shares pay such brokerage as may be lawful.

NON-RECOGNITION OF TRUSTS

No person shall be recognised by the Company as holding any share upon any trust and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future, or partial interest in any share, or any interest in any fractional part of a share, or (except only as is otherwise provided by these Articles or the Statutes) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder.

CALLS ON SHARES

Subject to the terms of allotment, the Directors may from time to time make calls upon the Members in respect of any money unpaid on their shares, and each Member shall (subject to receiving at least 14 calendar days notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on his shares. A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed.

30	The joint holders of a share shall be jointly and severally liable to pay calls in respect thereof.

If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest upon the sum at the rate of eight percent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part.

The provisions of these Articles as to the liability of joint holders and as to payment of interest shall apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the amount of the share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified.

33	The Directors may make arrangements on the issue of shares for a difference between the Members, or the particular shares, in the amount of calls to be paid and in the times of payment.

The Directors may, if they think fit, receive from any Member willing to advance the same all or any part of the monies uncalled and unpaid upon any shares held by him, and upon all or any of the monies so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction of an Ordinary Resolution, eight percent per annum) as may be agreed upon between the Member paying the sum in advance and the Directors. No such sum paid in advance of calls shall entitle the Member paying such sum to any portion of a dividend declared in respect of any period prior to the date upon which such sum would, but for such payment, become presently payable.

FORFEITURE OF SHARES

If a Member fails to pay any call or instalment of a call on the day appointed for payment thereof, the Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of such much of the call or instalment as is unpaid, together with any interest which may have accrued.

The notice shall name a further day (not earlier than the expiration of 14 calendar days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed the shares in respect of which the call was made will be liable to be forfeited.

37	If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by notice has been made, be forfeited by a resolution of the Directors to that effect.

38	A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit.

A person whose shares have been forfeited shall cease to be a Member in respect of the forfeited shares, but shall, notwithstanding, remain liable to pay to the Company all monies which at the date of forfeiture were payable by him to the Company in respect of the shares, but his liability shall cease if and when the Company receives payment in full of the fully paid up amount of the shares.

A certificate in writing under the hand of a Director of the Company, which certifies that a share has been forfeited on a date stated in the certificate, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. The Company may receive the consideration, if any, given for the share or any sale or disposition thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of and he shall thereupon be registered as the holder of the share, and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.

The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which by the terms of issue of a share becomes due and payable, whether on account of the amount of the share, or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

TRANSMISSION OF SHARES

The legal personal representative of a deceased sole holder of a share shall be the only person recognised by the Company as having any title to the share. In the case of a share registered in the name of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only person recognised by the Company as having any title to the share.

Any person becoming entitled to a share in consequence of the death or bankruptcy of a Member shall upon such evidence being produced as may from time to time be properly required by the Directors, have the right either to be registered as a Member in respect of the share or, instead of being registered himself, to make such transfer of the share as the deceased or bankrupt person could have made. If the person so becoming entitled shall elect to be registered himself as holder he shall deliver or send to the Company a notice in writing signed by him stating that he so elects.

A person becoming entitled to a share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a Member in respect of the share, be entitled in

respect of it to exercise any right conferred by membership in relation to meetings of the Company, provided however, that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within 90 calendar days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the share until the requirements of the notice have been complied with.

ALTERATION OF CAPITAL

45	The Company may by Ordinary Resolution:

(a)

increase the share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;

(b)

consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

(c)

sub-divide its existing shares or any of them into shares of a smaller amount provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived;

(d)

cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.

46	Subject to the provisions of the Statutes and these Articles as regards to the matters to be dealt with by Ordinary Resolution, the Company may by Special Resolution reduce its share capital and any capital redemption reserve in any manner authorized by law.

47	All new shares created hereunder shall be subject to the same provisions with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the shares in the original share capital.

CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE

For the purpose of determining those Members that are entitled to receive notice of, attend or vote at any meeting of Members or any adjournment thereof, or those Members that are entitled to receive payment of any dividend, or in order to make a determination as to who is a Member for any other purpose, the Directors may provide that the Register of Members shall be closed for transfers for a stated period but not to exceed in any case 30 calendar days. If the Register of Members shall be so closed for the purpose of determining those Members that are entitled to receive notice of, attend or vote at a meeting of Members such register shall be so closed for at least 10 calendar days immediately preceding such meeting and the record date for such determination shall be the date of the closure of the Register of Members.

In lieu of or apart from closing the Register of Members, the Directors may fix in advance a date as the record date for any such determination of those Members that are entitled to receive notice of, attend or vote at a meeting of the Members and for the purpose of determining those Members that are entitled to receive payment of any dividend, the Directors may, at or within 90 calendar days prior to the date of declaration of such dividend fix a subsequent date as the record date of such determination.

If the Register of Members is not so closed and no record date is fixed for the determination of those Members entitled to receive notice of, attend or vote at a meeting of Members or those Members that are entitled to receive payment of a dividend, the date on which notice of the meeting is posted or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Members. When a determination of those Members that are entitled to receive notice of, attend or vote at a meeting of Members has been made as provided in this section, such determination shall apply to any adjournment thereof.

GENERAL MEETINGS

51	All general meetings of the Company other than annual general meetings shall be called extraordinary general meetings.

52 (a)

The Company may hold an annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as the Directors shall determine.

(b)

At these meetings the report of the Directors (if any) shall be presented.

53 (a)

The Directors may call general meetings, and they shall on a Members requisition forthwith proceed to convene an extraordinary general meeting of the Company.

(b)

A Members requisition is a requisition of Members of the Company holding at the date of deposit of the requisition not less than one-third of the share capital of the Company as at that date carries the right of voting at general meetings of the Company.

(c)

The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the principal place of business of the Company (with a copy forwarded to the registered office), and may consist of several documents in like form each signed by one or more requisitionists.

(d)

If the Directors do not within 21 calendar days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further 21 calendar days, the requisitionists, or any of them representing more than one half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three months after the expiration of the second said 21 calendar days.

(e)

A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors.

NOTICE OF GENERAL MEETINGS

At least seven calendar days’ notice shall be given for any general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this regulation has been given and whether or not the provisions of these Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed:

(a)

in the case of an annual general meeting by all the Members (or their proxies) entitled to attend and vote thereat; and

(b)

in the case of an extraordinary general meeting by a majority in number of the Members (or their proxies) having a right to attend and vote at the meeting, being a majority together holding not less than ninety five percent in par value of the shares giving that right.

55	The accidental omission to give notice of a meeting to or the non-receipt of a notice of a meeting by any Member shall not invalidate the proceedings at any meeting.

PROCEEDINGS AT GENERAL MEETINGS

No business shall be transacted at any general meeting unless a quorum of Members is present at the time when the meeting proceeds to business. One or more Members holding not less than an aggregate of one-third of all voting share capital of the Company in issue present in person or by proxy and entitled to vote shall be a quorum for all purposes.

If provided for by the Company, a person may participate at a general meeting by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a general meeting in this manner is treated as presence in person at that meeting.

If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Members, shall be dissolved. In any other case it shall stand adjourned to the same day in the next week, at the same time and place, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the meeting shall be dissolved.

59	The Chairman of the Board of Directors shall preside as chairman at every general meeting of the Company.

If at any meeting the Chairman of the Board of Directors is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, the Directors present shall elect one of their members to be chairman of the meeting, or, if no Director is so elected and willing to be chairman of the meeting, the Members present shall choose a chairman of the meeting.

The chairman may with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting) adjourn a meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for 10 calendar days or more, not less than 7 Business Days’ notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by one or more Members present in person or by proxy entitled to vote and who together hold not less than 10 percent of the paid up voting share capital of the Company, and unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of, or against, that resolution.

63	If a poll is duly demanded it shall be taken in such manner as the chairman directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand for a poll may be withdrawn.

64	In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote.

65	A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs.

VOTES OF MEMBERS

Subject to any rights and restrictions for the time being attached to any class or classes of shares, every Member present in person and every person representing a Member by proxy at a general meeting of the Company shall have one vote for each share registered in his name in the Register of Members.

67	In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.

68	A Member of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee, or other person in the

nature of a committee appointed by that court, and any such committee or other person, may on a poll, vote by proxy.

69	No Member shall be entitled to vote at any general meeting unless all calls or other sums presently payable by him in respect of shares in the Company have been paid.

70	On a poll, votes may be given either personally or by proxy.

71	The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorized. A proxy need not be a Member of the Company.

72	An instrument appointing a proxy may be in any usual or common form or such other form as the Directors may approve. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

73	The instrument appointing a proxy shall be deposited at the registered office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company:

(a)

not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or

(b)

in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll; or

(c)

where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded, be delivered at the meeting at which the poll was demanded to the chairman or to the secretary or to any Director;

provided that the Directors may in the notice convening the meeting, or in an instrument of proxy sent out by the Company, direct that the instrument appointing a proxy may be deposited (no later than the time for holding the meeting or adjourned meeting) at the registered office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company. The chairman may in any event at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted shall be invalid.

Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer was received by the Company before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy.

CORPORATIONS ACTING BY REPRESENTATIVES AT MEETING

Any corporation or other non-natural person which is a Member may in accordance with its constitutional documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual Member.

DEPOSITARY AND CLEARING HOUSES

76	If a recognised clearing house (or its nominee(s)) or depositary (or its nominee(s)) is a Member of the Company it may, by resolution of its directors or other governing body or by power of attorney, authorise

such Person(s) as it thinks fit to act as its representative(s) at any general meeting of the Company or of any Class of Members of the Company provided that, if more than one Person is so authorised, the authorisation shall specify the number and Class of Shares in respect of which each such Person is so authorised. A Person so authorised pursuant to this Article shall be entitled to exercise the same powers on behalf of the recognised clearing house (or its nominee(s)) or depositary (or its nominee(s)) which he represents as that recognised clearing house (or its nominee(s)) or depositary (or its nominee(s)) could exercise if it were an individual Member holding the number and Class of Shares specified in such authorisation, including the right to vote individually on a show of hands.

SHARES THAT MAY NOT BE VOTED

77	Shares in the Company that are beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding Shares at any given time.

DIRECTORS

78 (a)

Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than one or more than nine Directors. The Directors shall be elected or appointed in the first place by the subscribers to the Memorandum of Association or by a majority of them and thereafter by the Members at general meeting.

(b)

The Directors shall be divided into three (3) classes designated as Class I, Class II and Class III, respectively. Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the board of Directors. At the 2022 annual general meeting of the Company, the term of office of the Class I Directors shall expire and Class I Directors shall be elected for a full term of three (3) years. At the 2023 annual general meeting of the Company, the term of office of the Class II Directors shall expire and Class II Directors shall be elected for a full term of three (3) years. At the 2024 annual general meeting of the Company, the term of office of the Class III Directors shall expire and Class III Directors shall be elected for a full term of three (3) years. At each succeeding annual general meeting of the Company, Directors shall be elected for a full term of three (3) years to succeed the Directors of the class whose terms expire at such annual general meeting. Notwithstanding the foregoing provisions of this Article, each Director shall hold office until the expiration of his term, until his successor shall have been duly elected and qualified or until his earlier death, resignation or removal. No decrease in the number of Directors constituting the board of Directors shall shorten the term of any incumbent Director.

(c)

The Board of Directors shall have a Chairman (the “Chairman”) elected and appointed by a majority of the Directors then in office. The Directors may also elect a Co-Chairman or a Vice-Chairman of the Board of Directors (the “Co-Chairman”). The Chairman shall preside as chairman at every meeting of the Board of Directors. To the extent the Chairman is not present at a meeting of the Board of Directors, the Co-Chairman, or in his absence, the attending Directors may choose one Director to be the chairman of the meeting. The Chairman’s voting right as to the matters to be decided by the Board of Directors shall be the same as other Directors.

(d)

The Company may by Ordinary Resolution elect any person to be a Director either to fill a casual vacancy on the Board or, subject to the first sentence of Article 78(a), as an addition to the existing Board.

(e)

The Directors by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting, or the sole remaining Director, shall have the power from time to time and at any time to appoint any person as a Director to fill a casual vacancy on the Board or, subject to the

first sentence of Article 78(a), as an addition to the existing Board, subject to the Company’s compliance with director nomination procedures required under applicable corporate governance rules of the Designated Stock Exchange, as long as the Company’s securities are traded on the Designated Stock Exchange. Any Director appointed in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of Directors in which the new directorship was created or the vacancy occurred and until such Director’s successor shall have been duly elected and qualified or until his or her earlier resignation, death or removal. When the number of Directors is increased or decreased, the board of Directors shall, subject to Article 78(b), determine the class or classes to which the increased or decreased number of Directors shall be apportioned; provided, however, that no decrease in the number of Directors shall shorten the term of any incumbent Director. In the event of a vacancy in the board of Directors, the remaining Directors, except as otherwise provided by law, shall exercise the powers of the full board of Directors until the vacancy is filled.

79	Subject to Article 78, a Director may be removed from office but only for cause and only by Ordinary Resolution at any time before the expiration of his term.

A vacancy on the Board created by the removal of a Director under the provisions of Article 79 above may be filled by the election or appointment by Ordinary Resolution at the meeting at which such Director is removed or by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting. Any Director elected or appointed in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of Directors in which the new directorship was created or the vacancy occurred and until such Director’s successor shall have been duly elected and qualified or until his or her earlier resignation, death or removal. When the number of Directors is increased or decreased, the board of Directors shall, subject to Article 78 above, determine the class or classes to which the increased or decreased number of Directors shall be apportioned; provided, however, that no decrease in the number of Directors shall shorten the term of any incumbent Director. In the event of a vacancy in the board of Directors, the remaining Directors, except as otherwise provided by law, shall exercise the powers of the full board of Directors until the vacancy is filled.

The Board may, from time to time, and except as required by applicable law or the listing rules of the Designated Stock Exchange where the Company’s securities are traded, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives, which shall be intended to set forth the policies of the Company and the Board on various corporate governance related matters as the Board shall determine by resolution from time to time.

82	A Director shall not be required to hold any shares in the Company by way of qualification. A Director who is not a Member of the Company shall nevertheless be entitled to receive notice of and to attend and speak at general meetings of the Company and all classes of shares of the Company.

DIRECTORS’ FEES AND EXPENSES

The Directors may receive such remuneration as the Board may from time to time determine. The Directors may be entitled to be repaid all travelling, hotel and incidental expenses reasonably incurred or expected to be incurred by him in attending meetings of the Board or committees of the Board or general meetings or separate meetings of any class of shares or of debentures of the Company or otherwise in connection with the discharge of his duties as a Director.

Any Director who, by request, goes or resides abroad for any purpose of the Company or who performs services which in the opinion of the Board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration provided for by or pursuant to any other Article.

ALTERNATE DIRECTOR

Any Director may in writing appoint another person to be his alternate to act in his place at any meeting of the Directors at which he is unable to be present. Every such alternate shall be entitled to notice of meetings of the Directors and to attend and vote thereat as a Director when the person appointing him is not personally present and, where he is a Director, to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time in writing revoke the appointment of an alternate appointed by him. Such alternate shall be deemed for all purposes to be a Director and shall not be deemed to be the agent of the Director appointing him. An alternate Director shall cease to be an alternate Director if his appointor ceases to be a Director.

Any Director may appoint any person, whether or not a Director, to be the proxy of that Director to attend and vote on his behalf, in accordance with instructions given by that Director, or in the absence of such instructions at the discretion of the proxy, at a meeting or meetings of the Directors which that Director is unable to attend personally. The instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in any usual or common form or such other form as the Directors may approve, and must be lodged with the chairman of the meeting at which such proxy is to be used, or first used, prior to the commencement of the meeting.

POWERS AND DUTIES OF DIRECTORS

Subject to the provisions of the Companies Act, these Articles and to any resolutions made in a general meeting, the business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company. No resolution made by the Company in a general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been made.

Subject to these Articles, the Directors may from time to time appoint any person, whether or not a Director of the Company, to hold such office in the Company as the Directors may think necessary for the administration of the Company, including without prejudice to the foregoing generality, the office of the Chief Executive Officer, Chief Operating Officer, Chief Technology Officer, Chief Financial Officer, one or more Vice Presidents, Manager or Controller, and for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit. The Directors may also appoint one or more of their body (but not an alternate Director) to the office of Managing Director upon like terms, but any such appointment shall ipso facto determine if any Managing Director ceases from any cause to be a Director, or if the Company by Ordinary Resolution resolves that his tenure of office be terminated.

89	The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.

The Directors may from time to time and at any time by power of attorney appoint any company, firm or person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Directors may think fit, and may also authorise any such attorney to delegate all or any of the powers, authorities and discretion vested in him.

91	The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the following paragraphs shall be without prejudice to the general powers conferred by this paragraph.

The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any persons to be members of such committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any of the aforesaid.

The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorise the members for the time being of any such local board, or any of them to fill up any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any person so appointed and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.

94	Any such delegates as aforesaid may be authorised by the Directors to sub-delegate all or any of the powers, authorities, and discretions for the time being vested to them.

The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party.

96	The Company intends that it shall be UK tax resident and the Board of Directors shall conduct its business in a manner consistent with that intention.

VACATION OF OFFICE OF DIRECTOR

97	Notwithstanding anything in these Articles, the office of Director shall be vacated if the Director:

(a)

dies, becomes bankrupt or makes any arrangement or composition with his creditors;

(b)

is found to be or becomes of unsound mind;

(c)

resigns his office by notice in writing to the Company; or

(d)

shall be removed from office pursuant to Articles 78 or 79 or the Statutes.

PROCEEDINGS OF DIRECTORS

98	The Directors may meet together (whether within or outside the Cayman Islands) for the dispatch of business, adjourn, and otherwise regulate their meetings and proceedings as they think fit.

99	A Board meeting may be called by a Director by giving notice in writing to the Board specifying a date, time and agenda for such meeting. The Board shall upon receipt of such notice give a copy of such notice of such meeting to all Directors and their respective alternates (if any).

100 (a)

At least ten (10) Business Days’ notice shall be given to all Directors and their respective alternates (if any) for a Board meeting, provided that such notice period may be reduced or waived with the consent of all the Directors or their respective alternates (if any).

(b)

An agenda identifying in reasonable detail the issues to be considered by the Directors at any such meeting and copies (in printed or electronic form) of any relevant papers to be discussed at the meeting together with all relevant information shall be provided to and received by all Directors and their alternates (if any) at least five (5) Business Days prior to the date for such meeting. The agenda for each meeting shall include any matter submitted to the Company by any Director at least one (1) Business Day prior to the date for such meeting.

(c)

Unless approved by all Directors (whether or not present or represented at such meeting), matters not set out in the agenda need not be considered at a Board meeting.

101

A Director or Directors may participate in any meeting of the Board of Directors, or of any committee appointed by the Board of Directors of which such Director or Directors are members, by means of conference telephone, video conference or similar communication equipment by way of which all persons participating in such meeting can hear each other and such participation shall be deemed to constitute presence in person at the meeting.

102	The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors and unless so fixed shall be a majority of the Directors then in office, provided that a Director and his appointed alternate Director shall be considered only one person for this purpose.

103

If a quorum is not present at a Board meeting within thirty (30) minutes following the time appointed for such Board meeting, the relevant meeting shall be adjourned for a period of at least three (3) Business Days and the presence of any three (3) Directors shall constitute a quorum at such adjourned meeting. A meeting of the Directors at which a quorum is present when the meeting proceeds to business shall be competent to exercise all powers and discretions for the time being exercisable by the Directors.

104	Questions arising at any meeting of the Directors shall be decided by a majority of votes and each Director shall be entitled to one (1) vote in deciding matters deliberated at any meeting of the Directors.

105

A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made. A Director may vote in respect of any contract or proposed contract or arrangement notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration.

106

A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested, be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement.

107

Any Director may act by himself or his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director; provided that nothing herein contained shall authorise a Director or his firm to act as auditor to the Company.

108	The Directors shall cause minutes to be made in books or loose-leaf folders provided for the purpose of recording:

(a)

all appointments of officers made by the Directors;

(b)

the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and

(c)

all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors.

109	When the chairman of a meeting of the Directors signs the minutes of such meeting, the same shall be deemed to have been duly held notwithstanding that all the Directors have not actually come together or that there may have been a technical defect in the proceedings.

110	A resolution signed by all the Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors duly called and constituted and when signed, a resolution may consist of several documents each signed by one or more of the Directors.

111

The continuing Directors may act, notwithstanding any vacancy in their body, but if their number is reduced below the number fixed pursuant to these Articles as the necessary quorum of Directors, then the continuing Directors may act only to increase the number or to summon a general meeting of the Company, but for no other purpose.

112

A committee appointed by the Directors may elect a chairman of its meetings. If no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the members present may choose one of their number to be chairman of the meeting.

113	A committee appointed by the Directors may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority of votes of the committee members present and in case of an equality of votes the chairman shall have a second or casting vote.

114

All acts done by any meeting of the Directors or of a committee of Directors, or by any person acting as a Director, shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director.

PRESUMPTION OF ASSENT

115

A Director who is present at a meeting of the Board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action.

DIRECTORS’ INTERESTS

116 (a)

A Director or alternate Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine.

(b)

A Director or alternate Director may act by himself or by, through or on behalf of his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director or alternate Director.

(c)

A Director or alternate Director may be or become a director or other officer of or otherwise interested in any company promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such Director or alternate Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other company.

(d)

No person shall be disqualified from the office of Director or alternate Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director or alternate Director shall be in any way interested be or be liable to be avoided, nor shall any Director or alternate Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in connection with any such contract or transaction by reason of such Director or alternate Director holding office or of the fiduciary relationship thereby established. A Director (or his alternate Director in his absence) shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of the interest of any Director or alternate Director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote thereon.

(e)

A general notice that a Director or alternate Director is a shareholder, director, officer or employee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such general notice it shall not be necessary to give special notice relating to any particular transaction.

DIVIDENDS, DISTRIBUTIONS AND RESERVE

117

Subject to any rights and restrictions for the time being attached to any class or classes of shares and these Articles, the Directors may from time to time declare dividends (including interim dividends) and other distributions on shares in issue and authorise payment of the same out of the funds of the Company lawfully available therefor.

118	Subject to any rights and restrictions for the time being attached to any class or classes of shares and these Articles, the Company by Ordinary Resolution may declare dividends, but no dividend shall exceed the amount recommended by the Directors.

119

The Directors may, before recommending or declaring any dividend, set aside out of the funds legally available for distribution such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for meeting contingencies, or for equalising dividends or for any other purpose to which those funds may be properly applied and pending such application may, at the like discretion, either be employed in the business of the Company or be invested in such investments (other than shares of the Company) as the Directors may from time to time think fit.

120

Any dividend may be paid by cheque or wire transfer to the registered address of the Member or person entitled thereto, or in the case of joint holders, to any one of such joint holders at his registered address or to such person and such address as the Member or person entitled, or such joint holders as the case may be, may direct. Every such cheque shall be made payable to the order of the person to whom it is sent or to the order of such other person as the Member or person entitled, or such joint holders as the case may be, may direct.

121	The Directors when paying dividends to the Members in accordance with the foregoing provisions may make such payment either in cash or in specie.

122	No dividend shall be paid otherwise than out of profits or, subject to the restrictions of the Companies Act, the share premium account.

123

Subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends shall be declared and paid according to the amounts paid or credited as fully paid on the shares, but if and so long as nothing is paid up on any of the shares in the Company dividends may be declared and paid according to the amounts of the shares. No amount paid on a share in advance of calls shall, while carrying interest, be treated for the purposes of this Article as paid on the share.

124	If several persons are registered as joint holders of any share, any of them may give effectual receipts for any dividend or other monies payable on or in respect of the share.

125	No dividend shall bear interest against the Company.

126

Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors, be paid into a separate account in the Company’s name, provided that the Company shall not be constituted as a trustee in respect of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable shall be forfeited and shall revert to the Company.

BOOK OF ACCOUNTS

127

The Directors shall cause proper books of account (including, where applicable, material underlying documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. Such books of account must be retained for a minimum period of five years from the date on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions.

128

The Directors shall determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by Statutes or authorised by the Directors or by the Company in general meeting.

129	The Directors may cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.

130

Subject to the requirements of applicable law and the listing rules of the Designated Stock Exchange, the accounts relating to the Company’s affairs shall be audited in such manner and with such financial year end as may be determined from time to time by the Company by Ordinary Resolution or failing any such determination by the Directors or failing any determination as aforesaid shall not be audited.

ANNUAL RETURNS AND FILINGS

131	The Board shall make the requisite annual returns and any other requisite filings in accordance with the Companies Act.

AUDIT

132	The Directors may appoint an Auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his or their remuneration.

133

Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors.

134

Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an ordinary company, and at the next special meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any time during their term of office, upon request of the Directors at any general meeting of the Members.

THE SEAL

135

The Seal of the Company shall not be affixed to any instrument except by the authority of a resolution of the Board of Directors provided always that such authority may be given prior to or after the affixing of the Seal and if given after may be in general form confirming a number of affixings of the Seal. The Seal shall be affixed in the presence of any one or more persons as the Directors may appoint for the purpose and every person as aforesaid shall sign every instrument to which the Seal of the Company is so affixed in their presence.

136

The Company may maintain a facsimile of its Seal in such countries or places as the Directors may appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of a resolution of the Board of Directors provided always that such authority may be given prior to or after the affixing of such facsimile Seal and if given after may be in general form confirming a number of affixings of such facsimile Seal. The facsimile Seal shall be affixed in the presence of such person or persons as the Directors shall for this purpose appoint, and such person or persons as aforesaid shall sign every instrument to which the facsimile Seal of the Company is so affixed in their presence .

137	Notwithstanding the foregoing, a Director shall have the authority to affix the Seal, or the facsimile Seal, to any instrument for the purposes of attesting authenticity of the matter contained therein but which does not create any obligation binding on the Company.

OFFICERS

138

Subject to Article 86, the Company may have Chief Executive Officer, Chief Operating Officer, Chief Technology Officer, Chief Financial Officer, one or more Vice Presidents, Manager or Controller, appointed by the Directors. The Directors may also from time to time appoint such other officers as they consider necessary, all for such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors from time to time subscribe.

CAPITALISATION OF PROFITS

139	Subject to the Companies Act and these Articles, the Board may, with the authority of an Ordinary Resolution:

(a)

resolve to capitalise an amount standing to the credit of reserves (including a share premium account, capital redemption reserve and profit and loss account), whether or not available for distribution;

(b)

appropriate the sum resolved to be capitalised to the Members in proportion to the nominal amount of shares (whether or not fully paid) held by them respectively and apply that sum on their behalf in or towards:

(i)

paying up the amounts (if any) for the time being unpaid on shares held by them respectively; or

(ii)

paying up in full unissued shares or debentures of a nominal amount equal to that sum,

and allot the shares or debentures, credited as fully paid, to the Members (or as they may direct) in those proportions, or partly in one way and partly in the other, but the share premium account, the capital redemption reserve and profits which are not available for distribution may, for the purposes of this Article, only be applied in paying up unissued shares to be allotted to Members credited as fully paid;

(c)

make any arrangements it thinks fit to resolve a difficulty arising in the distribution of a capitalised reserve and in particular, without limitation, where shares or debentures become distributable in fractions the Board may deal with the fractions as it thinks fit;

(d)

authorise a person to enter (on behalf of all the Members concerned) an agreement with the Company providing for either:

(i)

the allotment to the Members respectively, credited as fully paid, of shares or debentures to which they may be entitled on the capitalisation, or

(ii)

the payment by the Company on behalf of the Members (by the application of their respective operations of the reserves resolved to be capitalised) of the amounts or part of the amounts remaining unpaid on their existing shares,

an agreement made under the authority being effective and binding on all those Members; and

(e)

generally do all acts and things required to give effect to the resolution.

NOTICES

140

Except as otherwise provided in these Articles, any notice shall be in writing and may be given by the Company to any Member either personally or by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where the notice is given by e-mail by sending it to the e-mail address provided by such Member). or by placing it on the Company’s Website. In the case of joint holders of a share, all notices shall be given to that one of the joint holders whose name stands first in the Register of Members in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders.

141	Notices posted to addresses outside the Cayman Islands shall be forwarded by prepaid airmail.

142	Any Member present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened.

143	Any notice or other document, if served by:

(a)

post, service of the notice shall be deemed to have been served five calendar days after the time when the letter containing the same is posted (in proving such service it shall be sufficient to prove that the letter containing the notice or document was properly addressed and duly posted);

(b)

cable, telex or fax, service of the notice shall be deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received on the same day that it was transmitted;

(c)

recognised courier service, service of the notice shall be deemed to have been served 48 hours after the time when the letter containing the same is delivered to the courier service and in proving such service it shall be sufficient to prove that the letter containing the notice or documents was properly addressed and duly delivered to the courier; or

(d)

e-mail, service of the notice shall be deemed to be effected by transmitting the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on the same day that it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient.

144

Any notice or document delivered or sent to any Member in accordance with the terms of these Articles shall notwithstanding that such Member be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any share registered in the name of such Member as sole or joint holder, unless his name shall at the time of the service of the notice or document, have been removed from the Register of Members as the holder of the share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the share.

145	Notice of every general meeting shall be given to:

(a)

all Members who have supplied to the Company an address for the giving of notices to them;

(b)

every person entitled to a share in consequence of the death or bankruptcy of a Member, who but for his death or bankruptcy would be entitled to receive notice of the meeting; and

(c)

each Director and Alternate Director.

No other person shall be entitled to receive notices of general meetings.

INFORMATION

146

No Member shall be entitled to require discovery of any information in respect of any detail of the Company’s trading or any information which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Board would not be in the interests of the Members of the Company to communicate to the public.

147	The Board shall be entitled to release or disclose any information in its possession, custody or control regarding the Company or its affairs to any of its members including, without limitation, information contained in the Register of Members and transfer books of the Company.

INDEMNITY

148

Every Director (including for the purposes of this Article any Alternate Director appointed pursuant to the provisions of these Articles) and officer of the Company or a Group Company for the time being and from time to time including for 6 years following ceasing to be a director or officer shall be indemnified and secured harmless out of the assets and funds of the Company against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by him in connection with the execution or discharge of his duties, powers, authorities or discretions as a Director or officer of the Company or a Group Company, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by him in defending (whether successfully or otherwise) any civil proceedings concerning the Company or a Group Company or its affairs in any court whether in the Cayman Islands or elsewhere.

149	No such Director or officer of the Company or a Group Company shall be liable to the Company or the relevant Group Company for any loss or damage unless such liability arises through the wilful neglect or wilful default of such Director or officer.

150

The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or other officer of the Company against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company.

FINANCIAL YEAR

151	Unless the Directors otherwise prescribe, the financial year of the Company shall end on December 31st in each year and shall begin on January 1st in each year.

WINDING UP

152	If the Company shall be wound up the liquidator shall apply the assets of the Company in satisfaction of creditors’ claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in a winding up:

(a)

if the assets available for distribution amongst the Members shall be insufficient to repay the whole of the Company’s issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them; or

(b)

if the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the Company’s issued share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise.

153

If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares and with the approval of a Special Resolution of the Company and any other approval required by the Statutes, divide amongst the Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like approval, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability.

AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION AND

NAME OF COMPANY

154	The Company may at any time and from time to time by Special Resolution alter or amend these Articles or the Memorandum of Association of the Company, in whole or in part, or change the name of the Company.

REGISTRATION BY WAY OF CONTINUATION

155

The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. In furtherance of a resolution adopted pursuant to this Article, the Directors may cause an application to be made to the Registrar of Companies to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company.

MERGERS AND CONSOLIDATIONS

156	The Company shall have the power to merge or consolidate with one or more other constituent companies (as defined in the Companies Act) upon such terms as the Directors may determine and (to the extent required by the Companies Act) with the approval of a Special Resolution.

LOCK-UP

157

Each Member shall enter into a customary lock-up agreement on the terms and to the extent required by the financial advisors engaged by the Company (or by any entity to which the Company is successor in interest) in connection with the business combination of Rockley Photonics Limited and SC Health Corporation in

order to facilitate the admission of all or any of the Shares on the Designated Stock Exchange, including provision that any lock-up shall not exceed 180 days from the effective date of the Company’s registration statement on Form S-4 (Registration No. 333-255019).

158

If any Member fails to comply with the provisions of Article 157, the Company shall be constituted the agent of each defaulting Member for taking such actions as are necessary to effect the lock-up and the Directors may authorise an officer or member to execute and deliver on behalf of such defaulting Member the necessary documents to effect the lock-up, including, without limitation, a lock-up agreement, in a form approved by the Board.

Exhibit 4.2

ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

This Assignment, Assumption and Amendment Agreement (this “Warrant Assumption Agreement”) is made as of August 11, 2021, by and among SC Health Corporation, a Cayman Islands exempted company (the “Company”), Rockley Photonics Holdings Limited, an exempted company incorporated in the Cayman Islands with limited liability (“HoldCo”), Computershare Inc., a Delaware corporation (“Computershare Inc.”), Computershare Trust Company, N.A., a federally chartered trust company and a wholly owned subsidiary of Computershare Inc. (“Trust Company” and together with Computershare Inc., “Computershare”, whereby Computershare shall serve as the successor warrant agent in place of American Stock Transfer & Trust Company, LLC, a New York limited liability trust company (“AST”)), and SC Health Holdings Limited, a Cayman Islands exempted company (the “Sponsor”).

WHEREAS, the Company, the Sponsor and AST (in its capacity as Warrant Agent) are parties to that certain Warrant Agreement, dated as of July 11, 2019, and filed with the United States Securities and Exchange Commission on July 17, 2019 (the “Existing Warrant Agreement”);

WHEREAS, capitalized terms used herein but not otherwise defined in this Warrant Assumption Agreement shall have the meanings ascribed to such terms in the Existing Warrant Agreement;

WHEREAS, pursuant to the Existing Warrant Agreement, the Company issued (a) 5,450,000 warrants to the Sponsor (the “Private Placement Warrants”) to purchase Class A Ordinary Shares of the Company, par value $0.0001 per share (each, an “Ordinary Share”) simultaneously with the closing of the Company’s initial public offering (the “Public Offering”) (including the full exercise of the underwriters’ over-allotment option), at a purchase price of $1.00 per Private Placement Warrant, with each Private Placement Warrant being exercisable for one Ordinary Share and with an exercise price of $11.50 per share, and (b) 8,625,000 warrants to public investors in the Public Offering (the “Public Warrants” and together with the Private Placement Warrants, the “Warrants”) to purchase Ordinary Shares, with each Public Warrant being exercisable for one Ordinary Share and with an exercise price of $11.50 per share;

WHEREAS, all of the Warrants are governed by the Existing Warrant Agreement;

WHEREAS, on March 19, 2021, a Business Combination Agreement (the “Business Combination Agreement”) was entered into by and among the Company, HoldCo, Rockley Mergersub Limited, an exempted company incorporated in the Cayman Islands with limited liability and a direct wholly owned subsidiary of HoldCo (“Merger Sub”), and Rockley Photonics Limited, a company incorporated under the laws of England and Wales with company number 08683015 (the “Target”);

WHEREAS, pursuant to the terms and conditions of the Business Combination Agreement, the Target will complete a business combination transaction pursuant to which, among other things (a) the Target will propose a scheme of arrangement under Part 26 of the UK Companies Act 2006, as amended, as a transfer scheme pursuant to which the Target’s shareholders (the “Target Shareholders”) will transfer all their respective shares in Target to HoldCo in exchange for the same number of ordinary shares of HoldCo (“HoldCo Ordinary Shares”) and (b) following the consummation of the Exchange (as defined in the Business Combination Agreement), Merger Sub will merge with and into the Company, with the Company surviving such merger as a direct wholly owned subsidiary of HoldCo (the “Merger”) and, in the context of such Merger, all of the SPAC Ordinary Shares (other than Excluded Shares) (each, as defined in the Business Combination Agreement) outstanding immediately prior to the Merger Effective Time (as defined in the Business Combination Agreement) shall be exchanged with HoldCo for the right to receive Merger Consideration (as defined in the Business Combination Agreement) in the form of HoldCo Ordinary Shares pursuant to a share capital increase of HoldCo, as set forth in the Business Combination Agreement and in accordance with the Companies Act (Revised) of the Cayman Islands;

WHEREAS, upon consummation of the Merger, as provided in Section 4.4 of the Existing Warrant Agreement, each of the issued and outstanding Warrants will no longer be exercisable for Ordinary Shares but instead will be exercisable (subject to the terms and conditions of the Existing Warrant Agreement as amended hereby) for HoldCo Ordinary Shares;

WHEREAS, the board of directors of the Company has determined that the consummation of the transactions contemplated by the Business Combination Agreement will constitute a Business Combination (as defined in Section 3.2 of the Existing Warrant Agreement);

WHEREAS, in connection with the Merger, the Company desires to assign all of its right, title and interest in the Existing Warrant Agreement to HoldCo and HoldCo wishes to accept such assignment;

WHEREAS, AST has provided a notice of its intent to resign as Warrant Agent under the Existing Warrant Agreement, which resignation shall be effective immediately prior to the Merger Effective Time but subject to the consummation of the Merger at the Merger Effective Time;

WHEREAS, the Company and the Sponsor have agreed to accept AST’s resignation as Warrant Agent under the Existing Warrant Agreement, and to appoint Computershare as Warrant Agent in place of AST, in each case effective immediately prior to Merger Effective Time but subject to the consummation of the Merger at the Merger Effective Time; and in furtherance of the foregoing each of the Company and the Sponsor has waived, among other things, the requirements in Section 9.2.1 of the Existing Warrant Agreement (i) that AST provide the Company with its notice of resignation sixty (60) days prior to the date of resignation and (ii) that the successor Warrant Agent be a New York corporation with its principal office in the Borough of Manhattan;

WHEREAS, in accordance with Section 9.2.1 of the Existing Warrant Agreement, after appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent thereunder, without any further act or deed; and

WHEREAS, Section 10.8 of the Existing Warrant Agreement provides that the Company, the Sponsor and the Warrant Agent may amend the Existing Warrant Agreement without the consent of any Registered Holders (as defined in the Existing Warrant Agreement) (i) for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained therein or adding or changing any other provisions with respect to matters or questions arising under the Existing Warrant Agreement as the Company, the Sponsor, and the Warrant Agent may deem necessary or desirable and that the Company, the Sponsor and the Warrant Agent deem shall not adversely affect the interest of the Registered Holders, and (ii) to provide for the delivery of Alternative Issuance pursuant to Section 4.4 of the Existing Warrant Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:

1.	Assignment and Assumption; Consent; Appointment.

1.1.

Assignment and Assumption. The Company hereby assigns to HoldCo all of the Company’s right, title and interest in and to the Existing Warrant Agreement (as amended hereby) as of the Merger Effective Time (as defined in the Business Combination Agreement). HoldCo hereby assumes, and agrees to pay, perform, satisfy and discharge in full, as the same become due, all of the Company’s liabilities and obligations under the Existing Warrant Agreement (as amended hereby) arising from and after the Merger Effective Time.

1.2.

Consent. Each of Computershare and the Sponsor hereby consents to the assignment of the Existing Warrant Agreement by the Company to HoldCo pursuant to Section 1.1 hereof effective as of the Merger Effective Time, the assumption of the Existing Warrant Agreement by HoldCo from the Company pursuant to Section 1.1 hereof effective as of the Merger Effective Time, and to the continuation of the Existing Warrant Agreement in full force and effect from and after the Merger Effective Time, subject at all times to the Existing Warrant Agreement (as amended hereby) and to all of the provisions, covenants, agreements, terms and conditions of the Existing Warrant Agreement and this Warrant Assumption Agreement.

Amendment of Existing Warrant Agreement. The Company, the Sponsor and Computershare hereby amend the Existing Warrant Agreement as provided in this Section 2, effective as of the Merger Effective Time, and acknowledge and agree that the amendments to the Existing Warrant Agreement set forth in this Section 2 are (i) necessary or desirable and that such amendments do not adversely affect the interests of the Registered Holders and/or (ii) provide for the delivery of Alternative Issuance pursuant to Section 4.4 of the Existing Warrant Agreement:

2.1.

Preamble. The preamble on page one of the Existing Warrant Agreement is hereby amended by (i) deleting “SC Health Corporation, a Cayman Islands exempted company (the “Company”)” and replacing it with “Rockley Photonics Holdings Limited, an exempted company incorporated in the Cayman Islands with limited liability (the “Company”)”; and (ii) deleting “American Stock Transfer & Trust Company, LLC, a New York limited liability trust company, as warrant agent (the “Warrant Agent”)” and replacing it with “Computershare Inc., a Delaware corporation (“Computershare Inc.”), Computershare Trust Company, N.A., a federally chartered trust company and a wholly owned subsidiary of Computershare Inc. (“Trust Company” and together with Computershare Inc., in such capacity as warrant agent, the “Warrant Agent”)”. As a result thereof, all references in the Existing Warrant Agreement and the amendments to the Existing Warrant Agreement below (i) to the “Company” shall be references to HoldCo and (ii) to “Warrant Agent” shall be to Computershare Inc. and Trust Company, together.

2.2.

Recitals. The recitals on pages one and two of the Existing Warrant Agreement are hereby deleted and replaced in their entirety as follows:

“WHEREAS, SC Health Corporation, a Cayman Islands exempted company (“SC Health”) has entered into that certain Private Placement Warrants Purchase Agreement, with the Sponsor (the “Private Placement Warrants Purchase Agreement”), pursuant to which the Sponsor agreed to purchase an aggregate of 5,450,000 warrants simultaneously with the closing of the Offering bearing the legend set forth in Exhibit A hereto (the “Private Placement Warrants”) at a purchase price of $1.00 per Private Placement Warrant; and

WHEREAS, SC Health and SC Health Group Limited, a Cayman Islands exempted company (the “Purchaser”) entered into that certain Termination Agreement to Forward Purchase Agreement, dated May 20, 2021, terminating that certain Forward Purchase Agreement by and between SC Health and Purchaser, dated as of July 11, 2019 (the “Forward Purchase Agreement”), and no Forward Purchase Warrants have been issued thereunder; and

WHEREAS, in order to finance SC Health’s transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor may, but is not obligated to, loan to SC Health funds as SC Health may require, of which up to $2,000,000 of such loans may be convertible into up to an additional 2,000,000 warrants, which will be identical to the Private Placement Warrants, at a price of $1.00 per warrant; and

WHEREAS, SC Health consummated an initial public offering (the “Offering”) of units of SC Health’s equity securities, each such unit comprised of one Ordinary Share (as defined below) and one-half of one redeemable Public Warrant (as defined below) (the “Units”) and, in connection therewith, issued and delivered 8,625,000 warrants to public investors in the Offering (the “Public Warrants”). Each whole Warrant entitles the holder thereof to purchase one Class A Ordinary Share of SC Health, par value $0.0001 per share (“Ordinary Share”), for $11.50 per share, subject to adjustment as described herein; and

WHEREAS, SC Health has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1, File No. 232240 (the “Registration Statement”), and prospectus (the “Prospectus”) for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Units, the Public Warrants and the Ordinary Shares included in the Units; and

WHEREAS, SC Health, the Company, Rockley Mergersub Limited, an exempted company incorporated in the Cayman Islands with limited liability and a direct wholly owned subsidiary of (“Merger Sub”), and Rockley Photonics Limited, a company incorporated under the laws of England and Wales with company number 08683015, are parties to that certain Business

Combination Agreement, dated as of March 19, 2021 (the “Business Combination Agreement”), which, among other things, provides, following the consummation of the Exchange (as defined in the Business Combination Agreement), for the merger of Merger Sub with and into SC Health with SC Health surviving such merger as a wholly owned subsidiary of the Company (the “Merger”), and, as a result of the Merger, all Ordinary Shares shall be exchanged for the right to receive ordinary shares of the Company (“Company Ordinary Shares”); and

WHEREAS, on August 11, 2021, pursuant to the terms of the Business Combination Agreement, the Company, SC Health and the Warrant Agent entered into an Assignment, Assumption and Amendment Agreement (the “Warrant Assumption Agreement”), pursuant to which SC Health assigned its rights and obligations under this Agreement to the Company and the Company assumed SC Health’s rights and obligations under this Agreement from SC Health; and

WHEREAS, pursuant to the Business Combination Agreement, the Warrant Assumption Agreement and Section 4.4 of this Agreement, effective as of the Merger Effective Time (as defined in the Business Combination Agreement), each of the issued and outstanding Private Placement Warrants and Public Warrants shall no longer be exercisable for Ordinary Shares but shall instead become exercisable (subject to the terms and conditions of this Agreement) for Company Ordinary Shares (each a “Warrant” and collectively, the “Warrants”); and

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and

WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and

WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:”

2.3.

Reference to Company Ordinary Shares. All references to “Ordinary Share” or “Ordinary Shares” and “Class A Ordinary Share” or “Class A Ordinary Shares” in the Existing Warrant Agreement (including all Exhibits thereto) shall mean “Company Ordinary Share” or “Company Ordinary Shares”, as applicable, with a nominal value of $0.000004026575398 per share.

2.4.

Detachability of Warrants. Section 2.4 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“[INTENTIONALLY OMITTED]”

Except that the defined terms “Business Day” and “Detachment Date” set forth therein shall be retained for all purposes of the Existing Warrant Agreement.

2.5.

Private Placement Warrants; Forward Purchase Warrants.

2.5.1.

“Forward Purchase Warrants” is hereby deleted from the heading of Section 2.6 of the Existing Agreement.

2.5.2.

All references to “Company” in Section 2.6.1(a) of the Existing Warrant Agreement are hereby deleted and replaced with “Sponsor”.

2.5.3.

Section 2.6.1(ii) of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“(ii) may not be transferred, assigned or sold until the date that is thirty (30) days after the Merger Effective Time”.

2.5.4.

Section 2.6.1(g) is hereby deleted and replaced with the following:

“[INTENTIONALLY OMITTED]”

2.5.5. Section 2.6.2 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“[INTENTIONALLY OMITTED]”

2.6.

Duration of Warrants. The first sentence of Section 3.2 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“A Warrant may be exercised only during the period commencing on the date that is thirty (30) days after the consummation of the transactions contemplated by the Business Combination Agreement (a “Business Combination”), and terminating at 5:00 p.m., New York City time on the earlier to occur of: (x) the date that is five (5) years after the date on which the Business Combination is completed, (y) the liquidation of the Company, or (z) other than with respect to the Private Placement Warrants, the Redemption Date (as defined below) as provided in Section 6.3 hereof (the “Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below, with respect to an effective registration statement.”

For the avoidance of doubt, any reference to “initial Business Combination” (or similar wording and/or construction) in the Existing Warrant Agreement is hereby replaced by the term “Business Combination” as defined above in Section 2.6 of this Warrant Assumption Agreement. Such Business Combination has now been completed pursuant to the Business Combination Agreement and therefore any terms or Sections of the Existing Warrant Agreement that are operational upon the Business Combination not being completed are no longer in force nor effect.

2.7.

Exercise of Warrants. The reference to “Compliance Department” in the first sentence of Section 3.3.1 is hereby deleted and replaced with “offices designated for such purposes”.

2.8.

Maximum Percentage. The reference to “American Stock Transfer & Trust Company, LLC” in Section 3.3.5 of the Existing Warrant Agreement is hereby deleted and replaced with “Computershare Inc.”.

2.9.

Extraordinary Dividends. Section 4.1.2(e) of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“[INTENTIONALLY OMITTED]”

2.10.

Adjustments in Exercise Price. Section 4.3.2(ii) and 4.3.2(iii) of the Existing Warrant Agreement are hereby deleted and replaced with the following:

“(ii) the aggregate gross proceeds from such issuance represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the transactions contemplated by the Business Combination on the Merger Effective Time (net of redemptions), and (iii) the volume weighted average trading price of the Company’s Ordinary Shares during the 20 trading day period starting on the Merger Effective Time (such price, the “Market Value”) is below $9.20 per share, the exercise price of the Warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described in Section 6.1 below will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.”

2.11.

Transfer of Warrants. Section 5.6 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“The Public Warrants may be separately traded, transferred or exchanged.”

2.12.

Sponsor’s Obligation to Repurchase. Section 7.1(i) and 7.1(ii) of the Existing Warrant Agreement are hereby deleted and replaced with the following:

“(i) the completion of the Business Combination, (ii) a proposed amendment to SC Health’s Charter that would affect the substance or timing of the SC Health’s obligation to redeem 100% of its public Ordinary Shares if the Business Combination is not consummated within the time period set forth in SC Health’s Charter, as amended, or”

2.13.

Escrow Account. Section 7.3 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“The Sponsor or an affiliate deposited cash funds in an amount equal to $8,625,000 into an escrow account maintained by the Warrant Agent at J.P. Morgan Chase Bank, N.A., which funds may be used to pay $1.00 per Public Warrant (other than Public Warrants held by the Sponsor and its affiliates) in connection with the events described under Section 7.1. For the avoidance of doubt, funds in the escrow account shall not be held in trust or comprise any portion of any pro-rata distribution from the Company’s trust account. Following a repurchase or payment to holders of Public Warrants in accordance with this Section 7, any amounts remaining in the escrow account will be returned to the Sponsor or its affiliate.”

2.14.

Concerning the Warrant Agent and Other Matters.

2.14.1. Appointment of Successor Warrant Agent. Section 9.2.1 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.”

2.14.2. Liability of the Warrant Agent. Sections 9.4.1 and 9.4.2 of the Existing Warrant Agreement are hereby deleted in their entirety and replaced with the following:

“9.4.1 Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, Secretary or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in the absence of bad faith by it pursuant to the provisions of this Agreement. The Warrant Agent shall not be required to take notice or be deemed to have notice of any event or condition for which the Company is required to notify Warrant Agent hereunder, unless the Warrant Agent shall be specifically notified in writing of such event or condition by the Company, and all notices or other instruments required by this Agreement to be delivered to the Warrant Agent must, in order to be effective, be received by the Warrant Agent as specified in Section 10.2 hereof, and in the absence of such notice so delivered, the Warrant Agent may conclusively assume no such event or condition exists. The Warrant Agent shall be fully protected in relying on any such notice and shall have no duty or liability (in the absence of bad faith by it) with respect to, and shall not be deemed to have knowledge of, any such event unless and until it shall have received such notice.

9.4.2 Indemnity; Liability. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith (which gross negligence, willful misconduct or bad faith must be determined by a judgment of a court of competent jurisdiction or agreed pursuant to a settlement agreement between the parties). Notwithstanding anything in this Agreement to the contrary, any liability of the Warrant Agent under this Agreement will be limited to three times the amount of annual fees paid by the Company to the Warrant Agent during the twelve (12) months immediately preceding the event for which recovery from the Warrant Agent is being sought; provided, that, such liability cap shall not apply in the case of the Warrant Agent’s own willful misconduct, bad faith or fraud (which willful misconduct, bad faith or fraud must be determined by a judgment of a court of competent jurisdiction or agreed pursuant to a settlement agreement between the parties), nor to any claims by Registered Holders of the Warrants which arise out of the gross negligence, willful misconduct, bad faith or fraud of the Warrant Agent. Anything to the contrary notwithstanding, in no event will the Warrant Agent be liable for special, punitive, indirect, incidental or consequential loss or damages of any kind whatsoever (including, without limitation, lost profits), even if the Warrant Agent has been advised of the likelihood of such loss or damages, and regardless of the form of action. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including, without limitation, the reasonable counsel fees and expenses of legal counsel), for anything done or omitted by the Warrant Agent in the execution, acceptance, administration, exercise and performance of its duties under this Agreement, including the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly, or enforcing its rights hereunder, except as a result of the Warrant Agent’s gross negligence, willful misconduct or bad faith (which gross negligence, willful misconduct or bad faith must be determined by a judgment of a court of competent jurisdiction or agreed pursuant to a settlement agreement between the parties).

The provisions of this Section 9.4 shall survive the expiration of the Warrants and the termination of this Agreement and the resignation, replacement or removal of the Warrant Agent. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company.”

2.15.

Notices. Section 10.2 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent, the Sponsor or by the holder of any Warrant to or on the Company shall be sufficiently given when in writing and so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:

Rockley Photonics Holdings Limited

3^rd Floor

1 Ashley Road

Altrincham, Cheshire

United Kingdom, WA14 2DT

Attention: Dr. Andrew Rickman

Email: andrew.rickman@rockleyphotonics.com

With copies to (which shall not constitute notice):

Pillsbury Winthrop Shaw Pittman LLP

31 West 52^nd Street

New York, New York 10019

Attention: James Masetti

Davina K Kaile

Jarrod Murphy

Email: jim.masetti@pillsburylaw.com

dkaile@pillsburylaw.com

jmurphy@pillsburylaw.com

and

Ropes & Gray International LLP

60 Ludgate Hill

London EC4M 7AW

United Kingdom

Attention: Elizabeth Todd

Nick Matthew

Email: Elizabeth.Todd@ropesgray.com

Nick.Matthew@ropesgray.com

Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant, the Sponsor or by the Company to or on the Warrant Agent shall be sufficiently given when in writing and so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:

Computershare Trust Company, N.A.

Computershare Inc.

250 Royall Street

Canton, MA 02021

Attention: Client Services

Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant, the Warrant Agent or by the Company to or on the Sponsor or SC Health shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Sponsor with the Warrant Agent), as follows:

SC Health Holdings Limited

108 Robinson Road #10-00

Singapore 068900

Republic of Singapore

Attention: AJ Coloma

Aaron Wee

Email: aj.coloma@sincapital.com

aaron.wee@sincapital.com

SC Health Corporation

108 Robinson Road #10-00

Singapore 068900

Republic of Singapore

Attention: AJ Coloma

Aaron Wee

Email: aj.coloma@sincapital.com

aaron.wee@sincapital.com”

With copies to (which shall not constitute notice):

Ropes & Gray International LLP

60 Ludgate Hill

London EC4M 7AW

United Kingdom

Attention: Elizabeth Todd

Nick Matthew

Email: Elizabeth.Todd@ropesgray.com

Nick.Matthew@ropesgray.com”

2.16.

Applicable Law. Section 10.3 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“(a) The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The courts of the State of New York or the United States District Court for the Southern District of New York shall be the sole and exclusive forum for any action, proceeding or claim against it arising out of or relating in any way to this Agreement and the Warrants.

(b) If any action the subject matter of which is within the scope of this Section 10.3 is filed in a court other than a court located within the State of New York (a “Foreign Action”) by any party, that party shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of New York in connection with any action brought in any such court to enforce this Section 10.3 (an “Enforcement Action”), and (y) having service of process made upon such party in any such Enforcement Action by service upon such party’s counsel in the Foreign Action as agent for such party.

(c) The federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933.”

2.17.

Amendments. Section 10.8 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“This Agreement may be amended by the parties hereto without the consent of any Registered Holder (i) for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders, and (ii) to provide for the delivery of Alternative Issuance pursuant to Section 4.4. All other modifications or amendments, including any modification or amendment to increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the Private Placement Warrants, shall require the vote or written consent of the Registered Holders of 50% of the number of the then outstanding Public Warrants and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of this Agreement with respect to the Private Placement Warrants, 50% of the number of the then outstanding Private Placement Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the Registered Holders.”

2.18.

Examination of Warrant Agreement. Section 10.5 of the Existing Warrant Agreement is hereby deleted and replaced with the following:

“A copy of this Agreement shall be available at all reasonable times for inspection by the Registered Holder of any Warrant at the office of the Warrant Agent designated for such purposes. The Warrant Agent may require any such holder to submit such holder’s Warrant for inspection by the Warrant Agent.”

2.19.

Currency. A new Section 10.10 is hereby inserted as follows:

“Currency. Unless otherwise specified in this Agreement, all references to currency, monetary values and dollars set forth herein shall mean U.S. dollars (USD) and all payments hereunder shall be made in U.S. dollars (USD).”

2.20.

Warrant Certificate. The Form of Warrant Certificate attached as Exhibit B to the Existing Warrant Agreement is hereby amended as of the Merger Effective Time (as defined in the Business Combination Agreement) by deleting such Exhibit B in its entirety and replacing it with the Form of Warrant Certificate attached as Exhibit A to this Warrant Assumption Agreement.

3.	Miscellaneous Provisions.

3.1.

Effectiveness of Warrant Assumption Agreement. Each of the parties hereto acknowledges and agrees that the effectiveness of this Warrant Assumption Agreement shall be expressly subject to the occurrence of the Exchange (as defined in the Business Combination Agreement) and the Merger and shall automatically be terminated and shall be null and void if the Business Combination Agreement shall be terminated for any reason, except that Computershare shall be compensated by Holdco for its reasonable cost and expenses incurred up to such termination date in connection with this Warrant Assumption Agreement and the Existing Warrant Agreement.

3.2.

Successors. All the covenants and provisions of this Warrant Assumption Agreement by or for the benefit of the Company, the Sponsor or Computershare shall bind and inure to the benefit of their respective successors and assigns.

3.3.

Severability. This Warrant Assumption Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Warrant Assumption Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant Assumption Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

3.4.

Applicable Law. The validity, interpretation and performance of this Warrant Assumption Agreement shall be governed in accordance with Section 10.3 of the Existing Warrant Agreement, as amended hereby.

3.5.

Counterparts. This Warrant Assumption Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Signatures to this Warrant Assumption Agreement transmitted by electronic mail in PDF form, or by any other electronic means designed to preserve the original graphic and pictorial appearance of a document (including DocuSign), will be deemed to have the same effect as physical delivery of the paper document bearing the original signatures.

3.6.

Effect of Headings. The section headings herein are for convenience only and are not part of this Warrant Assumption Agreement and shall not affect the interpretation thereof.

3.7.

Reference to and Effect on Agreements; Entire Agreement.

3.7.1.

Any references to “this Agreement” in the Existing Warrant Agreement will mean the Existing Warrant Agreement as amended by this Warrant Assumption Agreement. Except as specifically amended by this Warrant Assumption Agreement, the provisions of the Existing Warrant Agreement shall remain in full force and effect.

3.7.2.

This Warrant Assumption Agreement and the Existing Warrant Agreement, as modified by this Warrant Assumption Agreement, constitutes the entire understanding of the parties and supersedes all prior agreements, understandings, arrangements, promises and commitments, whether written or oral, express or implied, relating to the subject matter hereof, and all such prior agreements, understandings, arrangements, promises and commitments are hereby canceled and terminated.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, each of the parties has caused this Warrant Assumption Agreement to be duly executed as of the date first above written.


SC HEALTH CORPORATION



By:		/s/ AJ Coloma
Name:		AJ Coloma
Title:		Chief Executive Officer



ROCKLEY PHOTONICS HOLDINGS LIMITE



By:		/s/ Andrew Rickman
Name:		Andrew Rickman
Title:		Chief Executive Officer



COMPUTERSHARE INC.

COMPUTERSHARE TRUST COMPANY, N.A.



By:		/s/ Collin Ekeogu
Name:		Collin Ekeogu
Title:		Manager, Corporate Actions



SC HEALTH HOLDINGS LIMITED



By:		/s/ David Sin
Name:		David Sin
Title:		Director

[Signature Page to Assignment, Assumption and Amendment Agreement]

Exhibit 4.5

FORM OF LOCK-UP AGREEMENT

_________________, 2021

Rockley Photonics Holdings Limited

3^rd Floor 1 Ashley Road

Altrincham, Chesire

United Kingdom, QA14 2DT

Ladies and Gentlemen:

The undersigned understands that Rockley Photonics Holdings Limited (“Rockley”) has entered into a Business Combination Agreement, dated as of March 19, 2021 (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among Rockley, SC Health Corporation, an exempted company incorporated in the Cayman Islands with limited liability (“SPAC”), Rockley Mergersub Limited, an exempted company incorporated in the Cayman Islands with limited liability and a direct wholly owned subsidiary of Rockley (“Merger Sub”) that was formed for the purposes of consummating the transactions contemplated by the Business Combination Agreement and Rockley Photonics Limited, a company incorporated under the laws of England and Wales with company number 08683015 (“Target”), pursuant to which, among other things, (a) the Target will became a wholly-owned subsidiary of Rockley, and (b) Merger Sub, merged with and into SPAC (the “Merger”), with SPAC continuing as the surviving corporation as a direct, wholly owned subsidiary of Rockley, (the “Business Combination”). Pursuant to, and subject to the terms of, the Business Combination Agreement and upon consummation of the Merger (the “Closing”), the undersigned will receive shares of Rockley’s Ordinary Shares, nominal value $0.00001 per share.

As a material inducement for the parties referenced above to consummate the Merger and the Business Combination, the undersigned agrees that, without the prior written consent of Rockley, the undersigned shall not Transfer (as defined below) any Lock-up Shares (as defined below) prior to the end of the Lock-up Period (as defined below).

“Lock-up Shares” shall mean any and all Ordinary Shares, nominal value $0.00001 per share, of Rockley (the “Ordinary Shares”) and any and all other equity securities convertible into or exercisable or exchangeable for Ordinary Shares held by the undersigned, whenever acquired, and any and all Ordinary Shares issued with respect to or in exchange for options, notes awards, and/or other securities held by the undersigned (other than Ordinary Shares acquired in the public market).

The Lock-Up Period will commence immediately upon the Closing and continue until, and include the date that is, 180 days after the date of the Closing (the “Lock-Up Period”).

“Transfer” shall mean the (a) sale or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).

Further, in connection with any underwritten offering of equity securities of Rockley following the date of the Closing, the undersigned shall not Transfer any Lock-up Shares (other than those included in such offering, if any), without the prior written consent of Rockley, during the ninety (90)-day period (or such shorter time agreed to between Rockley and the managing underwriters of such offering) beginning on the date of pricing of such offering (such period, the “Offering Lock-Up Period”), except as expressly permitted by any lock-up agreement executed by the undersigned with the managing underwriters or in the event the managing underwriters otherwise agree by written consent. The undersigned agrees to execute a customary lock-up agreement in favor of the underwriters to such effect.

Notwithstanding the provisions set forth in this Lock-Up Agreement, the undersigned may Transfer the Lock-up Shares during the Lock-up Period or during the Offering Lock-Up Period: (a) to (i) Rockley’s officers or directors, or (ii) any affiliates or family members of Rockley’s officers or directors; (b) if the undersigned is a corporation, partnership (whether general, limited or otherwise), limited liability company, trust or other business entity, (i) to another corporation, partnership, limited liability company, trust, syndicate, association or other business entity that controls, is controlled by or is under common control or management with the undersigned, or (ii) as a distribution to its partners, limited liability company members, equity holders or shareholders; (c) in the case of an individual, (i) by gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person or entity, or to a charitable organization, (ii) by virtue of laws of descent and distribution upon death of the individual, or (iii) pursuant to a qualified domestic relations order; (d) in the case of a trust, by distribution to one or more of the permissible beneficiaries of such trust; (e) if an entity, to the partners, members or equity holders of the undersigned by virtue of the undersigned’s organizational documents, as amended, upon dissolution of the undersigned; (f) pursuant to bona fide pledges of Ordinary Shares as security or collateral in connection with any bona fide borrowing or incurrence of any indebtedness by the undersigned or any member of its group; provided, that if the undersigned is subject to any pre-clearance and trading policies of Rockley, the undersigned must also comply with any additional restrictions on the pledging of Ordinary Shares imposed on the undersigned by Rockley’s policies; (g) to Rockley; or (h) in

connection with a liquidation, merger, stock exchange, reorganization, tender offer approved by Rockley’s Board of Directors or a duly authorized committee thereof or other similar transaction which results in all of Rockley’s stockholders having the right to exchange their Ordinary Shares for cash, securities or other property subsequent to the Closing. The parties acknowledge and agree that any permitted transferee who receives Lock-up Shares in accordance with this paragraph shall be subject to the transfer restrictions set forth in this Lock-Up Agreement with respect to the Lock-Up Shares upon and after acquiring such Lock-Up Shares; and any such transfer shall be conditioned upon such transferee acknowledging and agreeing to such restrictions.

The undersigned agrees that Rockley may (i) with respect to any Ordinary Shares or other Rockley securities for which the undersigned is the record holder, cause the transfer agent for Rockley to note stop transfer instructions with respect to such securities on the transfer books and records of Rockley and (ii) with respect to any Ordinary Shares or other Rockley securities for which the undersigned is the beneficial holder but not the record holder, cause the record holder of such securities to cause the transfer agent for Rockley to note stop transfer instructions with respect to such securities on the transfer books and records of Rockley.

The undersigned hereby agrees that, to the extent that the terms of this Lock-Up Agreement conflict with or are in any way inconsistent with any registration rights agreement to which the undersigned and Rockley or its affiliates may be a party, this Lock-Up Agreement supersedes such registration rights agreement.

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

The undersigned understands and Rockley agrees that if the Business Combination Agreement is terminated prior to the Closing, the undersigned shall be released from all obligations under this Lock-Up Agreement and this Lock-Up Agreement shall be of no further force or effect. The undersigned understands that Rockley is proceeding with the Business Combination in reliance upon this Lock-Up Agreement.

[Signature Page Follows]


Very truly yours,

By:
Name:
Address:

[Signature page to Rockley Photonics Holdings Limited Lock-up Agreement]

Exhibit 10.5

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 STOCK INCENTIVE PLAN

(Adopted by the Board of Directors on March 31, 2021)

(Approved by the Shareholders on August 6, 2021)

Effective Date: August 11, 2021

TABLE OF CONTENTS


		Page
SECTION 1.	ESTABLISHMENT AND PURPOSE		6

SECTION 2.	DEFINITIONS		6

(a)	“2013 Plan”		6

(b)	“Affiliate”		6

(c)	“Award”		6

(d)	“Award Agreement”		6

(e)	“Board of Directors” or “Board”		6

(f)	“Cash-Based Award”		6

(g)	“Change in Control”		6

(h)	“Code”		7

(i)	“Committee”		7

(j)	“Company”		7

(k)	“Consultant”		7

(l)	“Disability”		7

(m)	“Employee”		7

(n)	“Exchange Act”		8

(o)	“Exercise Price”		8

(p)	“Fair Market Value”		8

(q)	“ISO”		8

(r)	“Nonstatutory Option” or “NSO”		8

(s)	“Option”		8

(t)	“Outside Director”		8

(u)	“Parent”		8

(v)	“Participant”		8

(w)	“Plan”		8

(x)	“Purchase Price”		9

(y)	“Restricted Share”		9

(z)	“Restricted Stock Unit”		9

(aa)	“Returning Shares”		9

(bb)	“SAR”		9

(cc)	“Section 409A”		9

(dd)	“Securities Act”		9

(ee)	“Service”		9


		Page

(ff)	“Share”		9

(gg)	“Stock”		9

(hh)	“Subsidiary”		9

SECTION 3.	ADMINISTRATION		10

(a)	Committee Composition		10

(b)	Committee Appointment		10

(c)	Committee Responsibilities		10

SECTION 4.	ELIGIBILITY		11

(a)	General Rule		11

(b)	Ten-Percent Shareholders		11

(c)	Attribution Rules		11

(d)	Outstanding Stock		11

SECTION 5.	STOCK SUBJECT TO PLAN; DIRECTOR COMPENSATION LIMIT		11

(a)	Basic Limitation		11

(b)	Additional Shares		12

(c)	Substitution and Assumption of Awards		12

(d)	Outside Director Compensation Limit		12

SECTION 6.	RESTRICTED SHARES		13

(a)	Restricted Share Award Agreement		13

(b)	Payment for Awards		13

(c)	Vesting		13

(d)	Voting and Dividend Rights		13

(e)	Restrictions on Transfer of Shares		13

SECTION 7.	TERMS AND CONDITIONS OF OPTIONS		13

(a)	Option Award Agreement		13

(b)	Number of Shares		13

(c)	Exercise Price		14

(d)	Withholding Taxes		14

(e)	Exercisability and Term		14

(f)	Exercise of Options		14

(g)	No Rights as a Shareholder		14

(h)	Modification, Extension and Renewal of Options		14

(i)	Restrictions on Transfer of Shares		14

(j)	Buyout Provisions		15


		Page

SECTION 8.	PAYMENT FOR SHARES		15

(a)	General Rule		15

(b)	Surrender of Stock		15

(c)	Services Rendered		15

(d)	Cashless Exercise		15

(e)	Exercise/Pledge		15

(f)	Net Exercise		15

(g)	Promissory Note		15

(h)	Other Forms of Payment		15

(i)	Limitations under Applicable Law		16

SECTION 9.	STOCK APPRECIATION RIGHTS		16

(a)	SAR Award Agreement		16

(b)	Number of Shares		16

(c)	Exercise Price		16

(d)	Exercisability and Term		16

(e)	Exercise of SARs		16

(f)	Modification, Extension or Assumption of SARs		16

(g)	Buyout Provisions		16

SECTION 10.	RESTRICTED STOCK UNITS		16

(a)	Restricted Stock Unit Award Agreement		16

(b)	Payment for Awards		17

(c)	Vesting Conditions		17

(d)	Voting and Dividend Rights		17

(e)	Form and Time of Settlement of Restricted Stock Units		17

(f)	Death of Participant		17

(g)	Creditors’ Rights

SECTION 11.	CASBASED AWARDS		18

SECTION 12.	ADJUSTMENT OF SHARES		18

(a)	Adjustments		18

(b)	Dissolution or Liquidation		18

(c)	Merger or Reorganization		18

(d)	Change in Control		19

(e)	Reservation of Rights		19

SECTION 13.	DEFERRAL OF AWARDS		20


		Page

(a)	Committee Powers		20

(b)	General Rules		20

SECTION 14.	AWARDS UNDER OTHER PLANS		20

SECTION 15.	PAYMENT OF DIRECTOR’S FEES IN SECURITIES		20

(a)	Effective Date		20

(b)	Elections to Receive NSOs, SARs, Restricted Shares, or Restricted Stock Units		21

(c)	Number and Terms of NSOs, SARs, Restricted Shares or Restricted Stock Units		21

SECTION 16.	LEGAL AND REGULATORY REQUIREMENTS		21

SECTION 17.	TAXES		21

(a)	Withholding Taxes		21

(b)	Share Withholding		21

(c)	Section 409A		21

SECTION 18.	TRANSFERABILITY		22

SECTION 19.	PERFORMANCE BASED AWARDS		22

SECTION 20.	RECOUPMENT OF AWARDS		22

SECTION 21.	NO EMPLOYMENT RIGHTS		22

SECTION 22.	DURATION AND AMENDMENTS		23

(a)	Term of the Plan		23

(b)	Right to Amend the Plan		23

(c)	Effect of Termination		23

SECTION 23.	AWARDS TO NON-U.S. PARTICIPANTS		23

SECTION 24.	GOVERNING LAW		23

SECTION 25.	SUCCESSORS AND ASSIGNS		24

SECTION 26.	EXECUTION		24

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 STOCK INCENTIVE PLAN

SECTION 1. ESTABLISHMENT AND PURPOSE.

The Plan was adopted by the Board of Directors on March 31, 2021 and is effective on August 11, 2021 (the “Effective Date”). The Plan’s purpose is to enhance the Company’s ability to attract, retain, incent, reward, and motivate persons who make (or are expected to make) important contributions to the Company and its Subsidiaries and Affiliates by providing Participants with equity ownership and other incentive opportunities.

SECTION 2. DEFINITIONS.

(a) “2013 Plan” means the 2013 Equity Incentive Plan of Rockley Photonics Limited, as amended.

(b) “Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such entity.

(c) “Award” means any award of an Option, a SAR, a Restricted Share, a Restricted Stock Unit, a Stock-Based Award or a Cash-Based Award under the Plan.

(d) “Award Agreement” means the agreement between the Company and the recipient of an Award which contains the terms, conditions and restrictions pertaining to such Award.

(e) “Board of Directors” or “Board” means the Board of Directors of the Company, as constituted from time to time.

(f) “Cash-Based Award” means an Award that entitles the Participant to receive a cash-denominated payment.

(g) “Change in Control” means the occurrence of any of the following events:

(i)

A change in the composition of the Board occurs, as a result of which fewer than one-half of the incumbent directors are directors who either:

(A)

Had been directors of the Company on the “look-back date” (as defined below) (the “original directors”); or

(B)

Were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved (the “continuing directors”);

provided, however, that for this purpose, the “original directors” and “continuing directors” shall not include any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board;

(ii)

Any “person” (as defined below) who by the acquisition or aggregation of securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding Shares of Base

Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company;

(iii)

The consummation of a merger or consolidation of the Company or a Subsidiary of the Company with or into another entity or any other corporate reorganization, if persons who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding securities of each of (A) the Company (or its successor) and (B) any direct or indirect parent corporation of the Company (or its successor); or

(iv)

The sale, transfer, or other disposition of all or substantially all of the Company’s assets.

For purposes of subsection (g)(i) above, the term “look-back” date means the later of (1) the Effective Date and (2) the date that is 24 months prior to the date of the event that may constitute a Change in Control.

For purposes of subsection (g)(ii) above, the term “person” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act, but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary and (2) a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the Stock.

Any other provision of this Section 2(g) notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction, and a Change in Control shall not be deemed to occur if the Company files a registration statement with the United States Securities and Exchange Commission in connection with an initial or secondary public offering of securities or debt of the Company to the public.

(h) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

(i) “Committee” means the Compensation Committee as designated by the Board, which is authorized to administer the Plan, as described in Section 3 hereof.

(j) “Company” means Rockley Photonics Holding Limited, a Cayman Islands exempted company limited by shares, or any successor thereto.

(k) “Consultant” means an individual who is a consultant or advisor and who provides bona fide services to the Company, a Parent, a Subsidiary, or an Affiliate as an independent contractor (not including service as a member of the Board) or a member of the board of directors of a Parent or a Subsidiary, in each case who is not an Employee.

(l) “Disability”(i) means any permanent and total disability as defined by Section 22(e)(3) of the Code.

(m) “Employee” means any individual who is a common-law employee of the Company, a Parent, a Subsidiary, or an Affiliate.

(n) “Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(o) “Exercise Price” means, in the case of an Option, the amount for which one Share may be purchased upon exercise of such Option, as specified in the applicable Option Award Agreement. “Exercise Price” means, in the case of a SAR, an amount, as specified in the applicable SAR Award Agreement, which is subtracted from the Fair Market Value of one Share in determining the amount payable upon exercise of such SAR.

(p) “Fair Market Value” with respect to a Share, means the market price of one Share, determined by the Committee as follows:

(i)

If the Stock was traded over-the-counter on the date in question, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted on any such system, by the Pink Quote system;

(ii)

If the Stock was traded on any established stock exchange (such as the New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market) or national market system on the date in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable exchange or system; or

(iii)

If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

For any date that is not a trading day, the Fair Market Value of a share of Stock for such date shall be determined under clauses (i) and (ii) above with reference to the immediately preceding trading day. In all cases, the determination of Fair Market Value by the Committee shall be conclusive and binding on all persons and shall be consistent with the rules of Section 409A and Section 422 of the Code to the extent applicable.

(q) “ISO” means an Option intended to be an “incentive stock option” described in Section 422 of the Code. Each Option granted pursuant to the Plan will be treated as providing by its terms that it is to be an NSO unless, as of the date of grant, it is expressly designated as an ISO in the applicable Award Agreement.

(r) “Nonstatutory Option” or “NSO” means an Option that is not an ISO.

(s) “Option” means an option entitling the holder to acquire Shares upon payment of the exercise price.

(t) “Outside Director” means a member of the Board who is not a common-law employee of the Company, a Parent or a Subsidiary.

(u) “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be a Parent commencing as of such date.

(v) “Participant” means a person who holds an Award.

(w) “Plan” means this 2021 Stock Incentive Plan of Rockley Photonics Limited, as amended from time to time.

(x) “Purchase Price” means the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Committee.

(y) “Restricted Share” means a Share subject to restrictions requiring that it be forfeited, redelivered or offered for sale to the Company if specified performance or other vesting conditions are not satisfied awarded under the Plan.

(z) “Restricted Stock Unit” means a bookkeeping entry representing the Company’s obligation to deliver one Share (or distribute cash) measured by the value of a Share on a future date and may be subject to the satisfaction of performance or other vesting conditions.

(aa) “Returning Shares” means Shares subject to outstanding stock awards granted under the 2013 Plan and that following the Effective Date: (A) are subsequently forfeited or terminated for any reason before being exercised or settled; (B) are not issued because such stock award or any portion thereof is settled in cash; (C) are subject to vesting restrictions and are subsequently forfeited; (D) are withheld or reacquired to satisfy the exercise, strike or purchase price; or (E) are withheld or reacquired to satisfy a tax withholding obligation.

(bb) “SAR” means a right entitling the holder upon exercise to receive an amount (payable in cash or in Shares of equivalent value) equal to the excess of the Fair Market Value of the Shares subject to the right over the Exercise Price from which appreciation under the SAR is to be measured.

(cc) “Section 409A” means Section 409A of the Code.

(dd) “Securities Act” means the United States Securities Act of 1933, as amended, the rules and regulations promulgated thereunder.

(ee) “Service” means service as an Employee, Consultant or Outside Director, subject to such further limitations as may be set forth in the Plan or the applicable Award Agreement. Service does not terminate when an Employee goes on a bona fide leave of absence, that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, for purposes of determining whether an Option is entitled to ISO status, an Employee’s employment will be treated as terminating three months after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. The Company determines which leaves of absence count toward Service, and when Service terminates for all purposes under the Plan.

(ff) “Share” means one Share of Stock, as adjusted in accordance with Section 12 (if applicable).

(gg) “Stock” means the Common Shares of the Company.

(hh) “Stock-Based Award”(ii) means an Award other than an Option, a SAR, a Restricted Share, a Restricted Stock Unit that is convertible into or otherwise based on Stock.

(jj) “Subsidiary” means any corporation, if the Company owns and/or one or more other Subsidiaries own not less than 50% of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. The determination of whether an entity is a “Subsidiary” shall be made in accordance with Section 424(f) of the code.

SECTION 3. ADMINISTRATION.

(a) Committee Composition. The Plan shall be administered by a Committee appointed by the Board, or by the Board acting as the Committee. The Committee shall consist of two or more directors of the Company. In addition, to the extent required by the Board, the composition of the Committee shall satisfy such requirements of the New York Stock Exchange or the Nasdaq Stock Market, as applicable, and as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act.

(b) Committee Appointment. The Board may also appoint one or more separate committees of the Board, each composed of one or more directors of the Company who need not satisfy the requirements of Section 3(a), who may administer the Plan, grant Awards under the Plan and determine all terms of such grants, in each case with respect to all Employees, Consultants and Outside Directors (except such as may be on such committee),

provided that such committee or committees may perform these functions only with respect to Employees who are not considered officers or directors of the Company under Section 16 of the Exchange Act. Within the limitations of the preceding sentence, any reference in the Plan to the Committee shall include such committee or committees appointed pursuant to the preceding sentence. To the extent permitted by applicable laws, the Board or Committee may also authorize one or more officers of the Company to designate Employees, other than officers under Section 16 of the Exchange Act, to receive Awards and/or to determine the number of such Awards to be received by such persons; provided, however, that the Board or Committee shall specify the total number of Awards that such officers may so award.

(c) Committee Responsibilities. Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take the following actions:

(i)

To interpret the Plan and to apply its provisions;

(ii)

To adopt, amend, or rescind rules, procedures, and forms relating to the Plan;

(iii)

To adopt, amend, or terminate sub-plans established for the purpose of satisfying applicable foreign laws including qualifying for preferred tax treatment under applicable foreign tax laws;

(iv)

To authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

(v)

To determine when Awards are to be granted under the Plan;

(vi)

To select the Participants to whom Awards are to be granted;

(vii)

To determine the type of Award and number of Shares or amount of cash to be made subject to each Award;

(viii)

To prescribe the terms and conditions of each Award, including (without limitation) the Exercise Price and Purchase Price, and the vesting or duration of the Award (including accelerating the vesting of Awards, either at the time of the Award or thereafter, without the consent of the Participant), to determine whether an Option is to be classified as an ISO or as an NSO, and to specify the provisions of the agreement relating to such Award;

(ix)

To amend any outstanding Award Agreement, subject to applicable legal restrictions and to the consent of the Participant if the Participant’s rights or obligations would be materially impaired;

(x)

To prescribe the consideration for the grant of each Award or other right under the Plan and to determine the sufficiency of such consideration;

(xi)

To determine the disposition of each Award or other right under the Plan in the event of a Participant’s divorce or dissolution of marriage;

(xii)

To determine whether Awards under the Plan will be granted in replacement of other grants under an incentive or other compensation plan of an acquired business;

(xiii)

To correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award Agreement;

(xiv)

To establish or verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting, and/or ability to retain any Award; and

(xv)

To take any other actions deemed necessary or advisable for the administration of the Plan.

Subject to the requirements of applicable law, the Committee may designate persons other than members of the Committee to carry out its responsibilities and may prescribe such conditions and limitations as it may deem appropriate, except that the Committee may not delegate its authority with regard to the selection for participation of or the granting of Awards under the Plan to persons subject to Section 16 of the Exchange Act. All decisions, interpretations and other actions of the Committee shall be final and binding on all Participants and

all persons deriving their rights from a Participant. No member of the Committee shall be liable for any action that the member has taken or has failed to take in good faith with respect to the Plan or any Award under the Plan.

SECTION 4. ELIGIBILITY.

(a) General Rule. The Committee will select Participants from among Employees, Consultants and Outside Directors. Eligibility for ISOs is limited to individuals described in the first sentence of this Section 4(a) who are employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code. Eligibility for Stock Options, other than ISOs, and SARs is limited to individuals described in the first sentence of this Section 4(a) who are providing direct services on the date of grant of the Award to the Company or to a subsidiary of the Company that would be described in the first sentence of Section 1.409A-1(b)(5)(iii)(E) of the Treasury Regulations.

(b) Ten-Percent Shareholders. An Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, a Parent or Subsidiary shall not be eligible for the grant of an ISO unless such grant satisfies the requirements of Section 422(c)(5) of the Code.

(c) Attribution Rules. For purposes of Section 4(b) above, in determining stock ownership, an Employee shall be deemed to own the stock owned, directly or indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors, and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust shall be deemed to be owned proportionately by or for its shareholders, partners, or beneficiaries.

(d) Outstanding Stock. For purposes of Section 4(b) above, “outstanding stock” shall include all stock actually issued and outstanding immediately after the grant. “Outstanding stock” shall not include Shares authorized for issuance under outstanding options held by the Employee or by any other person.

SECTION 5. STOCK SUBJECT TO PLAN; DIRECTOR COMPENSATION LIMIT.

(a) Basic Limitation. Shares offered under the Plan shall be authorized but unissued Shares, treasury Shares, or previously issued Shares acquired by the Company. No fractional Shares will be delivered under the Plan. The maximum aggregate number of Shares authorized for issuance as Awards under the Plan shall not exceed the sum of (i) 7,631,196 Shares, plus (ii) the number of reserved Shares on an as converted basis¹ which, but for their cancellation immediately prior to the Effective Date, were at such time reserved under the 2013 Plan but not issued or subject to outstanding grants remaining available for issuance under the 2013 Plan plus (iii) the sum of any Returning Shares which become available from time to time, plus (iv) an annual increase on the first day of each fiscal year for a period of not more than ten (10) years beginning on January 1, 2022, and ending on (and including) January 1, 2031, in an amount equal to (x) four percent (4%) of the outstanding Shares on the last day of the immediately preceding fiscal year or (y) such lesser amount (including zero) that the Committee or Board determines for purposes of the annual increase for that fiscal year. Notwithstanding the foregoing, the number of Shares that may be delivered in the aggregate pursuant to the exercise of ISOs granted under the Plan shall not exceed five (5) times the number of Shares provided under clause (i) above plus, to the extent allowable under Section 422 of the Code, any Shares that become available for issuance under the Plan pursuant to Section 5(b), but nothing in this Section 5 will be construed as requiring that any, or any fixed number of, ISOs be awarded under the Plan. The limitations of this Section 5(a) shall be subject to adjustment pursuant to Section 12. The number of Shares that are subject to Awards outstanding at any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan.

(b) Additional Shares. If Restricted Shares or Shares issued upon the exercise of options are forfeited, then such Shares shall again become available for Awards under the Plan. If Restricted Stock Units, Options, or SARs

Such conversion shall be accomplished by multiplying such number of shares reserved for issuance under the 2013 Plan by the Exchange Ratio, as such term is defined under the Business Combination Agreement and Plan of Merger executed by and among SC Health Corporation, Rockley Photonics Limited and the Company on March 19, 2021.

are forfeited or terminate for any reason before being exercised or settled, or an Award is settled in cash without the delivery of Shares to the holder, then the corresponding Shares shall again become available for Awards under the Plan. If Restricted Stock Units or SARs are settled, then only the number of Shares (if any) actually issued in settlement of such Restricted Stock Units or SARs shall reduce the number available in Section 5(a) and the balance (including any Shares withheld to satisfy tax withholding obligations) shall again become available for Awards under the Plan. Any Shares withheld to satisfy the Exercise Price or tax withholding obligation pursuant to any Award of Options or SARs shall be added back to the Shares available for Awards under the Plan. Notwithstanding the foregoing provisions of this Section 5(b), Shares that have actually been issued shall not again become available for Awards under the Plan, except for Shares that are forfeited and do not become vested.

(c) Substitution and Assumption of Awards. The Committee may make Awards under the Plan by assumption, substitution, or replacement of stock options, stock appreciation rights, restricted stock units, or similar awards granted by another entity (including a Parent or Subsidiary), if such assumption, substitution, or replacement is in connection with an asset acquisition, stock acquisition, merger, consolidation, or similar transaction involving the Company (and/or its Parent or Subsidiary) and such other entity (and/or its affiliate). The terms of such assumed, substituted, or replaced Awards shall be as the Committee, in its discretion, determines is appropriate, notwithstanding limitations on Awards in the Plan. Any such substitute or assumed Awards shall not count against the Share limitation set forth in Section 5(a) (nor shall Shares subject to such Awards be added to the Shares available for Awards under the Plan as provided in Section 5(b) above), except that Shares acquired by exercise of substitute ISOs will count against the maximum number of Shares that may be issued pursuant to the exercise of ISOs under the Plan.

(d) Outside Director Compensation Limit. The maximum number of Shares subject to Awards granted under the Plan during any one calendar year to any Outside Director taken together with any cash fees paid by the Company to such Outside Director during such calendar year for service on the Board (other than the calendar year in which an Outside Director commences service on the Board), will not exceed seven hundred fifty thousand dollars ($750,000) in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes). Initial Awards granted under the Plan to Outside Directors who are members of the Board on the Effective Date or who first join the Board in the calendar year of the Effective Date shall not be taken into account for purposes of this limitation.

SECTION 6. RESTRICTED SHARES.

(a) Restricted Share Award Agreement. Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Share Award Agreement between the Participant and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Share Award Agreements entered into under the Plan need not be identical.

(b) Payment for Awards. Restricted Shares may be sold or awarded under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past services, and future services.

(c) Vesting. Each Award of Restricted Shares may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Share Award Agreement. A Restricted Share Award Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability or retirement or other events.

(d) Voting and Dividend Rights. A holder of Restricted Shares awarded under the Plan shall have the same voting, dividend, and other rights as the Company’s other shareholders, except that in the case of any unvested Restricted Shares, the holder shall not be entitled to any dividends or other distributions paid or distributed by the

Company in respect of outstanding Shares. Notwithstanding the foregoing, at the Committee’s discretion, the holder of unvested Restricted Shares may be credited with such dividends and other distributions, provided that such dividends and other distributions shall be paid or distributed to the holder only if, when and to the extent such unvested Restricted Shares vest. The value of dividends and other distributions payable or distributable with respect to any unvested Restricted Shares that do not vest shall be forfeited. At the Committee’s discretion, the Restricted Share Award Agreement may require that the holder of Restricted Shares invest any cash dividends received in additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions as the Award with respect which the dividend was paid. For the avoidance of doubt, other than with respect to the right to receive dividends and other distributions, the holders of unvested Restricted Shares shall have the same voting rights and other rights as the Company’s other shareholders in respect of such unvested Restricted Shares.

(e) Restrictions on Transfer of Shares. Restricted Shares shall be subject to such rights of repurchase, rights of first refusal, or other restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Restricted Share Award Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.

SECTION 7. TERMS AND CONDITIONS OF OPTIONS.

(a) Option Award Agreement. Each grant of an Option under the Plan shall be evidenced by an Option Award Agreement between the Participant and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in an Option Award Agreement. The Option Award Agreement shall specify whether the Option is an ISO or an NSO. The provisions of the various Option Award Agreements entered into under the Plan need not be identical.

(b) Number of Shares. Each Option Award Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 12.

(c) Exercise Price. Each Option Award Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than 100% of the Fair Market Value of a Share on the date of grant (110% for ISOs granted to Employees described in Section 4(b)), and the Exercise Price of an NSO shall not be less than 100% of the Fair Market Value of a Share on the date of grant. Subject to the foregoing in this Section 7(c), the Exercise Price under any Option shall be determined by the Committee in its sole discretion. The Exercise Price shall be payable in one of the forms described in Section 8.

(d) Withholding Taxes. As a condition to the exercise of an Option, the Participant shall make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Participant shall also make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option.

(e) Exercisability and Term. Each Option Award Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Option Award Agreement shall also specify the term of the Option; provided that the term of an ISO shall in no event exceed 10 years from the date of grant (five years for ISOs granted to Employees described in Section 4(b)). An Option Award Agreement may provide for accelerated exercisability in the event of the Participant’s death, Disability, or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Participant’s Service. Options may be awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited. Subject to the foregoing in this Section 7(e), the Committee in its sole discretion shall determine when all or any installment of an Option is to become exercisable and when an Option is to expire.

(f) Exercise of Options. Each Option Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s Service with the Company and its Subsidiaries, and the right to exercise the Option of any executors or administrators of the Participant’s estate or any person who has acquired such Option(s) directly from the Participant by bequest or inheritance. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.

(g) No Rights as a Shareholder. A Participant shall have no rights as a shareholder with respect to any Shares covered by an Option until the date of the issuance of a share certificate for such Shares. No adjustments shall be made, except as provided in Section 12.

(h) Modification, Extension and Renewal of Options. Within the limitations of the Plan, the Committee may modify, extend, or renew outstanding options or may accept the cancellation of outstanding options (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price, or in return for the grant of a different Award for the same or a different number of Shares or for cash. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Participant, materially impair the Participant’s rights or obligations under such Option; provided, however, that an amendment or modification that may cause an ISO to become a NSO, and any amendment or modification that is required to comply with the rules applicable to ISOs, shall not be treated as materially impairing the rights or obligations of the Participant.

(i) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal, and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Option Award Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.

(j) Buyout Provisions. The Committee may at any time (i) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (ii) authorize a Participant to elect to cash out an Option previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish.

SECTION 8. PAYMENT FOR SHARES.

(a) General Rule. The entire Exercise Price or Purchase Price of Shares issued under the Plan shall be payable in lawful money of the United States of America at the time when such Shares are purchased, except as provided in Section 8(b) through Section 8(h) below.

(b) Surrender of Stock. To the extent that an Option Award Agreement so provides, payment may be made all or in part by surrendering, or attesting to the ownership of, Shares which have already been owned by the Participant or the Participant’s representative. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan. The Participant shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes.

(c) Services Rendered. At the discretion of the Committee, Shares may be awarded under the Plan in consideration of services rendered to the Company or a Subsidiary. If Shares are awarded without the payment of a Purchase Price in cash, the Committee shall make a determination (at the time of the Award) of the value of the services rendered by the Participant and the sufficiency of the consideration to meet the requirements of Section 6(b).

(d) Cashless Exercise. To the extent that an Option Award Agreement so provides, if the Stock is traded on an established securities market, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.

(e) Exercise/Pledge. To the extent that an Option Award Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker or lender to pledge Shares, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of the aggregate Exercise Price.

(f) Net Exercise. To the extent that an Option Award Agreement so provides, by a “net exercise” arrangement pursuant to which the number of Shares issuable upon exercise of the Option shall be reduced by the largest whole number of Shares having an aggregate Fair Market Value that does not exceed the aggregate Exercise Price (plus tax withholdings, if applicable) and any remaining balance of the aggregate Exercise Price (and/or applicable tax withholdings) not satisfied by such reduction in the number of whole Shares to be issued shall be paid by the Participant in cash or any other form of payment permitted under the Option Award Agreement.

(g) Promissory Note. To the extent that an Option Award Agreement or Restricted Share Award Agreement so provides, payment may be made all or in part by delivering (on a form prescribed by the Company) a full-recourse promissory note.

(h) Other Forms of Payment. To the extent that an Option Award Agreement or Restricted Share Award Agreement so provides, payment may be made in any other form that is consistent with applicable laws, regulations, and rules.

(i) Limitations under Applicable Law. Notwithstanding anything herein or in an Option Award Agreement or Restricted Share Award Agreement to the contrary, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion.

SECTION 9. STOCK APPRECIATION RIGHTS.

(a) SAR Award Agreement. Each grant of a SAR under the Plan shall be evidenced by a SAR Award Agreement between the Participant and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Award Agreements entered into under the Plan need not be identical.

(b) Number of Shares. Each SAR Award Agreement shall specify the number of Shares to which the SAR pertains and shall provide for the adjustment of such number in accordance with Section 12.

(c) Exercise Price. Each SAR Award Agreement shall specify the Exercise Price. The Exercise Price of a SAR shall not be less than 100% of the Fair Market Value of a Share on the date of grant. Subject to the foregoing in this Section 9(c), the Exercise Price under any SAR shall be determined by the Committee in its sole discretion.

(d) Exercisability and Term. Each SAR Award Agreement shall specify the date when all or any installment of the SAR is to become exercisable. The SAR Award Agreement shall also specify the term of the SAR. A SAR Award Agreement may provide for accelerated exercisability in the event of the Participant’s death, Disability, retirement, or other events and may provide for expiration prior to the end of its term in the event of the termination of the Participant’s Service. SARs may be awarded in combination with Options, and such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. A SAR may be included in an ISO only at the time of grant but may be included in an NSO at the time of grant or thereafter. A SAR granted under the Plan may provide that it will be exercisable only in the event of a Change in Control.

(e) Exercise of SARs. Upon exercise of a SAR, the Participant (or any person having the right to exercise the SAR after the Participant’s death) shall receive from the Company (i) Shares, (ii) cash or (iii) a combination of Shares and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Value of Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs exceeds the Exercise Price.

(f) Modification, Extension or Assumption of SARs. Within the limitations of the Plan, the Committee may modify, extend, or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a different number of Shares and at the same or a different Exercise Price, or in return for the grant of a different Award for the same or a different number of Shares or cash. The foregoing notwithstanding, no modification of a SAR shall, without the consent of the holder, materially impair the holder’s rights or obligations under such SAR.

(g) Buyout Provisions. The Committee may at any time (i) offer to buy out for a payment in cash or cash equivalents a SAR previously granted, or (ii) authorize a Participant to elect to cash out a SAR previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish.

SECTION 10. RESTRICTED STOCK UNITS.

(a) Restricted Stock Unit Award Agreement. Each grant of Restricted Stock Units under the Plan shall be evidenced by a Restricted Stock Unit Award Agreement between the Participant and the Company. Such Restricted Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Stock Unit Award Agreements entered into under the Plan need not be identical.

(b) Payment for Awards. To the extent that an Award is granted in the form of Restricted Stock Units, no cash consideration shall be required of the Award recipients.

(c) Vesting Conditions. Each Award of Restricted Stock Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Unit Award Agreement. A Restricted Stock Unit Award Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability, retirement, or other events.

(d) Voting and Dividend Rights. The holders of Restricted Stock Units shall have no voting rights. Prior to settlement or forfeiture, any Restricted Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right, if awarded, entitles the holder to be credited with an amount equal to all cash dividends paid on one Share while the Restricted Stock Unit is outstanding. Settlement of dividend equivalents may be made in the form of cash, in the form of Shares, or in a combination of both. Dividend equivalents may also be converted into additional Restricted Stock Units at the Committee’s discretion. Dividend equivalents shall not be distributed prior to settlement of the Restricted Stock Unit to which the dividend equivalents pertain. Prior to distribution, any dividend equivalents shall be subject to the same conditions and restrictions (including without limitation, any forfeiture conditions) as the Restricted Stock Units to which they attach. The value of dividend equivalents payable or distributable with respect to any unvested Restricted Stock Units that do not vest shall be forfeited. Any entitlement to dividend equivalents or similar entitlements will be established and administered either consistent with an exemption from, or in compliance with, the applicable requirements of Section 409A.

(e) Form and Time of Settlement of Restricted Stock Units. Settlement of vested Restricted Stock Units may be made in the form of (i) cash, (ii) Shares or (iii) any combination of both, as determined by the Committee. The actual number of Restricted Stock Units eligible for settlement may be larger or smaller than the number included in the original Award, based on predetermined performance factors. Methods of converting Restricted Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Shares over a series of trading days. A Restricted Stock Unit Award Agreement may provide that vested Restricted Stock Units may be settled in a lump sum or in installments. A Restricted Stock Unit Award Agreement may provide that the distribution may occur or commence when all vesting conditions applicable to the Restricted Stock Units have been satisfied or have lapsed, or it may be deferred to any later date, subject to compliance with Section 409A. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Restricted Stock Units is settled, the number of such Restricted Stock Units shall be subject to adjustment pursuant to Section 12.

(f) Death of Participant. Any Restricted Stock Unit Award that becomes payable after the Participant’s death shall be distributed to the Participant’s beneficiary or beneficiaries. Each recipient of a Restricted Stock Unit Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Participant’s death. If no beneficiary was designated or if no designated beneficiary survives the Participant, then any Restricted Stock Units Award that becomes payable after the Participant’s death shall be distributed to the Participant’s estate.

SECTION 11. CASH-BASED AWARDS AND STOCK-BASED AWARDS

The Committee may, in its sole discretion, grant Cash-Based Awards and Stock-Based Awards to any Participant in such number or amount and upon such terms, and subject to such conditions, as the Committee shall determine at the time of grant and specify in an applicable Award Agreement. The Committee shall determine the maximum duration of the Cash-Based Award or Stock-Based Award, the amount of cash which may be payable pursuant to the Cash-Based Award, the conditions upon which the Cash-Based Award or Stock-Based Award shall become vested or payable, and such other provisions as the Committee shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula, or payment ranges as determined by the Committee. Payment, if any, with respect to a Cash-Based Award or Stock-Based Award shall be made in accordance with the terms of the Award and may be made in cash or in Shares, as the Committee determines.

SECTION 12. ADJUSTMENT OF SHARES.

(a) Adjustments.

(i) Recapitalization transactions. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the price of Shares, a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make appropriate and equitable adjustments in:

(A)

The class(es) and number of securities available for future Awards and the limitations set forth under Section 5;

(B)

The class(es) and number of securities covered by each outstanding Award; and

(C)

The Exercise Price under each outstanding Option and SAR.

(ii) Other adjustments. In the event of other transactions, the Committee may make such changes as provided in subsection (a) herein, as it determines are necessary or appropriate to avoid distortion in the operation of the Plan.

(iii) The Committee’s determinations hereunder will be final, binding and conclusive.

(b) Dissolution or Liquidation. To the extent not previously exercised or settled, Options, SARs, and Restricted Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company.

(c) Merger or Reorganization. In the event that the Company is a party to a merger or other reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization. Such agreement may provide, without limitation, for one or more of the following:

(i)

The continuation of the outstanding Awards by the Company, if the Company is a surviving corporation;

(ii)

The assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary;

(iii)

The substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding Awards;

(iv)

Immediate vesting, exercisability, or settlement of outstanding Awards followed by the cancellation of such Awards upon or immediately prior to the effectiveness of such transaction;

(v)

Cancellation of the Award, to the extent not vested or not exercised prior to the effective time of the merger or reorganization, in exchange for such cash or equity consideration (including no consideration) as the Committee, in its sole discretion, may consider appropriate; or

(vi)

Settlement of the intrinsic value of the outstanding Awards (whether or not then vested or exercisable) in cash or cash equivalents or equity (including cash or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such Awards or the underlying Shares) followed by the cancellation of such Awards (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment), provided that any such amount may be delayed to the same extent that payment of consideration to the holders of Stock in connection with the merger or reorganization is delayed as a result of escrows, earnouts, holdbacks or other contingencies;

in each case without the Participant’s consent. Any acceleration of payment of an amount that is subject to Section 409A will be delayed, if necessary, until the earliest time that such payment would be permissible under Section 409A without triggering any additional taxes applicable under Section 409A. Any actions hereunder will comply with, or be exempt from, Section 409A to the extent determined by the Committee to be reasonably practicable.

The Company will have no obligation to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly.

(d) Change in Control. In addition to (and not in limitation of) the actions that may be taken under Section 12(c), in the event of a Change in Control in which the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) does not continue or assume or settle (subject to vesting) outstanding Awards, or substitute similar stock awards for outstanding Awards, then with respect to any such Awards that have not been continued, assumed, settled or substituted, the Committee may determine, at the time of granting an Award or thereafter, that the vesting (and exercisability, if applicable) of any such Awards (or portion thereof) will be accelerated in full (and with respect to any Awards subject to performance-based vesting, that vesting shall be deemed satisfied at the target level, or based on actual performance measured in accordance with the applicable performance goals as of the date of the Change in Control, or the greater thereof) to a date prior to the effective time of the Change in Control (contingent upon the closing or completion of the Change in Control) as the Committee will determine (or, if the Committee does not determine such a date, to the date that is five days prior to the effective time of the Change in Control), and any reacquisition or repurchase rights held by the Company with respect to such vested Awards will lapse (contingent upon the closing or completion of the Change in Control). In addition, the Committee may determine, at the time of granting an Award or thereafter, that such Award shall become exercisable or vested as to all or part of the Shares subject to such Award in the event that a Change in Control occurs with respect to the Company. The Committee will have no obligation to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly. Upon consummation of a Change in Control, all Awards that are not assumed, substituted or continued will terminate without payment therefor, except as otherwise determined by the Committee in accordance with this Section 12.

(e) Reservation of Rights. Except as provided in this Section 12, a Participant shall have no rights by reason of any subdivision or consolidation of Shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of Shares of stock of any class. Any issue by the Company of Shares of stock

of any class, or securities convertible into Shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Award. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell, or transfer all or any part of its business or assets. In the event of any change affecting the Shares or the Exercise Price of Shares subject to an Award, including a merger or other reorganization, for reasons of administrative convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of up to 30 days prior to the occurrence of such event.

SECTION 13. DEFERRAL OF AWARDS.

(a) Committee Powers. Subject to compliance with Section 409A, the Committee (in its sole discretion) may permit or require a Participant to:

(i)

Have cash that otherwise would be paid to such Participant as a result of the exercise of a SAR or the settlement of Restricted Stock Units credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books;

(ii)

Have Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR converted into an equal number of Restricted Stock Units; or

(iii)

Have Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR or the settlement of Restricted Stock Units converted into amounts credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books. Such amounts shall be determined by reference to the Fair Market Value of such Shares as of the date when they otherwise would have been delivered to such Participant.

(b) General Rules. A deferred compensation account established under this Section 13 may be credited with interest or other forms of investment return, as determined by the Committee. A Participant for whom such an account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to the terms and conditions of the applicable agreement between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures, and forms pertaining to such Awards, including (without limitation) the settlement of deferred compensation accounts established under this Section 13.

SECTION 14. AWARDS UNDER SUB-PLANS.

The Committee may at any time and from time to time (including before or after an Award is granted) establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan for Participants based outside of the U.S. and/or subject to the laws of countries other than the U.S., including by establishing one or more sub-plans, supplements or appendices under the Plan or any Award Agreement for the purpose of complying or facilitating compliance with non-U.S. laws or taking advantage of tax favorable treatment or for any other legal or administrative reason determined by the Committee. Any such sub-plan, supplement or appendix may contain, in each case, (i) such limitations on the Committee’s discretion under the Plan and (ii) such additional or different terms and conditions, as the Committee deems necessary or desirable and will be deemed to be part of the Plan but will apply only to Participants within the group to which the sub-plan, supplement or appendix applies (as determined by the Committee); provided, however, that no sub-plan, supplement or appendix, rule or regulation established pursuant to this provision shall increase the number of Shares available under Section 5.

SECTION 15. PAYMENT OF DIRECTOR’S FEES IN SECURITIES.

(a) Effective Date. No provision of this Section 15 shall be effective unless and until the Board has determined to implement such provision.

(b) Elections to Receive NSOs, SARs, Restricted Shares, or Restricted Stock Units. An Outside Director may elect to receive annual retainer payments and/or meeting fees from the Company in the form of cash, NSOs, SARs, Restricted Shares, Restricted Stock Units, or a combination thereof, as determined by the Board. Alternatively, the Board may mandate payment in any of such alternative forms. Such NSOs, SARs, Restricted Shares, and Restricted Stock Units shall be issued under the Plan. An election under this Section 15 shall be filed with the Company on the prescribed form.

(c) Number and Terms of NSOs, SARs, Restricted Shares or Restricted Stock Units. The number of NSOs, SARs, Restricted Shares, or Restricted Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board. The terms of such NSOs, SARs, Restricted Shares, or Restricted Stock Units shall also be determined by the Board.

SECTION 16. LEGAL AND REGULATORY REQUIREMENTS.

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the United States Securities Act, state securities laws and regulations and the regulations of any stock exchange on which the Company’s securities may then be listed, and the Company has obtained the approval or favorable ruling from any governmental agency which the Company determines is necessary or advisable. The Company shall not be liable to a Participant or other persons as to: (a) the non-issuance or sale of Shares as to which the Company has not obtained from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares under the Plan; and (b) any tax consequences expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Award granted under the Plan.

SECTION 17. TAXES.

(a) Withholding Taxes. To the extent required by applicable federal, state, local, or foreign law, a Participant or the Participant’s successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied.

(b) Share Withholding. The Committee may permit a Participant to satisfy all or part of the Participant’s withholding or income tax obligations by having the Company withhold all or a portion of any Shares that otherwise would be issued to the Participant or by surrendering all or a portion of any Shares that the Participant previously acquired. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. In no event may a Participant have Shares withheld that would otherwise be issued to the Participant in excess of the number necessary to satisfy the maximum legally required tax withholding.

(i)

Without limiting the generality of Section 24(b) hereof, each Award will contain such terms as the Committee determines and will be construed and administered such that the Award either qualifies for an exemption from the requirements of Section 409A or satisfies such requirements.

(ii)

Each Award that provides for “nonqualified deferred compensation” within the meaning of Section 409A shall be subject to such additional rules and requirements as specified by the Committee from time to time in order to comply with Section 409A. If any amount under such an Award is payable upon a “separation from service” (within the meaning of Section 409A) to a Participant who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the Participant’s separation from service, or (ii) the Participant’s death, but only to the

extent such delay is necessary to prevent such payment from being subject to interest, penalties, and/or additional tax imposed pursuant to Section 409A. In addition, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A. With regard to any payment considered to be nonqualified deferred compensation under Section 409A, to the extent applicable, that is payable upon a Change in Control of the Company or other similar event, to the extent required to avoid the imposition of an additional tax, interest or penalty under Section 409A, no amount will be payable unless such change in control constitutes a “change in control event” within the meaning of Section 1.409A-3(i)(5) of the Treasury Regulations.

(iii)

Notwithstanding anything to the contrary in the Plan or any Award Agreement, the Committee may unilaterally amend, modify or terminate the Plan or any outstanding Award, including but not limited to changing the form of the Award, if the Committee determines that such amendment, modification or termination is necessary or desirable to avoid the imposition of an additional tax, interest or penalty under Section 409A.

(iv)

For purposes of Section 409A, each payment made under the Plan or any Award will be treated as a separate payment.

SECTION 18. TRANSFERABILITY.

Unless the agreement evidencing an Award (or an amendment thereto authorized by the Committee) expressly provides otherwise, no Award granted under the Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated, or otherwise transferred in any manner (prior to the vesting and lapse of any and all restrictions applicable to Shares issued under such Award), other than by will or the laws of descent and distribution; provided, however, that an ISO may be transferred or assigned only to the extent consistent with Section 422 of the Code. Any purported assignment, transfer, or encumbrance in violation of this Section 17 shall be void and unenforceable against the Company.

SECTION 19. PERFORMANCE BASED AWARDS.

The number of Shares or other benefits granted, issued, retained, and/or vested under an Award may be made subject to the attainment of performance goals. The Committee may utilize any performance criteria selected by it in its sole discretion to establish performance goals.

SECTION 20. RECOUPMENT OF AWARDS.

The Company will recoup incentive-based compensation from executive officers to the extent required under the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules, regulations and listing standards that may be issued under that act. Any right of recoupment under this provision will be in addition to, and not in lieu of, any other rights of recoupment that may be available to the Company. No recovery of compensation under any clawback policy or this Section 20 will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or any of its Subsidiaries or Affiliates.

SECTION 21. NO EMPLOYMENT RIGHTS.

No provision of the Plan, nor any Award granted under the Plan, shall be construed to give any person any right to become, to be treated as, or to remain an Employee or Consultant. The Company and its Subsidiaries reserve the right to terminate any person’s Service at any time and for any reason, with or without notice.

SECTION 22. DURATION AND AMENDMENTS.

(a) Term of the Plan. The Plan, as set forth herein, shall come into existence on the date of its adoption by the Board; provided, however, that no Award may be granted hereunder prior to the Effective Date. The Board or

the Committee may suspend or terminate the Plan at any time. No ISOs may be granted after the tenth (10^th) anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the shareholders of the Company.

(b) Right to Amend the Plan. The Board or the Committee may amend the Plan at any time and from time to time. Rights and obligations under any Award granted before amendment of the Plan shall not be materially impaired by such amendment, except with consent of the Participant. An amendment of the Plan shall be subject to the approval of the Company’s shareholders only to the extent required by applicable laws, regulations or rules.

(c) Effect of Termination. No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan shall not affect Awards previously granted under the Plan.

SECTION 23. AWARDS TO NON-U.S. PARTICIPANTS.

Awards may be granted to Participants who are non-United States nationals or employed or providing services outside the United States, or both, on such terms and conditions different from those applicable to Awards to Participants who are employed or providing services in the United States as may, in the judgment of the Committee, be necessary or desirable to recognize differences in local law, tax policy, or custom. The Committee also may impose conditions on the exercise, vesting, or settlement of Awards in order to minimize the Company’s obligation with respect to tax equalization for Participants on assignments outside their home country.

SECTION 24. MISCELLANEOUS

(a) Waiver of Jury Trial. By accepting or being deemed to have accepted an Award under the Plan, each Participant waives (or will be deemed to have waived), to the maximum extent permitted under applicable law, any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan or any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees (or will be deemed to have agreed) that any such action, proceedings or counterclaim will be tried before a court and not before a jury. By accepting or being deemed to have accepted an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers. Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit any dispute arising under the terms of the Plan or any Award to binding arbitration or as limiting the ability of the Company to require any individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder.

(b) Limitation of Liability. Notwithstanding anything to the contrary in the Plan or any Award, neither the Company, nor any of its Subsidiaries, nor the Committee, nor any person acting on behalf of the Company, any of its Subsidiaries, or the Committee, will be liable to any Participant, to any permitted transferee, to the estate or beneficiary of any Participant or any permitted transferee, or to any other person by reason of any acceleration of income, any additional tax, or any penalty, interest or other liability asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with respect to any Award.

(c) Unfunded Plan. The Company’s obligations under the Plan are unfunded, and no Participant will have any right to specific assets of the Company in respect of any Award. Participants will be general unsecured creditors of the Company with respect to any amounts due or payable under the Plan.

SECTION 25. GOVERNING LAW.

The Plan and each Award Agreement shall be governed by the laws of the state of California, without application of the conflicts of law principles thereof.

SECTION 26. SUCCESSORS AND ASSIGNS.

The terms of the Plan shall be binding upon and inure to the benefit of the Company and any successor entity, including any successor entity contemplated by Section 12(c).

SECTION 27. EXECUTION.

To record the adoption of the Plan by the Board, the Company has caused its authorized officer to execute the same.


ROCKLEY PHOTONICS HOLDINGS LIMITED

By:		/s/ Andrew Rickman
Name:		Andrew Rickman
Title:		Chief Executive Officer

Schedule A

The Equity Scheme

The Equity Scheme will be implemented either by way of a cancellation or a transfer scheme of arrangement under Part 26 of the Act. Company Shareholders will be invited to vote in favor of the Equity Scheme at the Equity Scheme Court Meeting, which is a meeting of Company Shareholders convened by the Company with the permission of the Court.

The Equity’ Scheme will become effective in accordance with its terms:

(a) if it is approved by a majority (in person or by proxy) in number, representing at least 75 per cent. in value, of the members present and voting at the Equity Scheme Court Meeting;

(b) if it is subsequently sanctioned by an order of the Court (the “Equity Scheme Court Order”); and

(c) upon an office copy of the Equity Scheme Court Order being delivered to the UK Registrar of Companies for registration.

If the Equity Scheme becomes effective, then either:

(a) in the case of a cancellation scheme, the Company Ordinary Shares of the Company Shareholders shall be cancelled and Company Ordinary Shares shall be issued to HoldCo, resulting in HoldCo becoming the holding company of the Company. In consideration for the cancellation of the Company Ordinary Shares and issuance of shares to HoldCo, HoldCo shall issue an identical number of HoldCo Ordinary Shares to those cancelled to the Company Shareholders; or

(b) in the case of a transfer scheme, the Company Ordinary Shares of the Company Shareholders shall be transferred to HoldCo. In consideration for the transfer of the Company Ordinary Shares to HoldCo, HoldCo shall issue an identical number of HoldCo Ordinary Shares to the Company Shareholders, resulting in HoldCo becoming the holding company of the Company.

The Creditor Scheme

The Creditor’s Scheme will be implemented by way of a creditor’s scheme of arrangement under Part 26 of the Act. Pursuant to the Creditors Scheme:

(a) if the Equity Scheme is a cancellation scheme, the Company proposes to novate its obligations under the Company Convertible Notes to Holdco and the Scheme Creditors will accept the performance by HoldCo of the Company Convertible Notes in place of performance by the Company and discharge Holdco from further obligations under the Company Convertible Notes. The consideration for the novation shall be an inter-company loan equal to the market value of the Scheme Convertible Notes; and

(b) if the Equity Scheme is a transfer scheme, HoldCo proposes to acquire Scheme Convertible Notes from each Scheme Creditor in consideration of HoldCo entering into new convertible loan note with each Scheme Creditor on substantially the same terms, and the Scheme Convertible Notes will be amended to a form of inter-company loan between HoldCo and the Company.

The Scheme Creditors will be invited to vote in favor of the Creditors’ Scheme at the Creditors’ Scheme Court Meeting, being a meeting convened by the Company with the permission of the Court. The Creditors’ Scheme will become effective in accordance with its terms:

(a) if it is approved by a majority (in person or by proxy) in number, and at least 75 per cent. in value, of the members of the class of creditors present and voting at the Creditors’ Scheme Court Meeting;

(b) if it is subsequently sanctioned by an order of the Court (the “Creditor Scheme Court Order”); and

(c) upon an office copy of the Creditor Scheme Court Order being delivered to the UK Registrar of Companies for registration.

Exhibit 10.7

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

(Adopted by the Board of Directors on March 31, 2021)

(Approved by the Stockholders on August 6, 2021)

Effective Date: August 11, 2021

Table of Contents


		Page
SECTION 1	Purpose Of The Plan		4

SECTION 2	Definitions		4
(a)	“Board”		4
(b)	“Code”		4
(c)	“Committee”		4
(d)	“Company”		4
(e)	“Compensation”		4
(f)	“Corporate Reorganization”		4
(g)	“Eligible Employee”		4
(h)	“Exchange Act”		5
(i)	“Fair Market Value”		5
(j)	“Offering”		5
(k)	“Offering Date”		5
(l)	“Offering Period”		5
(m)	“Participant”		5
(n)	“Participating Company”		5
(o)	“Plan”		5
(p)	“Plan Account”		5
(q)	“Purchase Date”		5
(r)	“Purchase Period”		5
(s)	“Purchase Price”		5
(t)	“Stock”		5
(u)	“Subsidiary”		5

SECTION 3	Administration Of The Plan		6
(a)	Administrative Powers and Responsibilities		6
(b)	International Administration		6

SECTION 4	Enrollment And Participation		6
(a)	Offering Periods		6
(b)	Enrollment		7
(c)	Duration of Participation		7

SECTION 5	Employee Contributions		7
(a)	Frequency of Payroll Deductions		7
(b)	Amount of Payroll Deductions		7
(c)	Changing Withholding Rate		7
(d)	Discontinuing Payroll Deductions		8

SECTION 6	Withdrawal From The Plan		8
(a)	Withdrawal		8
(b)	Re-enrollment After Withdrawal		8

SECTION 7	Change In Employment Status		8
(a)	Termination of Employment		8
(b)	Leave of Absence		8
(c)	Death		8

SECTION 8	Plan Accounts and Purchase Of Shares		8
(a)	Plan Accounts		8
(b)	Purchase Price		8
(c)	Number of Shares Purchased		9
(d)	Available Shares Insufficient		9


		Page
(e)	Issuance of Stock		9
(f)	Unused Cash Balances		9
(g)	Stockholder Approval		9

SECTION 9	Limitations On Stock Ownership		9
(a)	Five Percent Limit		9
(b)	Dollar Limit		10

SECTION 10	Rights Not Transferable		10

SECTION 11	No Rights As An Employee		10

SECTION 12	No Rights As A Stockholder		10

SECTION 13	Securities Law Requirements		10

SECTION 14	Stock Offered Under The Plan		11
(a)	Authorized Shares		11
(b)	Antidilution Adjustments		11
(c)	Reorganizations		11

SECTION 15	Amendment Or Discontinuance		11

SECTION 16	Execution		12

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

SECTION 1 Purpose Of The Plan.

The Plan was adopted by the Board of Directors on March 31, 2021 and is effective on August 11, 2021 (the “Effective Date”). The purpose of the Plan is to provide a broad-based employee benefit to attract the services of new Eligible Employees, to retain the services of existing Eligible Employees, and to provide incentives for such individuals to exert maximum efforts toward the Company’s success by purchasing Stock from the Company on favorable terms and to pay for such purchases through payroll deductions. The Plan is intended to qualify under section 423 of the Code and to be exempt from the application and requirements of Section 409A of the Code, and is to be construed accordingly.

SECTION 2 Definitions.

(a) “Board” means the Board of Directors of the Company, as constituted from time to time.

(b) “Code” means the Internal Revenue Code of 1986, as amended.

(c) “Committee” means the Compensation Committee of the Board or such other committee, comprised exclusively of one or more directors of the Company, as may be appointed by the Board from time to time to administer the Plan.

(d) “Company” means Rockley Photonics Holdings Limited, a Cayman Islands exempted company limited by shares.

(e) “Compensation” means, unless provided otherwise by the Committee in the terms and conditions of an Offering, base salary and wages paid in cash to a Participant by a Participating Company, without reduction for any pre-tax contributions made by the Participant under sections 401(k) or 125 of the Code. “Compensation” shall, unless provided otherwise by the Committee in the terms and conditions of an Offering, exclude variable compensation (including commissions, bonuses, incentive compensation, overtime pay and shift premiums), all non-cash items, moving or relocation allowances, cost-of-living equalization payments, car allowances, tuition reimbursements, imputed income attributable to cars or life insurance, severance pay, fringe benefits, contributions or benefits received under employee benefit plans, income attributable to the exercise of stock options, and similar items. The Committee shall determine whether a particular item is included in Compensation.

(f) “Corporate Reorganization” means:

(i) The consummation of a merger or consolidation of the Company with or into another entity, or any other corporate reorganization; or

(ii) The sale, transfer or other disposition of all or substantially all of the Company’s assets or the complete liquidation or dissolution of the Company.

(g) “Eligible Employee” means any employee of a Participating Company whose customary employment is for more than five months per calendar year and for more than 20 hours per week.

The foregoing notwithstanding, an individual shall not be considered an Eligible Employee if such individual’s participation in the Plan is prohibited by the law of any country which has jurisdiction over the individual.

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(i) “Fair Market Value” means the fair market value of a share of Stock, determined as follows:

(i) If Stock was traded on any established national securities exchange including the New York Stock Exchange or The Nasdaq Stock Market on the date in question, then the Fair Market Value shall be equal to the closing price as quoted on such exchange (or the exchange with the greatest volume of trading in the Stock) on such date as reported in the Wall Street Journal or such other source as the Committee deems reliable; or

(ii) If the foregoing provision is not applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

For any date that is not a Trading Day, the Fair Market Value of a share of Stock for such date shall be determined by using the closing sale price for the immediately preceding Trading Day. Determination of the Fair Market Value pursuant to the foregoing provisions shall be conclusive and binding on all persons.

(j) “Offering” means the grant of options to purchase shares of Stock under the Plan to Eligible Employees.

(k) “Offering Date” means the first day of an Offering.

(l) “Offering Period” means a period with respect to which the right to purchase Stock may be granted under the Plan, as determined pursuant to Section 4(a).

(m) “Participant” means an Eligible Employee who elects to participate in the Plan, as provided in Section 4(b).

(n) “Participating Company” means (i) the Company and (ii) each present or future Subsidiary designated by the Committee as a Participating Company.

(o) “Plan” means this Rockley Photonics Limited 2021 Employee Stock Purchase Plan, as it may be amended from time to time.

(p) “Plan Account” means the account established for each Participant pursuant to Section 8(a).

(q) “Purchase Date” means one or more dates during an Offering on which shares of Stock may be purchased pursuant to the terms of the Offering.

(r) “Purchase Period” means one or more successive periods during an Offering, beginning on the Offering Date or on the day after a Purchase Date, and ending on the next succeeding Purchase Date.

(s) “Purchase Price” means the price at which Participants may purchase shares of Stock under the Plan, as determined pursuant to Section 8(b).

(t) “Stock” means the Common Stock of the Company.

(u) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

(r) “Trading Day” means a day on which the national stock exchange on which the Stock is traded is open for trading.

SECTION 3 Administration Of The Plan.

(a) Administrative Powers and Responsibilities. The Plan shall be administered by the Committee. The Committee shall have full power and authority, subject to the provisions of the Plan, to promulgate such rules and regulations as it deems necessary for the proper administration of the Plan, to interpret the provisions and supervise the administration of the Plan, and to take all action in connection therewith or in relation thereto as it deems necessary or advisable. Any decision reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made at a meeting duly held. The Committee’s determinations under the Plan, unless otherwise determined by the Board, shall be final and binding on all persons. The Company shall pay all expenses incurred in the administration of the Plan. No member of the Committee shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan, and all members of the Committee shall be fully indemnified by the Company with respect to any such action, determination or interpretation. The Committee may adopt such rules, guidelines and forms as it deems appropriate to implement the Plan. Subject to the requirements of applicable law, the Committee may designate persons other than members of the Committee to carry out its responsibilities and may prescribe such conditions and limitations as it may deem appropriate. All decisions, interpretations and other actions of the Committee shall be final and binding on all Participants and all persons deriving their rights from a Participant. No member of the Committee shall be liable for any action that he has taken or has failed to take in good faith with respect to the Plan. Notwithstanding anything to the contrary in the Plan, the Board may, in its sole discretion, at any time and from time to time, resolve to administer the Plan. In such event, the Board shall have all of the authority and responsibility granted to the Committee herein.

(b) International Administration. The Committee may establish sub-plans (which need not qualify under section 423 of the Code) and initiate separate Offerings through such sub-plans for the purpose of (i) facilitating participation in the Plan by non-U.S. employees in compliance with foreign laws and regulations without affecting the qualification of the remainder of the Plan under section 423 of the Code or (ii) qualifying the Plan for preferred tax treatment under foreign tax laws (which sub-plans, at the Committee’s discretion, may provide for allocations of the authorized shares reserved for issue under the Plan as set forth in Section 14(a)). The rules, guidelines and forms of such sub-plans (or the Offerings thereunder) may take precedence over other provisions of the Plan, with the exception of Section 4(a)(i), Section 5(b), Section 8(b) and Section 14(a), but unless otherwise superseded by the terms of such sub-plan, the provisions of the Plan shall govern the operation of such sub-plan. Alternatively and in order to comply with the laws of a foreign jurisdiction, the Committee shall have the power, in its discretion, to grant options in an Offering to citizens or residents of a non-U.S. jurisdiction (without regard to whether they are also citizens of the United States or resident aliens) that provide terms which are less favorable than the terms of options granted under the same Offering to employees resident in the United States, subject to compliance with section 423 of the Code.

SECTION 4 Enrollment And Participation.

(a) Offering Periods. While the Plan is in effect, the Committee may from time to time grant options to purchase shares of Stock pursuant to the Plan to Eligible Employees during a specified Offering Period. Each such Offering shall be in such form and shall contain such terms and conditions as the Committee shall determine, subject to compliance with the terms and conditions of the Plan (which may be incorporated by reference) and the requirements of section 423 of the Code, including the requirement that all Eligible Employees have the same rights and privileges. The Committee shall specify prior to the commencement of each Offering (i) the period during which the Offering shall be effective, which may not exceed 27 months from the Offering

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

Date and may include one or more successive Purchase Periods within the Offering, (ii) the Purchase Dates and Purchase Price for shares of Stock which may be purchased pursuant to the Offering, and (iii) if applicable, any limits on the number of shares purchasable by a Participant, or by all Participants in the aggregate, during any Offering Period or, if applicable, Purchase Period, in each case consistent with the limitations of the Plan. The Committee shall have the discretion to provide for the automatic termination of an Offering following any Purchase Date on which the Fair Market Value of a share of Stock is equal to or less than the Fair Market Value of a share of Stock on the Offering Date, and for the Participants in the terminated Offering to be automatically re-enrolled in a new Offering that commences immediately after such Purchase Date. The terms and conditions of each Offering need not be identical, and shall be deemed incorporated by reference and made a part of the Plan.

(b) Enrollment. Any individual who, on the day preceding the first day of an Offering Period, qualifies as an Eligible Employee may elect to become a Participant in the Plan for such Offering Period by completing the enrollment process prescribed and communicated for this purposes from time to time by the Company to Eligible Employees.

(c) Duration of Participation. Once enrolled in the Plan, a Participant shall continue to participate in the Plan until the Participant ceases to be an Eligible Employee or withdraws from the Plan under Section 6(a). A Participant who withdrew from the Plan under Section 6(a) may again become a Participant, if the Participant then is an Eligible Employee, by following the procedure described in Subsection (b) above. A Participant whose employee contributions were discontinued automatically under Section 9(b) shall automatically resume participation at the beginning of the earliest Offering Period ending in the next calendar year, if the Participant then is an Eligible Employee. When a Participant reaches the end of an Offering Period but the Participant’s participation is to continue, then such Participant shall automatically be re-enrolled for the Offering Period that commences immediately after the end of the prior Offering Period.

SECTION 5 Employee Contributions.

(a) Frequency of Payroll Deductions. A Participant may purchase shares of Stock under the Plan solely by means of payroll deductions; provided, however, that to the extent provided in the terms and conditions of an Offering, a Participant may also make contributions through payment by cash or check prior to one or more Purchase Dates during the Offering. Payroll deductions, subject to the provisions of Subsection (b) below or as otherwise provided under the terms and conditions of an Offering, shall occur on each payday during participation in the Plan.

(b) Amount of Payroll Deductions. An Eligible Employee shall designate during the enrollment process the portion of Compensation that such Eligible Employee elects to have withheld for the purchase of Stock. Such portion shall be a whole percentage of the Eligible Employee’s Compensation, but not less than 1% nor more than 15% (or such lower rate of Compensation specified as the limit in the terms and conditions of the applicable Offering).

(c) Changing Withholding Rate. Unless otherwise provided under the terms and conditions of an Offering, a Participant may not increase the rate of payroll withholding during the Offering Period, but may discontinue or decrease the rate of payroll withholding during the Offering Period to a whole percentage of the Participant’s Compensation in accordance with such procedures and subject to such limitations as the Company may establish for all Participants. A Participant may also increase or decrease the rate of payroll withholding effective for a new Offering Period by submitting an authorization to change the payroll deduction rate pursuant to the process prescribed by the Company from time to time. The new withholding rate shall be a whole percentage of the Eligible Employee’s Compensation consistent with Subsection (b) above.

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

(d) Discontinuing Payroll Deductions. If a Participant wishes to discontinue employee contributions entirely, the Participant may do so by withdrawing from the Plan pursuant to Section 6(a). In addition, employee contributions may be discontinued automatically pursuant to Section 9(b).

SECTION 6 Withdrawal From The Plan.

(a) Withdrawal. A Participant may elect to withdraw from the Plan by giving notice pursuant to the process prescribed and communicated by the Company from time to time. Such withdrawal may be elected at any time before the last day of an Offering Period, except as otherwise provided in the Offering. In addition, if payment by cash or check is permitted under the terms and conditions of an Offering, Participants may be deemed to withdraw from the Plan by declining or failing to remit timely payment to the Company for the shares of Stock. As soon as reasonably practicable thereafter, payroll deductions shall cease and the entire amount credited to the Participant’s Plan Account shall be refunded to the Participant in cash, without interest. No partial withdrawals shall be permitted.

(b) Re-enrollment After Withdrawal. A former Participant who has withdrawn from the Plan shall not be a Participant until the Participant re-enrolls in the Plan under Section 4(b). Re-enrollment may be effective only at the commencement of an Offering Period.

SECTION 7 Change In Employment Status.

(a) Termination of Employment. Termination of employment as an Eligible Employee for any reason, including death, shall be treated as an automatic withdrawal from the Plan under Section 6(a). A transfer from one Participating Company to another shall not be treated as a termination of employment.

(b) Leave of Absence. For purposes of the Plan, employment shall not be deemed to terminate when the Participant goes on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing. Employment, however, shall be deemed to terminate three months after the Participant goes on a leave, unless a contract or statute guarantees the Participant’s right to return to work. Employment shall be deemed to terminate in any event when the approved leave ends, unless the Participant immediately returns to work.

(c) Death. In the event of the Participant’s death, the amount credited to the Participant’s Plan Account shall be paid to the Participant’s estate.

SECTION 8 Plan Accounts and Purchase Of Shares.

(a) Plan Accounts. The Company shall maintain a Plan Account on its books in the name of each Participant. Whenever an amount is deducted from the Participant’s Compensation under the Plan, such amount shall be credited to the Participant’s Plan Account. Amounts credited to Plan Accounts shall not be trust funds and may be commingled with the Company’s general assets and applied to general corporate purposes. No interest shall be credited to Plan Accounts.

(b) Purchase Price. The Purchase Price for each share of Stock purchased during an Offering Period shall be the lesser of:

(i) 85% of the Fair Market Value of such share on the Purchase Date; or

(ii) 85% of the Fair Market Value of such share on the Offering Date.

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

The Committee may specify an alternate Purchase Price amount or formula in the terms and conditions of an Offering, but in no event may such amount or formula result in a Purchase Price less than that calculated pursuant to the immediately preceding formula.

(c) Number of Shares Purchased. As of each Purchase Date, each Participant shall be deemed to have elected to purchase the number of shares of Stock calculated in accordance with this Subsection (c), unless the Participant has previously elected to withdraw from the Plan in accordance with Section 6(a). The amount then in the Participant’s Plan Account shall be divided by the Purchase Price, and the number of shares that results shall be purchased from the Company with the funds in the Participant’s Plan Account. Unless provided otherwise by the Committee prior to commencement of an Offering, the maximum number of shares of Stock which may be purchased by an individual Participant during such Offering is 5,000 shares. The foregoing notwithstanding, no Participant shall purchase more than such number of shares of Stock as may be determined by the Committee with respect to the Offering Period, or Purchase Period, if applicable, nor more than the amounts of Stock set forth in Sections 9(b) and 14(a). For each Offering Period and, if applicable, Purchase Period, the Committee shall have the authority to establish additional limits on the number of shares purchasable by all Participants in the aggregate.

(d) Available Shares Insufficient. In the event that the aggregate number of shares that all Participants elect to purchase during an Offering Period exceeds the maximum number of shares remaining available for issuance under Section 14(a), or which may be purchased pursuant to any additional aggregate limits imposed by the Committee, then the number of shares to which each Participant is entitled shall be determined by multiplying the number of shares available for issuance by a fraction, the numerator of which is the number of shares that such Participant has elected to purchase and the denominator of which is the number of shares that all Participants have elected to purchase.

(e) Issuance of Stock. Certificates representing the shares of Stock purchased by a Participant under the Plan shall be issued to the Participant as soon as reasonably practicable after the applicable Purchase Date, except that the Company may determine that such shares shall be held for each Participant’s benefit by a broker designated by the Company. Shares may be registered in the name of the Participant or jointly in the name of the Participant and the Participant’s spouse as joint tenants with right of survivorship or as community property.

(f) Unused Cash Balances. An amount remaining in the Participant’s Plan Account that represents the Purchase Price for any fractional share may be carried over in the Participant’s Plan Account to the next Purchase Period or Offering Period or refunded to the Participant in cash at the end of the Purchase Period or Offering Period, without interest, if the Participant’s participation is not continued. Any amount remaining in the Participant’s Plan Account that represents the Purchase Price for whole shares that could not be purchased by reason of Subsection (c) or (d) above, Section 9(b) or Section 14(a) shall be refunded to the Participant in cash, without interest.

(g) Stockholder Approval. The Plan shall be submitted to the stockholders of the Company for their approval within twelve (12) months after the date the Plan is adopted by the Board. Any other provision of the Plan notwithstanding, no shares of Stock shall be purchased under the Plan unless and until the Company’s stockholders have approved the adoption of the Plan.

SECTION 9 Limitations On Stock Ownership.

(a) Five Percent Limit. Any other provision of the Plan notwithstanding, no Participant shall be granted a right to purchase Stock under the Plan if such Participant, immediately after the Participant’s election to purchase such Stock, would own stock possessing 5% or more of the total combined voting power or value of all classes of

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

stock of the Company or any parent or Subsidiary of the Company. For purposes of this Subsection (a), the following rules shall apply:

(i) Ownership of stock shall be determined after applying the attribution rules of section 424(d) of the Code;

(ii) Each Participant shall be deemed to own any stock that the Participant has a right or option to purchase under this or any other plan; and

(iii) Each Participant shall be deemed to have the right to purchase up to the maximum number of shares of Stock that may be purchased by a Participant under this Plan under the individual limit specified pursuant to Section 8(c) with respect to each Offering Period.

(b) Dollar Limit. Any other provision of the Plan notwithstanding, no Participant shall accrue the right to purchase Stock at a rate which exceeds $25,000 of Fair Market Value of such Stock per calendar year (under this Plan and all other employee stock purchase plans of the Company or any parent or Subsidiary of the Company), determined in accordance with the provisions of section 423(b)(8) of the Code and applicable Treasury Regulations promulgated thereunder.

For purposes of this Subsection (b), the Fair Market Value of Stock shall be determined as of the beginning of the Offering Period in which such Stock is purchased. Employee stock purchase plans not described in section 423 of the Code shall be disregarded. If a Participant is precluded by this Subsection (b) from purchasing additional Stock under the Plan, then the Participant’s employee contributions may automatically be discontinued.

SECTION 10 Rights Not Transferable.

The rights of any Participant under the Plan, or any Participant’s interest in any Stock or moneys to which the Participant may be entitled under the Plan, shall not be transferable by voluntary or involuntary assignment or by operation of law, or in any other manner other than by the laws of descent and distribution. If a Participant in any manner attempts to transfer, assign or otherwise encumber the Participant’s rights or interest under the Plan, other than by the laws of descent and distribution, then such act shall be treated as an election by the Participant to withdraw from the Plan under Section 6(a).

SECTION 11 No Rights As An Employee.

Nothing in the Plan or in any right granted under the Plan shall confer upon the Participant any right to continue in the employ of a Participating Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Participating Companies or of the Participant, which rights are hereby expressly reserved by each, to terminate the Participant’s at-will employment at any time and for any reason, with or without cause.

SECTION 12 No Rights As A Stockholder.

A Participant shall have no rights as a stockholder with respect to any shares of Stock that the Participant may have a right to purchase under the Plan until such shares have been purchased on the applicable Purchase Date.

SECTION 13 Securities Law Requirements.

Shares of Stock shall not be issued under the Plan unless the issuance and delivery of such shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act of

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded.

SECTION 14 Stock Offered Under The Plan.

(a) Authorized Shares. The maximum aggregate number of shares of Stock available for purchase under the Plan is 1,526,239 shares plus an annual increase to be added on the first day of each of the Company’s fiscal years for a period of up to ten years, beginning with the fiscal year that begins January 1, 2022, equal to the least of (i) one percent (1%) of the outstanding shares of Stock on such date, (ii) 7,631,196 shares, or (iii) a lesser amount determined by the Committee or Board. The aggregate number of shares available for purchase under the Plan (and the limit in clause (ii) to the annual increase thereto) shall at all times be subject to adjustment pursuant to Section 14(b).

(b) Antidilution Adjustments. The aggregate number of shares of Stock offered under the Plan, the individual and aggregate Participant share limitations described in Section 8(c) and the price of shares that any Participant has elected to purchase shall be adjusted proportionately by the Committee in the event of any change in the number of issued shares of Stock (or issuance of shares other than Common Stock) by reason of any forward or reverse share split, subdivision or consolidation, or share dividend or bonus issue, recapitalization, reclassification, merger, amalgamation, consolidation, split-up, spin-off, reorganization, combination, exchange of shares of Stock, the issuance of warrants or other rights to purchase shares of Stock or other securities, or any other change in corporate structure or in the event of any extraordinary distribution (whether in the form of cash, shares of Stock, other securities or other property), in any case, in a manner that complies with Section 423 of the Code.

(c) Reorganizations. Any other provision of the Plan notwithstanding, in the event of a Corporate Reorganization in which the Plan is not assumed by the surviving corporation or its parent corporation pursuant to the applicable plan of merger or consolidation, the Offering Period then in progress shall terminate immediately prior to the effective time of such Corporate Reorganization and either shares shall be purchased pursuant to Section 8 or, if so determined by the Board or Committee, all amounts in all Participant Accounts shall be refunded pursuant to Section 15 without any purchase of shares. The Plan shall in no event be construed to restrict in any way the Company’s right to undertake a dissolution, liquidation, merger, consolidation or other reorganization.

SECTION 15 Amendment Or Discontinuance.

The Board or Committee shall have the right to amend, suspend or terminate the Plan at any time and without notice; provided, however, that any amendment that would be treated as the adoption of a new plan for purposes of Section 423 of the Code will have no force or effect unless approved by the shareholders of the Company within twelve (12) months before or after its adoption. Upon any such amendment, suspension or termination of the Plan during an Offering Period, the Board or Committee may in its discretion determine that the applicable Offering shall immediately terminate and that all amounts in the Participant Accounts shall be carried forward into a payroll deduction account for each Participant under a successor plan, if any, or promptly refunded to each Participant. Except as provided in Section 14, any increase in the aggregate number of shares of Stock to be issued under the Plan shall be subject to approval by a vote of the stockholders of the Company. In addition, any other amendment of the Plan shall be subject to approval by a vote of the stockholders of the Company to the extent required by an applicable law or regulation. This Plan shall continue until the earlier to occur of (a) termination of this Plan pursuant to this Section 15 or (b) issuance of all of the shares of Stock reserved for issuance under this Plan.

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

SECTION 16 Limitation on Liability.

Notwithstanding anything to the contrary in the Plan, neither the Company, nor any of its Subsidiaries, nor the Committee, nor any person acting on behalf of the Company, any of its Subsidiaries, or the Committee, will be liable to any Participant, to any permitted transferee, to the estate or beneficiary of any Participant or any permitted transferee, or to any other person by reason of any acceleration of income, any additional tax, or any penalty, interest or other liability asserted by reason of the failure of the Plan or any option to purchase Stock to satisfy the requirements of Section 423, or otherwise asserted with respect to the Plan or any option to purchase Stock.

SECTION 17 Unfunded Plan.

The Company’s obligations under the Plan are unfunded, and no Participant will have any right to specific assets of the Company in respect of any option to purchase Stock. Participants will be general unsecured creditors of the Company with respect to any amounts due or payable under the Plan.

SECTION 18 Governing Law

The Plan shall be governed by the laws of the state of California, without application of the conflicts of law principles thereof.

SECTION 19 Execution.

To record the adoption of the Plan by the Board, the Company has caused its authorized officer to execute the same.


ROCKLEY PHOTONICS HOLDINGS LIMITED

By:		/s/ Andrew Rickman
Name:		Andrew Rickman
Title:		Chief Executive Officer

Date:

ROCKLEY PHOTONICS HOLDINGS LIMITED

2021 EMPLOYEE STOCK PURCHASE PLAN

Exhibit 10.23

Rockley Photonics Holdings Limited

as Borrower

Certain Companies

as Guarantors

Argentum Securities Ireland plc

as Original Lender

Credit Suisse International as Agent and Security Agent

and

SIG-i Capital AG

as Arranger

relating to

a term facility of USD 33,949,000, originally dated 29 September 2020, as amended from time to time and as more recently amended and restated by way of an Amendment and Restatement Deed dated 28 June 2021.

Simmons & Simmons LLP

Citypoint, 1 Ropemaker Street

London, EC2Y 9SS

United Kingdom

T +44 207 628 2020

F +44 207 628 2070

CONTENTS


1.	Definitions and interpretation	1

2.	The facility	22

3.	Purpose	23

4.	Conditions of utilisation	24

5.	Utilisation	24

6.	Repayment	25

7.	Prepayment and cancellation	26

8.	Conversion	29

9.	Interest	31

10.	Interest periods	32

11.	Tax gross-up and indemnities	32

12.	Increased costs	42

13.	Other indemnities	44

14.	Mitigation by the lenders	45

15.	Costs and expenses	46

16.	Guarantee and indemnity	47

17.	Representations	51

18.	Information undertakings	56

19.	General undertakings	62

20.	Events of default	72

21.	Changes to the lenders	77

22.	Changes to the obligors	82

23.	Additional borrowers	82

24.	Resignation of a borrower	82

25.	Additional guarantors	83

26.	Repetition of representations	84


27.	Resignation and release of security	84

28.	Role of the agent and the arranger	84

29.	Conduct of business by the finance parties	93

30.	Sharing among the finance parties	93

31.	Payment mechanics	94

32.	Set-off	97

33.	Notices	97

34.	Calculations and certificates	98

35.	Partial invalidity	99

36.	Remedies and waivers	99

37.	Amendments and waivers	99

38.	Confidential information	100

39.	Limited recourse	103

40.	Conflicts as to pricing under this Agreement	104

41.	Counterparts	104

42.	Governing law	104

43.	Enforcement	104

SCHEDULE 1: THE ORIGINAL PARTIES		103

PART 1: THE ORIGINAL OBLIGORS		103

PART 2: THE ORIGINAL LENDERS		103

SCHEDULE 2: CONDITIONS PRECEDENT TO INITIAL UTILISATION		104

PART 1:		104

PART 2: CONDITIONS PRECEDENT REQUIRED TO BE DELIVERED BY AN ADDITIONAL OBLIGOR		106

PART 3: TRANSACTION SECURITY DOCUMENTS AND SECURITY RELATED DOCUMENTS TO BE DELIVERED BY ADDITIONAL OBLIGORS		108

SCHEDULE 3: UTILISATION REQUEST		109

SCHEDULE 4: FORM OF TRANSFER CERTIFICATE		110


SCHEDULE 5: FORM OF ASSIGNMENT AGREEMENT			113

SCHEDULE 6: FORM OF ACCESSION DEED			116

SCHEDULE 7: FORM OF RESIGNATION LETTER			119

SCHEDULE 8: FORM OF COMPLIANCE CERTIFICATE			120

SCHEDULE 9: EXISTING SECURITY			121

SCHEDULE 10: PRICING			122

SCHEDULE 11: SPAC CONVERSION SHARE NOTICE			124

iii

THIS AGREEMENT was originally dated originally dated 29 September 2020, as amended from time to time and as more recently amended and restated on the Second Effective Date being _______ 2021 by way of an Amendment and Restatement Deed dated 28 June 2021.

BETWEEN:

(1)	ROCKLEY PHOTONICS HOLDINGS LIMITED (an exempted company incorporated with limited liability in the Cayman Islands, with registration number 372789) (the “Borrower”);

(2)	THE SUBSIDIARIES of the Borrower listed in Part 1 of Schedule 1 as guarantors (the “Guarantors”);

(3)	THE ENTITY listed in Part 2 Schedule 1 as lender (the “Original Lender”);

(4)	CREDIT SUISSE INTERNATIONAL as agent of the other Finance Parties (the “Agent”);

(5)	CREDIT SUISSE INTERNATIONAL as security trustee for the Secured Parties (the “Security Agent”); and

(6)	SIG-i CAPITAL AG as arranger (the “Arranger”).

IT IS AGREED as follows:

1.	Definitions and interpretation

1.1	Definition

In this Agreement:

“Accession Deed” means a document substantially in the form set out in Schedule 6 (Form of Accession Deed) or as an annex to the Amendment and Restatement Deed.

“Account Debtor” means any person who is obligated on a receivable.

“Accreted Principal” means the product of: (i) the Principal Amount; and (ii) the Accreted Principal Multiple.

“Accreted Principal Date” means the relevant date on and for which the Accreted Principal Multiple is to be calculated for in accordance with the terms of this Agreement.

“Accreted Principal Multiple” means the multiple to be utilised for the purposes of calculating the Accreted Principal as indicated below in column 2 (Accreted Principal Multiple) and which shall apply during the corresponding time periods indicated in column 1 below:


Column 1 - Time period		Column 2 - Accreted Principal Multiple
The Closing Date to and including the Maturity Date		The multiple which shall be the sum of: (A) 1.00; and (B) the product of (x) 0.236; and (y) the ratio (expressed as a fraction) between: (i) the number of days falling between (and including) the Second Effective Date to the Accreted Principal Date; and (ii) the number of days falling between (and including) the Second Effective Date to the Maturity Date.

The date immediately following the Maturity Date (to the extent that any principal amount and/or interest remains outstanding under the Facility) and any date subsequent to such date		1.236x

“Add-on Multiple”: means the multiple to be utilised for the purposes of calculating the Exit Value as indicated below in column 2 (Add-on Multiple), and which shall apply if a Greater Value Exit occurs during the corresponding time period indicated in column 1 below:


Column 1 – Time period		Column 2 – Add-on Multiple
A Greater Value Exit occurs from and including the Second Effective Date to and including the date falling two years from the Closing Date (the “Second Anniversary Date”)		The aggregate of the Add-on Multiple Ratio and 1.236x

A Greater Value Exit occurs from and excluding the Second Anniversary Date to and including the date falling on the three years from the Closing Date (the “Third Anniversary Date”)		The aggregate of the Add-on Multiple Ratio and 1.488x

A Greater Value Exit occurs from and excluding the Third Anniversary Date to and including the date falling four years from the Closing Date (the “Fourth Anniversary Date”)		The aggregate of the Add-on Multiple Ratio and 1.835x

A Greater Value Exit occurs from and excluding the Fourth Anniversary Date to and including the date falling on the applicable Original Maturity Date		The aggregate of the Add-on Multiple Ratio and 2.126x

“Add-on Multiple Ratio”: means the amount calculated as the ratio (expressed as a fraction) of:

(A)

an amount equal to the applicable Equity Valuation after deducting the Strike Price Valuation; and

(B)

the Starting Valuation.

“Additional Borrower” means a company which becomes an Additional Borrower in accordance with Clause 23 (Additional borrowers).

“Additional Guarantor” means a company which becomes an Additional Guarantor in accordance with Clause 25 (Additional guarantors).

“Additional Obligor” means an Additional Borrower or an Additional Guarantor.

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

“Amendment and Restatement Deed” means an Amendment and Restatement Deed amending and restating the Original Facility Agreement and dated on or around the date of the First Effective Date, and made between (amongst others), the Borrower, the Agent, the Arranger, the Original Lender and the Guarantors.

“Amended Facility Agreement” means the Original Facility Agreement as amended by the Amendment and Restatement Deed on or around the First Effective Date.

“Amendment Letter” means an amendment letter dated 29 January 2021 from the Original Lender to the Resigning Borrower.

“Article 55 BRRD” means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.

“Assignment Agreement” means an agreement substantially in the form set out in Schedule 5 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

“Availability Period” means (i) the period from and including the date of the Original Facility Agreement to and including the date falling two weeks after the date of the Original Facility Agreement; and (ii) the period from and including the Increase Date (if applicable) to and including the date falling 15 Business Days after the Increase Date.

“Available Commitment” means a Lender’s Commitment minus:

(A)

the amount of its participation in any outstanding Loans; and

(B)

in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date.

“Available Facility” means the aggregate for the time being of each Lender’s Available Commitment.

“Bail-In Action” means the exercise of any Write-down and Conversion Powers.

“Bail-In Legislation” means:

(A)

in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

(B)

in relation to the United Kingdom, the UK Bail-In Legislation; and

(C)

in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.

“Base Multiple” means the multiple to be utilised for the purposes of calculating the Exit Value as indicated below in column 2 (Base Multiple), and which shall apply if a Par Value Exit occurs during the corresponding time period indicated in column 1 below:


Column 1 – Time period		Column 2 – Base Multiple
A Par Value Exit occurs from and including the Second Effective Date to and including the date falling two years from the Closing Date (the “Second Anniversary Date”)		1.236x

A Par Value Exit occurs from and excluding the Second Anniversary Date to and including the date falling on the three years from the Closing Date (the “Third Anniversary Date”)		1.488x

A Par Value Exit occurs from and excluding the Third Anniversary Date to and including the date falling four years from the Closing Date (the “Fourth Anniversary Date”)		1.835x

A Par Value Exit occurs from and excluding the Fourth Anniversary Date to and including the date falling on the Original Maturity Date		2.126x

“Bonus Issue” means any bonus issue of the shares of the Borrower or other securities of the Borrower by way of capitalisation of profits or reserves.

“Borrower” means an Original Borrower or an Additional Borrower unless it has ceased to be a Borrower in accordance with Clause 24 (Resignation of a borrower).

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York.

“Cash Equivalents” means:

(A)

marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any state of the United States or the United Kingdom having maturities of not more than one (1) year from the date of acquisition; and

(B)

commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.

“Change of Control” means any person or group of persons acting in concert (as defined in the City Code on Takeovers and Mergers) gains direct or indirect control of the Borrower other than as a result of:

(A)

a new Holding Company of the Borrower being imposed for the purposes of a Flotation or Reorganisation;

(B)

the Rockley SPAC Merger;

(C)

the Rockley Share Exchange; or

(D)

a SPAC Listing.

For the purposes of this definition, “control” of the Borrower means:

(A)

the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

(1)

cast, or control the casting of, more than 30% of the maximum number of votes that might be cast at a general meeting of the Borrower;

(2)

appoint or remove all, or the majority, of the directors or other equivalent officers of the Borrower; or

(3)

give directions with respect to the operating and financial policies of the Borrower with which the directors or other equivalent officers of the Borrower are obliged to comply;

(B)

the holding beneficially of more than 30% of the issued share capital of the Borrower (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).

“Closing Date” means the date of the Original Facility Agreement.

“Code” means the US Internal Revenue Code of 1986.

“Commitment” means:

(A)

in relation to an Original Lender, the amount set opposite its name under the heading “Commitment” in Schedule 1 (The Original Parties) and the amount of any other Commitment transferred to it under this Agreement; and

(B)

in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

“Compliance Certificate” means a certificate substantially in the form set out in Schedule 6 (Form of Compliance Certificate).

“Confidential Information” means all information relating to the Borrower, any Obligor, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

(A)

any Obligor or any of their advisers; or

(B)

another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Obligor or any of their advisers,

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

(1)

is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 38 (Confidentiality); or

(2)

is identified in writing at the time of delivery as non-confidential by any Obligor or any of their advisers; or

(3)

is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (A) or (B) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with any Obligor and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

“Confidentiality Undertaking” means a confidentiality undertaking substantially in the form most recently recommended by the LMA or in any other form agreed between the Borrower and the Agent.

“Copyright” all copyright rights, applications or registrations and like protections in each work or authorship or derivative work, whether published or not (whether or not it is a trade secret) now or later existing, created, acquired or held.

“CTA” means the Corporation Tax Act 2009.

“Debenture” means the debenture dated on or about the Closing Date and made between (amongst others) the Resigning Borrower and the Security Agent.

“Default” means an Event of Default or any event or circumstance specified in Clause 20 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

“Delegate” means any delegate, agent, attorney or co-trustee appointed by the Security Agent.

“Disruption Event” means either or both of:

(A)

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(B)

the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

(1)

from performing its payment obligations under the Finance Documents; or

(2)

from communicating with other Parties in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

“EEA Member Country” means any member state of the European Union, Iceland, Liechtenstein and Norway.

“Eleuthera SPC” means an exempted company incorporated with limited liability in the Cayman Islands and registered as a portfolio company, with registered office c/o Circumference FS (Cayman) Ltd., 4th Floor, Century Yard, Cricket Square, Elgin Avenue, P.O. Box 1981, Grand Cayman, KY1-1104 Cayman Islands, acting solely on behalf of its segregated portfolio known as ‘What Light is Light SP’.

“Eligible Institution” means any Lender or other bank, financial institution, trust, fund or other entity selected by the Borrower.

“English Obligor” means Rockley Photonics Limited (registration number 08683015) in its capacity as guarantor under this Agreement from the First Effective Date.

“Equipment” means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which the Borrower has any interest.

“Equity Valuation” means, in respect of a Qualified Exit, the value per share of the ordinary issued share capital of the Borrower on such date after dividing such figure by the number of fully diluted shares in the Borrower then existing immediately following such Qualified Exit.

“ERISA” means the US Employee Retirement Income Security Act of 1974 and its regulations.

“EU Bail-In Legislation Schedule” means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

“Event of Default” means any event or circumstance specified as such in Clause 20 (Events of Default).

“Existing Ahren Facility Agreement” means the convertible loan note instrument dated 19 February 2020 under which the Original Borrower had created, and Ahren Innovation Capital Guernsey (GP) Limited acting in its capacity as general partner of Ahren LP had subscribed for, $8,000,000 of unsecured convertible loan notes.

“Existing CLN Loan Note Instrument” means the convertible loan note instrument dated 9 March 2020 under which the Original Borrower had created USD$20,000,000 unsecured convertible loan notes.

“Exit Value” means the aggregate amount owing to a Lender upon a Qualified Exit, such amount calculated by: (A) multiplying the applicable Multiple (determined in accordance with the terms of this Agreement) by the Principal Amount; and (B) adding any interest due and payable to the amount in (A).

“Facility” means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).

“FATCA” means:

(A)

sections 1471 to 1474 of the Code or any associated regulations;

(B)

any treaty, law, guidance or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (A) above or any analogous provision of non-US law; or

(C)

any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (A) or (B) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

“FATCA Application Date” means:

(A)

in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 01 July 2014; or

(B)

in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraph (A) above, the first date from which such payment may become subject to a deduction or withholding required by FATCA.

“FATCA Deduction” means a deduction or withholding from a payment under a Finance Document required by FATCA.

“FATCA Exempt Party” means a Party that is entitled to receive payments free from any FATCA Deduction.

“FCA” means the Financial Conduct Authority acting in accordance with Part 6 of the Financial Services and Markets Act 2000.

“Finance Document” means the Original Facility Agreement, this Agreement, the Amended Facility Agreement, the Amendment Letter, the Amendment and Restatement Deed, the Transaction Security Documents, the Subordination Agreement, any Resignation Letter, any Accession Deed and any other document designated as such by the Agent and the Borrower.

“Finance Lease” means any lease or hire purchase contract, a liability under which would, in accordance with GAAP, be treated as a balance sheet liability (other than a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease).

“Finance Party” means the Agent, the Security Agent, the Arranger or a Lender.

“Financial Indebtedness” means any borrowing or financial indebtedness in the nature of borrowing for or in respect of:

(A)

monies owed to any banking, financial, lending or other similar institute or organisation;

(B)

any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

(C)

any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock, commercial paper or any similar instrument;

(D)

indebtedness for monies borrowed or raised under any other transaction that has the commercial effect of borrowing;

(E)

the amount of any liability in respect of any Finance Lease;

(F)

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(G)

unpaid professional fees payable in respect of any of transactions contemplated by this Agreement on behalf of the Lender, unpaid accrued interest on any borrowing or indebtedness referred to in this definition of “Financial Indebtedness”, together with any prepayment premiums or other penalties, fees, expenses or breakage costs arising (or which would arise) in connection with the repayment of any such borrowing or indebtedness;

(H)

any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;

(I)

any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);

(J)

any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

(K)

the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (A) to (H) above.

“First Effective Date” has the meaning given to such term in the Amendment and Restatement Deed.

“Flotation” means:

(A)

a successful application being made for the admission of any part of the share capital of the Borrower (or a new Holding Company of the Borrower) to the Official List maintained by the FCA and the admission of any part of the share capital of the Borrower to trading on the London Stock Exchange plc;

(B)

the grant of permission to deal in any part of the issued share capital of the Borrower (or a new Holding Company of the Borrower) on the New York Stock Exchange, the National Association of Securities Dealers Automated Quotations exchange (NASDAQ) or the Stock Exchange of Hong Kong (SEHK); or

(C)

the issued share capital of the Borrower is listed or quoted on any of the stock exchanges referred to in sub-paragraphs (A) or (B) above pursuant to the formation of the Rockley SPAC.

“Funding Source” means in respect of a SPV Lender, obligations incurred or securities issued by that SPV Lender in order to fund a participation by that SPV Lender in the Loan.

“GAAP” means generally accepted accounting principles in the United Kingdom.

“Governmental Approval” means any consent, authorisation, approval, order, licence, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

“Governmental Authority” means any nation or government, any state or other political sub-division thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organisation.

“Greater Value Exit” means any Qualified Exit that occurs in respect of which the Equity Valuation exceeds the Strike Price Valuation.

“Group” means the Borrower and its Affiliates.

“Guarantor” means the Parent or the Original Borrower.

“Holding Company” means, in relation to a person, any other person in respect of which it is a Subsidiary.

“IFRS” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

“Intellectual Property” means all present and future intellectual property rights in any part of the world including Patents and rights of a similar nature, applications for Patents and such rights, divisions, prolongations, renewals, extensions, supplementary protection certificates and continuations of such applications for Patents, registered and unregistered Trade Marks, registered and unregistered service marks, registered and unregistered designs and rights in designs, utility models (in each case for their full period and all extensions and renewals of them), Copyrights and rights in the nature of database rights and Copyright, registered or unregistered semiconductor topography rights and mask works and applications for any of the foregoing and the right to apply for any of them in any part of the world, inventions, processes, software, formulae, technology (whether patentable or not) data, drawings, specifications, business or trade secrets, technical information, confidential information, Know-how, business names, trade names, brand names, domain names, database rights and rights in the nature of database rights, get-up and any uniform resource identifier and any similar or analogous rights existing in any country and all legal equitable and other rights in any of them whether registered or unregistered (and including applications) and the benefit (subject to the burden) of any and all agreements, arrangements and licences (where such agreements and licences permit the creation of security without prior consent) in connection with any of the foregoing.

“Interest Period” means, in relation to a Loan, each period determined in accordance with Clause 10 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 9.3 (Default interest).

“Intra-Group Loan Note Instrument” has the meaning provided to such term in the Amendment and Restatement Deed.

“Intra-Group Loan Note Charge” means the charge over the Intra-Group Loan Note Instrument between the New Borrower and the Security Agent and dated on or around the First Effective Date.

“Inventory” means present and future inventory in which an Obligor has any interest, including merchandise, stock in trade, raw materials, parts, supplies, packing and shipping materials, work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or later owned by or in the custody or possession, actual or constructive, of an Obligor, including inventory temporarily out of its custody or possession or in transit and including returns on any accounts or other proceeds (including insurance proceeds) from the sale or disposition of any of the foregoing and any documents of title.

“ITA” means the Income Tax Act 2007.

“Know-how” means all the body of knowledge, technical experience, expertise and skills, technical processes, secret processes, formulae and technical information held by a person and relating to its business, which is not in the public domain.

“Legal Reservations” means:

(A)

the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

(B)

the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;

(C)

the principle that in certain circumstances Security granted by way of fixed charge may be recharacterised as a floating charge or that security interests purported to be constituted by an assignment may be recharacterised as a charge;

(D)

the principle that any provision for the payment of compensation or additional interest imposed pursuant to any relevant agreement may be held to be unenforceable on the grounds that it is a penalty and thus void;

(E)

the principle that an English court may not give effect to a provision dealing with the cost of litigation where the litigation is unsuccessful or the court itself has made an order for costs;

(F)

the principle that the legality, validity, binding nature or enforceability or any security under a security document which is not governed by the laws of jurisdiction where the asset or assets purported to be secured under that security document are situated may be flawed; and

(G)

similar principles, rights and defences under the laws of any relevant jurisdiction.

“Lender” means:

(A)

any Original Lender; and

(B)

any bank, financial institution, trust, fund or other entity which has become a Party as a “Lender” in accordance with Clause 21 (Changes to the Lenders),

which in each case has not ceased to be a Party as such in accordance with the terms of this Agreement.

“LMA” means the Loan Market Association.

“Loan” means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan, being the product of: (i) the Original Facility Amount and (ii) the SPAC Conversion Multiple as of the Second Effective Date, as may otherwise be reduced as a result of the conversion of debt pursuant to pursuant to Clause 8 (Conversion), whereby such amount shall be USD30,180,661 on and from the SPAC Conversion Date (subject to the completion of the conversion mechanics listed in Clause 8 (Conversion)).

“Loan Exposure Transaction” means a transaction pursuant to which an Obligor obtains direct or indirect exposure to a Loan (including but not limited to obtaining a participation, sub-participation or an assignment of a Loan or any part thereof).

“Majority Lenders” means a Lender or Lenders whose Commitments aggregate more than 66²/₃% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66²/₃% of the Total Commitments immediately prior to the reduction).

“Material Adverse Effect” means a material adverse effect on:

(A)

the business, operations, property, condition (financial or otherwise) of any Obligor;

(B)

the ability of an Obligor to perform its payment obligations under the Finance Documents; or

(C)

subject to the Legal Reservations and the Perfection Requirements, the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies or any Finance Party under any of the Finance Documents.

“Material Company” means any member of the Group which:

(A)

has gross assets, net assets or turnover (excluding intra-group items) representing 5%, or more of the gross assets, net assets or turnover of the Group, calculated on a consolidated basis; and

(B)

is a wholly owned subsidiary.

“Material Intellectual Property” means Intellectual Property which is material to the business of the Borrower and which is required by it in order to carry on its business as it is being conducted from time to time.

“Maturity Date” means 31 August 2022.

“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

(A)

(subject to paragraph (C) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

(B)

if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

(C)

if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

The above rules will only apply to the last Month of any period.

“Multiple” means:

(A)

if a voluntary prepayment is made under Clause 7.2 (Voluntary Prepayment of Loans), 1.236x;

(B)

if a Par Value Exit occurs, the relevant corresponding Base Multiple as per the definition of “Base Multiple” in this Agreement;

(C)

if a Greater Value Exit occurs, the relevant corresponding Add-on Multiple as per the definition of “Add-on Multiple” in this Agreement; or

(D)

in the case of a repayment on the Maturity Date, 1.236x; and

(E)

in any other instances, any multiple referenced under the column headed “Relevant Amount” pursuant to Schedule 10 (Pricing).

“New Debenture” means the debenture dated on or about the First Effective Date and made between (amongst others) the Borrower and the Security Agent

“New Lender” has the meaning given to that term in Clause 21 (Changes to the Lenders).

“Obligor” means the Borrower and the Guarantors.

“Obligor’s Agent” means the Borrower, appointed to act on behalf of each Obligor in relation to the Finance Documents pursuant Clause 2.5 (Obligors’ Agent).

“Obligor’s Books” means all of the books and records of each Obligor including ledgers, records regarding each Obligor’s assets or liabilities, the Secured Assets, business operations or financial condition and all computer programs or discs or any equipment containing such information.

“Original Borrower” means the Resigning Borrower.

“Original Facility Agreement” means the USD 35,000,000 term facility agreement originally dated 29 September 2020, as amended pursuant to the Amendment Letter and amended from time to time prior to the First Effective Date and made between (amongst others) the Resigning Borrower, Credit Suisse International as agent and as security agent and SIG-i Capital AG as arranger.

“Original Facility Amount” means USD33,949,000.

“Original Financial Statements” means the audited financial statements of the Borrower for the financial year ended 31 December 2019.

“Original Maturity Date” means the date occurring four years and six months after the date of the Original Facility Agreement (as may have been extended pursuant to the terms of the Original Facility Agreement).

“Original Obligor” means the parties listed in Part 1 of Schedule 1 to this Agreement.

“Outstanding Balance Owed” means the then current aggregate outstanding balance of the Facility, calculated on a daily basis in accordance with Clause 34.3 (Outstanding Balance Owed).

“Par Value Exit” means any Qualified Exit that occurs in respect of which the Equity Valuation is less than or equal to the Strike Price Valuation.

“Parent” means Rockley Photonics, Inc., a corporation organized under the laws of the State of Delaware with registration number 5398557, which has been qualified to do business in the State of California with registration number C3156773.

“Party” means a party to this Agreement.

“Patents” means patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions and continuations in part of the same.

“Perfection Requirements” means the making or procuring of required registrations, filings, endorsements, notarisation, stampings and/or notifications of the Transaction Security Documents within any applicable statutory time periods.

“Permitted Flotation” means the Flotation of the Rockley SPAC.

“Principal Amount” means the product of: (i) the Original Facility Amount; and (ii) the SPAC Conversion Multiple as at the Second Effective Date prior to the SPAC Conversion Date, and following completion of the SPAC Conversion on the SPAC Conversion Date, the Principal Amount as and from such SPAC Conversion Date shall be $30,180,661 (such amount excluding any interest that shall have accrued from the Second Effective Date until the SPAC Conversion Date), and as may subsequently be reduced as a result of any payments of principal made under Clause 6.1 (Repayment of Loans).

“Qualified Exit” means the occurrence of a Non-Qualified Trade Sale (such term as defined in Clause 7.4(A) (Mandatory prepayment and cancellation)).

“Qualifying Lender” has the meaning given to it in Clause 11 (Tax gross-up and indemnities).

“Quasi-Security” means an arrangement or transaction described in Clause 19.3(B).

“Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Secured Assets.

“Related Fund” in relation to a fund (the “first fund”), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.

“Relevant Market” means the London interbank market.

“Relevant Tax Jurisdiction” means, in relation to an Obligor:

(A)

its jurisdiction of incorporation;

(B)

any jurisdiction in which any asset is situated which is subject to, or is intended to be subject to, any Security to be created by it pursuant to, or in connection with, the Finance Documents in favour of any Finance Party; and

(C)

any jurisdiction in which it conducts its business.

“Reorganisation” means any consolidation or sub-division or any repurchase, purchase, cancellation, reduction or redemption of the shares of the Borrower.

“Repayment Date” means each scheduled repayment date as specified in Clause 6.1(A) (Repayment of Loans).

“Repayment Instalment” means each scheduled repayment instalment as specified in Clause 6.1(A) (Repayment of Loans).

“Repayment Premium” means the amount equal to (i) the Principal Amount then outstanding of the Facility multiplied by the relevant Multiple then applicable in accordance with the terms of this Agreement, less (ii) the Principal Amount then outstanding of the Facility.

“Repeating Representations” means each of the representations set out in Clause 17.1 (Status) to 17.5 (Validity and admissibility in evidence) (inclusive), 17.10 (No filing or stamp taxes), 17.11 (No default), 17.12 (No misleading information), 17.14 (Pari-passu ranking), 17.19 (No undisclosed Security Interest), 17.20 (Forecasts and projections), 17.22 (Jurisdiction) to 17.24 (Anti-corruption law) (inclusive), Clause 17.25 (Shares) and 17.26 (Regulatory compliance).

“Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

“Resolution Authority” means any body which has authority to exercise any Write-down and Conversion Powers.

“Responsible Officer” each of the chief executive officer, managing director, director, president, chief financial controller (or equivalent) of each Obligor.

“Resignation Letter” means a letter substantially in the form set out in Schedule 7 (Form of Resignation Letter) and/or as provided as an annex to the Amendment and Restatement Deed.

“Resigning Borrower” means Rockley Photonics Limited (registration number 08683015), a borrower under the Original Facility Agreement and which has, pursuant to a Resignation Letter or by its entry into the Amendment and Restatement Deed, ceased to be a borrower under this Agreement from the First Effective Date.

“Restricted Party” means a person:

(A)

whose name is listed on, or is owned or controlled (in each case, directly or indirectly) by a person whose name is listed on, or acting on behalf of a person whose name is listed on, any Sanctions List;

(B)

that is located in, incorporated, organised or established under the laws of, or resident in a country or territory that is the target of countrywide or territory-wide Sanctions, or owned or controlled (in each case, directly or indirectly) by, or acting on behalf of, a person located in, incorporated, organised or established under the laws of, or resident under the laws of, a country or territory that is, or the government of which is, subject to countrywide or territory-wide Sanctions;

(C)

that is a governmental agency, authority or body or state-owned enterprise of any country or territory that is subject to Sanctions;

(D)

that is otherwise the target of any countrywide or territory-wide Sanctions;

(E)

whose property, or who is owned or controlled (in each case, directly or (to the Borrower’s knowledge) indirectly) by a person whose property, or who is acting on behalf of a person whose property, in each case, has been blocked, or is subject to seizure, forfeiture or confiscation under any applicable anti-terrorism law; or

(F)

with which any Finance Party is prohibited from dealing or otherwise engaging in any transaction pursuant to Sanctions.

“Rockley Mergersub” means Rockley Mergersub Limited, a limited liability company incorporated in the Cayman Islands with registered company number IC-372792 and having its registered address at c/o International Corporation Services Ltd., P.O. Box 472, Harbour Place, 2^nd Floor, 103 South Church Street, George Town, Grand Cayman KY1-1106, Cayman Islands.

“Rockley Share Exchange” means the exchange of the shares of the Rockley SPAC for ordinary shares of the Borrower pursuant to a share capital increase of the Borrower (such share capital increase governed by Cayman law statute in accordance with the laws of the Cayman Islands).

“Rockley SPAC” means the SPAC formed subsequent to and as a result of the Rockley SPAC Merger and whose shares are, immediately prior to the effective date of the completion of such merger, subject to the Rockley Share Exchange.

“Rockley SPAC Merger” means the merger of Rockley Mergersub and SC Health.

“Sanctions” means the economic, trade, financial or other sanctions laws, regulations, executive orders, embargoes or other restrictive measures enacted, imposed, administered or enforced from time to time by any Sanctions Authority.

“Sanctions Authority” means:

(A)

the United Nations;

(B)

the United States of America;

(C)

the European Union;

(D)

the United Kingdom of Great Britain and Northern Ireland;

(E)

the State Secretariat for Economic Affairs SECO; and

(F)

the governments and official institutions or agencies of any of paragraphs (A) to (E) above, including OFAC, the US Department of State, and Her Majesty’s Treasury.

“Sanctions List” means each list maintained or public designation made by any Sanctions Authority in respect of the targets or scope of the Sanctions that are administered and enforced by that Sanctions Authority including:

(A)

the “Specially Designated Nationals List” and the “Consolidated Non-SDN List” each administered and enforced by OFAC; and

(B)

the “Financial Sanctions: Consolidated List of Targets” administered and enforced by Her Majesty’s Treasury,

in each case as amended, supplemented or substituted from time to time.

“Second Effective Date” has the meaning provided to such term in the Amendment and Restatement Deed.

“SC Health” means an exempted company incorporated with limited liability in the Cayman Islands with reporting file number 001-38972, being an existing SPAC whose shares are presently listed on the New York Stock Exchange.

“Scheme of Arrangement” means the court-approved scheme of arrangement to be concluded on the First Effective Date by which process the shares (and other equity interests) held in the Resigning Borrower will be replaced by shares in the Borrower.

“Secured Assets” means all of the assets of any Obligor which from time to time are, or are expressed to be, the subject of the Transaction Security.

“Secured Parties” means each Finance Party from time to time party to this Agreement, any Receiver or Delegate.

“Security” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

“SPAC” means:

(A)

the Rockley SPAC; or

(B)

any special purposes acquisition company formed for the purpose of raising capital through an initial public offering of equity and using those funds to acquire an operating business and the shares of which are listed on the New York Stock Exchange or other exchange.

“SPAC Completion Date” means the date upon which all transactions constituting the Rockley SPAC complete and the Rockley SPAC is duly formed.

“SPAC Conversion” has the meaning provided to such term in paragraph (A) of Clause 8.2 (Procedure – SPAC Conversion Shares).

“SPAC Conversion Amount” means USD12,934,569, being the product of: (i) 30 per cent. of the Original Facility Amount (excluding any accrued interest) and: (ii) the SPAC Conversion Multiple.

“SPAC Conversion Date” has the meaning provided to such term in Clause 8.1(B) (Conversion prior to a SPAC Listing).

“SPAC Conversion Multiple” means 1.27x.

“SPAC Conversion Share Notice” means a notice set out in substantially the form as it appears in Schedule 11 (SPAC Conversion Share Notice) to this Agreement.

“SPAC Conversion Shares” means the shares of the Borrower up to an amount as calculated in accordance with Clause 8.2 (Procedure – SPAC Conversion Shares).

“SPAC Listing” means the Flotation of the issued share capital of the Borrower further to the formation of the Rockley SPAC.

“SPAC Listing Date” means the date upon which the SPAC Listing is completed.

“SPAC Lock-up Period” means 90 days from the SPAC Conversion Date.

“SPV Lender” means a Lender that is a special purpose trust, fund, company or other vehicle which is engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets and which finances such activities directly or indirectly through the issuance of asset backed commercial paper, notes or other financial instruments.

“Starting Valuation” means the value per share of the issued share capital of the Borrower (known as “series E”), being USD14.281, as adjusted pursuant to or as a result of any restructurings of the share capital following the Scheme of Arrangement.

“Strike Price Valuation” means the value derived from applying the multiple of 2.5x to the Starting Valuation, being USD35.702, as adjusted pursuant to or as a result of any restructurings of the share capital following the Scheme of Arrangement.

“Subordination Agreement” means a subordination agreement dated on or around the First Effective Date and made between (amongst others) the Original Borrower as original debtor, the Borrower as subordinated creditor and Credit Suisse International as Agent and Security Agent, in form and substance satisfactory to the Arranger and Credit Suisse International as Agent and Security Agent (as the same may be amended, supplemented, varied, novated or restated from time to time).

“Subsidiary” means a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006.

“Supplemental Debenture” means the debenture dated on or about the First Effective Date and made between (amongst others) the Original Borrower and the Security Agent.

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

“Tax Deduction” has the meaning given to it in Clause 11 (Tax Gross Up and Indemnities)

“Total Commitments” means the aggregate of the Commitments being $33,949,000 at the date of this Agreement.

“Trade Marks” means trade mark and service mark rights, registered or not, applications to register and registrations and like protections, and the entire goodwill of the business of a person connected with the trade marks.

“Transaction Security” means the Security created or expressed to be created in favour of the Security Agent pursuant to the Transaction Security Documents.

“Transaction Security Documents” means the Debenture, the New Debenture, the Supplemental Debenture, the Intra-Group Loan Note Charge and any other document entered into by any Obligor creating or expressed to create any Security over all or any part of its assets in respect of the obligations of any of the Obligors under any of the Finance Documents.

“Transfer Agent” means Computershare.

“Transfer Certificate” means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrower.

“Transfer Date” means, in relation to an assignment or a transfer, the later of:

(A)

the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

(B)

the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate.

“UK Bail-In Legislation” means Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).

“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents.

“US” means the United States of America.

“US GAAP” means generally accepted accounting principles of the United States of America.

“US Obligor” means Rockley Photonics, Inc. (as more particularly described in Schedule 1 Part 1 (The Original Obligors)).

“US Tax Obligor” means:

(A)

a Borrower which is resident for tax purposes in the US; or

(B)

an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

“Utilisation” means a utilisation of the Facility.

“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Loan is to be made.

“Utilisation Request” means a notice substantially in the form set out in Schedule 3 (Requests).

“VAT” means:

(A)

any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112);

(B)

in relation to the United Kingdom, value added tax imposed by the Value Added Tax Act 1994 and legislation and regulations supplemental thereto; and

(C)

any other tax of a similar nature, whether imposed in the United Kingdom or a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraphs (A) or (B) above, or imposed elsewhere.

“Write-down and Conversion Powers” means:

(A)

in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;

(B)

in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and

(C)

in relation to any other applicable Bail-In Legislation:

any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

any similar or analogous powers under that Bail-In Legislation.

1.2	Construction

(A)

Unless a contrary indication appears, any reference in this Agreement to:

(1)

the “Agent”, the “Borrower” any “Finance Party”, any “Lender”, any “Arranger”, any “Obligor”, any “Party” or any “Security Agent” shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents and, in the case of the Security Agent, any person for the time being appointed as Security Agent or Security Agents in accordance with the Finance Documents;

(2)

“assets” includes present and future properties, revenues and rights of every description;

(3)

a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

(4)

“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

(5)

a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);

(6)

a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law being of the type that the relevant person is obliged to comply with) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

(7)

a provision of law is a reference to that provision as amended or re-enacted;

(8)

any matter “including” specific instances or examples of such matter shall be construed without limitation to the generality of that matter (and references to “includes” and “including” shall be construed accordingly);

(9)

a time of day is a reference to London time; and

(10)

any references to “this Agreement” means the Original Facility Agreement and as more recently amended and restated by way of an Amendment and Restatement Deed dated on or around the Second Effective Date (and as may be further amended and/or restated, novated, supplemented or extended from time to time).

(B)

The determination of the extent to which a rate is “for a period equal in length” to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.

(C)

Clause and schedule headings are for ease of reference only.

(D)

Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

(E)

A reference to the singular includes the plural and vice versa.

(F)

A Default (other than an Event of Default) is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been remedied to the satisfaction of the Agent or waived in writing by the Agent.

1.3	Currency symbols and definitions

“$”, “USD” and “dollars” denote the lawful currency of the United States of America.

“£”, “GBP” and “pound sterling” denote the lawful currency of the United Kingdom.

1.4	Third party rights

A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

2.	The facility

2.1	The Facility

Subject to the terms of this Agreement the Lenders make available to the Borrower a dollarterm loan facility in an aggregate amount equal to the Total Commitments.

2.2	[Reserved]

2.3	Finance Parties’ rights and obligations

(A)

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

(B)

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with Clause 2.3(c). The rights of each Finance Party include any debt owning to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor which relates to a Finance Party’s participation in a Facility or its role under a Finance Document (including any such amount payable to the Agent on its behalf) is a debt owing to that Finance Party by that Obligor.

(C)

A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.

2.4	[Reserved]

2.5	Obligors’ Agent

(A)

Each Obligor (other than the Borrower) by its execution of this Agreement, an Accession Deed or the Amendment and Restatement Deed irrevocably appoints the Borrower (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:

(1)

the Borrower on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of the Borrower, Utilisation Requests), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and

(2)

each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Borrower,

and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

(B)

Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors’ Agent or given to the Obligors’ Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors’ Agent and any other Obligor, those of the Obligors’ Agent shall prevail.

3.	Purpose

3.1	Purpose

3.2	The Borrower shall apply all amounts borrowed or assumed by it under the Facility towards its general corporate and working capital purposes.

3.3	Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

4.	Conditions of utilisation

4.1	Initial conditions precedent

(A)

The Borrower may not deliver a Utilisation Request unless the Agent has received all of the documents and other evidence listed Schedule 2 (Conditions precedent to Initial Utilisation) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.

(B)

Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause 4.1(a), the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

4.2	Further conditions precedent

The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) if on the date of the Utilisation Request and on the proposed Utilisation Date:

(A)

no Default is continuing or would result from the proposed Loan; and

(B)

the Repeating Representations to be made by each Obligor are true in all material respects.

4.3	Maximum number of Loans

(A)

The Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation two or more Loans would be outstanding.

(B)

The Borrower may not request that a Loan be divided if, as a result of the proposed division, two or more Loans would be outstanding.

5.	Utilisation

5.1	Delivery of a Utilisation Request

The Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request.

5.2	Completion of a Utilisation Request

(A)

Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(1)

the proposed Utilisation Date is a Business Day within the Availability Period and not less than 5 Business Days after the date of the Utilisation Request (or such other time as agreed between the Borrower and the Arranger); and

(2)

the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount).

(B)

Only one Loan may be requested in each Utilisation Request.

5.3	Currency and amount

(A)

The currency specified in a Utilisation Request must be dollars.

(B)

The amount of the proposed Loan must be an amount which is not more than the Available Facility and which is a minimum of the aggregate of the Commitments or, if less, the Available Facility.

5.4	Lenders’ participation

(A)

If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date.

(B)

The amount of each Lender’s participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.

(C)

The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan.

5.5	Cancellation of Commitment

The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period.

6.	Repayment

6.1	Repayment of Loans

(A)

The Borrower shall repay the aggregate amount of the Loans utilised or assumed by it in instalments by repaying on each Repayment Date an amount equal to each Repayment Instalment indicated below and which reduces the Principal Amount by the amount set out opposite that Repayment Date for each corresponding Repayment Instalment, subject always to no Qualified Exit occurring at the time:


Repayment Date	Repayment Instalment		Reduction of Principal Amount
31 December 2021		USD5,000,000		USD4,045,307
31 March 2022		USD7,500,000		USD6,067,961
Maturity Date		USD24,803,297		USD20,067,393

(B)

If the Agent receives a payment for applicable amounts due in respect of a Repayment Instalment that is insufficient to discharge the full Repayment Instalment due on a specific Repayment Date, the Agent shall apply that payment towards the obligations of the Borrower under the Finance Documents in the order stipulated under Clause 31.5 (Partial payments), provided further that, for the purposes of Clause 31.5 (Partial payments) and this Clause 6 (Repayment), the difference between the Repayment Instalment and the Reduction of Principal Amount paid shall be treated as a fee, interest or commission as per Clause 31.5(A)(2) (Partial payments) and thus shall be applied prior to any payments of principal.

(C)

Certain provisions of this Agreement are expressed to apply following the Maturity Date. For the avoidance of doubt, such provisions shall only apply to the extent that this Agreement is extended beyond the Maturity Date (any such extension being subject to the absolute discretion of the parties hereto).

6.2	Reborrowing

The Borrower may not reborrow any part of the Facility which is repaid.

7.	Prepayment and cancellation

7.1	Illegality

If, in any applicable jurisdiction, it becomes unlawful for any Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan:

(A)

that Lender shall promptly notify the Agent upon becoming aware of that event;

(B)

upon the Agent notifying the Borrower, each Available Commitment of that Lender will be immediately cancelled; and

(C)

to the extent that the Lender’s participation has not been transferred pursuant to Clause 7.3(D), the Borrower shall repay that Lender its Outstanding Balance Owed based on its participation in the Loans made to the Borrower on the last day of the Interest Period for each Loan occurring after the Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender’s corresponding Commitment(s) shall be cancelled in the amount of the participations repaid.

7.2	Voluntary prepayment of Loans

(A)

Subject to the remainder of this Clause, prior to the Maturity Date, the Borrower may prepay the whole, but not part, of the Loans, plus the applicable Repayment Premium payable.

(B)

No prepayment may be made under this Clause 7.2 at any time after the Borrower has delivered a Qualified Exit Notice to the Agent which remains outstanding or if the board of directors of the Borrower reasonably considers that a Qualified Exit will take place within 3 Months of the proposed date upon which the prepayment is intended to be made.

7.3	Right of replacement or repayment and cancellation in relation to a single Lender

(A)

If:

(1)

any sum payable to any Lender by an Obligor is required to be increased under Clause 11.2(C); or

(2)

any Lender claims indemnification from the Borrower under Clause 11.3 (Tax indemnity),

the Borrower may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lender’s participation in the Loans or give the Agent notice of its intention to replace that Lender in accordance with Clause 7.3(D).

(B)

On receipt of a notice of cancellation referred to in Clause 7.3(A), the Commitment of that Lender shall immediately be reduced to zero.

(C)

On the last day of each Interest Period which ends after the Borrower has given notice of cancellation under Clause 7.3(A) (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay an amount equal to the Outstanding Balance Owed of such Lender’s participation in the outstanding Loans.

(D)

If:

(1)

any of the circumstances set out in Clause 7.3(A) apply to a Lender; or

(2)

an Obligor becomes obliged to pay any amount in accordance with Clause 7.1 (Illegality) to any Lender,

the Borrower may, on 5 Business Days’ prior notice to the Agent and that Lender (or in relation to the Original Lender, the Arranger), replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall) transfer pursuant to Clause 21 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to an Eligible Institution which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 21 (Changes to the Lenders) for a purchase price in cash payable at the time of the transfer in an amount equal to the Outstanding Balance Owed of such Lender’s participation in the outstanding Loans.

(E)

The replacement of a Lender pursuant to Clause 7.3(D) shall be subject to the following conditions:

(1)

the Borrower shall have no right to replace the Agent;

(2)

neither the Agent nor any Lender (or the Arranger, on behalf of the Original Lender) shall have any obligation to find a replacement Lender;

(3)

in no event shall the Lender replaced under Clause 7.3(D) be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and

(4)

the Lender shall only be obliged to transfer its rights and obligations pursuant to Clause 7.3(D) once it is satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to that transfer.

(F)

A Lender (or in the case of the Original Lender, the Arranger) shall perform the checks described in Clause 7.3(E)(4) as soon as reasonably practicable following delivery of a notice referred to in Clause 7.3(D) and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks.

7.4	Mandatory prepayment and cancellation

(A)

For the purpose of this Clause 7.4:

“Non-Qualified Trade Sale” means:

(1)

a Change of Control; or

(2)

the sale of all or substantially all of the assets of the Borrower whether in a single transaction or a series of related transactions.

“Qualified Exit” means a Non-Qualified Trade Sale.

(B)

Upon the occurrence of a Qualified Exit, the Facility will be immediately cancelled and shall immediately cease to be available for further utilisation and an amount equal to the applicable Exit Value shall become due and payable upon completion of a Non-Qualified Trade Sale. The Borrower shall give the Agent written notice of a Qualified Exit by delivering a notice to the Agent and the Arranger stipulating the relevant date on which a Qualified Exit will occur, including the terms and timelines of the planned Qualified Exit (the “Qualified Exit Notice”).

7.5	[Reserved]

7.6	Restrictions

(A)

Any notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment and cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

(B)

Any prepayment under this Agreement in respect of amounts due under Clause 20.15 (Acceleration) shall be made on the basis of the Outstanding Balance Owed or, where or Clause 20.16 (Acceleration upon an Insolvency Event) applies, pursuant to that clause.

(C)

The Borrower shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

(D)

No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

(E)

If the Agent receives a notice under this Clause 7 (Prepayment and cancellation) it shall promptly forward a copy of that notice to either the Borrower or the affected Lender (and in the case of the Original Lender which is an affected Lender, the Arranger), as appropriate.

(F)

If all or part of any Lender’s participation in a Loan is repaid or prepaid an amount of that Lender’s Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment.

8.	Conversion

8.1	Conversion prior to a SPAC Listing

(A)

On the SPAC Completion Date, an amount equal to the SPAC Conversion Amount will be discharged in full by way of a conversion into and in consideration for the issue of SPAC Conversion Shares issued pro rata to each Lender (or instead directly to a person designated by the Lender to receive such shares instead of the relevant Lender (the “Lender Designate”)) in accordance with the SPAC Conversion Amount owed to each Lender.

(B)

The SPAC Conversion Shares will be issued to each Lender (or if applicable, directly to its Lender Designate) accordingly on (and in any event no later than) the SPAC Completion Date and in accordance with Clause 8.2 (Procedure - SPAC Conversion Shares) (the “SPAC Conversion Date”).

(C)

All Principal Amounts (together with all interest accrued) less an amount equal to the SPAC Conversion Amount once the SPAC Conversion Date has occurred, shall remain due and payable in accordance with the terms of this Agreement.

(D)

Any interest accrued on the SPAC Conversion Amount (the “Roll Over Interest”) falling due and payable on the SPAC Conversion Date shall rollover and be paid in cash on the next interest payment date following the SPAC Conversion Date in accordance with Clause 9.2 (Payment of Interest).

8.2	Procedure - SPAC Conversion Shares

(A)

On the SPAC Conversion Date, the SPAC Conversion Amount will be automatically converted into and utilised as consideration for the number of shares of the Borrower (such shares being the SPAC Conversion Shares) on par at the same effective price paid to the then existing shareholders of the Borrower (the “SPAC Conversion”), with the number SPAC Conversion Shares to be issued as confirmed by the Parties in accordance with Clause 8.2(B) below and no further action shall be required of the Lenders, a Lender Designate or any of the other Finance Parties in connection with the SPAC Conversion.

(B)

Prior to (and no later than) the SPAC Conversion Date, the Borrower will calculate the exact number of SPAC Conversion Shares to be issued to the Lender or a Lender Designate in accordance with Clause 8.2(A) above, and the Borrower shall confirm the number of SPAC Conversion Shares to be issued in accordance with Clause 8.2(A) above by sending a notice detailing such number of shares in writing substantially in the form as provided in Schedule 11 (SPAC Conversion Share Notice), which the Arranger will acknowledge, as soon as reasonably practicable, and in any event no later than 2 Business Days’ following receipt of such notice in writing from the Borrower, by countersigning the acknowledgment to the notice, substantially in the form as provided in Schedule 11 (SPAC Conversion Share Notice).

(C)

Each Lender shall be deemed irrevocably to authorise and instruct the Borrower to apply the redemption monies equal to the SPAC Conversion Amount that is payable to the relevant Lender in subscribing (for the relevant Lender or its Lender Designate, as applicable) for the SPAC Conversion Shares on conversion of the SPAC Conversion Amount and the Borrower shall procure that the SPAC Conversion Shares shall be issued and allotted by the Borrower as fully paid up on the relevant SPAC Conversion Date, and if so required by or deemed necessary or desirable under the law of the Cayman Islands or any other applicable laws, any certificates for such shares shall be dispatched to the persons entitled to them at their own risk.

(D)

The Borrower shall, on the SPAC Conversion Date:

(1)

issue (or procure the issue) to the Lenders (or their Lender Designate(s), as applicable) the number of shares due in accordance with the provisions of this Clause 8 (Conversion);

(2)

execute (or procure the execution of) such documents as may be required in connection with the issue of the shares to the Lenders (or their Lender Designate(s), as applicable); and

(3)

make (or procure the making of by the Transfer Agent) the appropriate entries in the Borrower’s register of members in respect of the issue of shares to the Lenders (or their Lender Designate(s), as applicable).

(E)

The Principal Amount shall automatically be reduced by an amount corresponding to the SPAC Conversion Amount when (but not before): (i) the Lenders (or their Lender Designate(s), as applicable) have been registered in the register of members of the Borrower and all relevant book entries have been completed by the Transfer Agent; and (ii) the Lenders (or their Lender Designate(s) as applicable) shall have received share certificates representing the shareholding of the Lenders if so required or deemed necessary or desirable under the laws of the Cayman Islands or any other applicable law.

8.3	The Lender Designate

The Original Lender hereby designates Eleuthera SPC to receive any SPAC Conversion Shares to which the Original Lender is entitled under this Agreement and references herein to any person designated by a Lender as a Lender Designate for such purposes shall be to Eleuthera SPC in relation to the Original Lender.

8.4	SPAC Lock-up Period

The SPAC Conversion Shares shall be subject to the SPAC Lock-up Period, during which time no Lender (or, if applicable, any Lender Designate) may dispose of any SPAC Conversion Shares or transfer any of its SPAC Conversion Shares. No Lender shall be liable in any way for any breach of the SPAC Lock-up Period or this Clause 8.4 by reason of any failure by another Lender or any Lender Designate to comply with the provisions herein.

8.5	Costs relating to the SPAC Conversion Shares

(A)

Without prejudice to any other provision in this Agreement, all reasonable costs of any professional advisers, all expenses and any taxes and stamp duties incurred in connection with the formation of the Rockley SPAC and/or the creation, allotment and issuance of shares (including notary and other legal fees), including the transfer of shares from a Lender to Eleuthera SPC or any person designated by them, shall be borne by the Borrower.

(B)

To the extent that any Finance Party incurs such costs or expenses or taxes or stamp duties as a result of the formation of the Rockley SPAC and/or the creation, allotment, issuance and/or transfer of shares, the Borrower shall, from time to time, on demand by the Agent, indemnify the Finance Parties on a full indemnity basis against such costs or expenses or taxes together with any VAT thereon incurred.

9.	Interest

9.1	Calculation of interest

Subject to Clause 9.4 (Interest after the Maturity Date), the rate of interest on each Loan for each Interest Period shall be two per cent. per annum, and which shall, prior to the Maturity Date and absent an Event of Default that has occurred, be calculated on the basis of the Principal Amount.

9.2	Payment of interest

The Borrower shall pay accrued interest on each Loan on the last day of each Interest Period.

9.3	Default interest

(A)

Subject to Clause 9.4 (Interest after the Maturity Date), if the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue based on the Outstanding Balance Owed at a rate which is 3 per cent. per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods. Any interest accruing under this Clause 9.3 shall be payable by the Borrower within 3 Business Days of written demand by the Agent.

(B)

Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain due and payable.

9.4	Interest after the Maturity Date

In respect of any amount outstanding under the Facility on the Maturity Date, interest shall no longer accrue at the rates specified in Clauses 9.1 (Calculation of interest) and/or 9.3 (Default interest) and shall thereafter accrue on the overdue amount from the Maturity Date as the due date up to the date of actual payment (both before and after judgment) at a rate which is 25 per cent. per annum.

Any interest accruing under this Clause 9.4 shall be immediately payable by the Borrower on demand by the Agent.

9.5	Notification of rates of interest

The Agent shall promptly notify the relevant Lenders and the Borrower of the determination of a rate of interest under this Agreement.

10.	Interest periods

10.1	Interest Periods

(A)

Subject to Clauses 10.1(B) and 10.1(C) below, each Interest Period will, subject to Clause 10.2 (Changes to Interest Periods), be three Months.

(B)

An Interest Period for a Loan shall not extend beyond the Maturity Date.

(C)

Each Interest Period for a Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period.

10.2	Changes to Interest Periods

(A)

The Agent may shorten the Interest Period for a Loan to ensure that it ends on the same day as another Loan which is outstanding.

(B)

If the Agent makes any change to an Interest Period referred to in this Clause 10.2, it shall promptly notify the Borrower.

10.3	Non-Business Days

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

10.4	Consolidation and division of Loans

If two or more Interest Periods:

(A)

relate to Loans; and

(B)

end on the same date,

those Loans will be consolidated into, and treated as, a single Loan on the last day of the Interest Period.

11.	Tax gross-up and indemnities

11.1	Definitions

(A)

In this Agreement:

“Borrower DTTP Filing” means an H.M. Revenue & Customs’ Form DTTP2 duly completed and filed by the relevant Borrower, which:

(1)

where it relates to a Treaty Lender that is an Original Lender, contains the scheme reference number and jurisdiction of tax residence stated opposite that Lender’s name in Part 2 of Schedule 1 (The Original Parties), and

(a)

where the Borrower is an Original Borrower, is filed with HM Revenue & Customs within 30 days of the date of this Agreement; or

(b)

where the Borrower is an Additional Borrower, is filed with HM Revenue & Customs within 30 days of the date on which that Borrower becomes an Additional Borrower; or

(2)

where it relates to a Treaty Lender that is not an Original Lender, contains the scheme reference number and jurisdiction of tax residence stated in respect of that Lender in the documentation which it executes on becoming a Party as a Lender; and

(a)

where the Borrower is a Borrower as at the date on which that Treaty Lender becomes a Party as a Lender, is filed with HM Revenue & Customs within 30 days of that date; or

(b)

where the Borrower is not a Borrower as at the date on which that Treaty Lender becomes a Party as a Lender, is filed with HM Revenue & Customs within 30 days of the date on which that Borrower becomes an Additional Borrower.

“Form DTTP2” means HM Revenue & Customs Form DTTP2 or such other prescribed form of notification as HM Revenue & Customs specifies from time to time shall be used pursuant to the HMRC DT Treaty Passport scheme.

“Protected Party” means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

“Qualifying Lender” means:

(1)

a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:

(a)

a Lender:

(i)

which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document and is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or

(ii)

in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made and within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or

(b)

a Lender which is:

(i)

a company resident in the United Kingdom for United Kingdom tax purposes;

(ii)

a partnership each member of which is:

(A)

a company so resident in the United Kingdom; or

(B)

a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA;

(iii)

a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or

(c)

a Treaty Lender; or

(2)

a Lender which is a building society (as defined for the purpose of section 880 of the ITA) making an advance under a Finance Document.

“Tax Confirmation” means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:

(1)

a company resident in the United Kingdom for United Kingdom tax purposes;

(2)

a partnership each member of which is:

(a)

a company so resident in the United Kingdom; or

(b)

(3)

“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

“Tax Payment” means either the increase in a payment made by an Obligor to a Finance Party under Clause 11.2 (Tax gross-up) or a payment under Clause 11.3 (Tax indemnity).

“Treaty Lender” means a Lender which:

(1)

is treated as a resident of a Treaty State for the purposes of the Treaty;

(2)

does not carry on a business in the United Kingdom through a permanent establishment with which that Lender’s participation in the Loan is effectively connected.

“Treaty State” means a jurisdiction having a double taxation agreement (a “Treaty”) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest.

“UK Non-Bank Lender” means a lender which is not an Original Lender and which gives a Tax Confirmation in the documentation which it executes on becoming a Party as a Lender.

(B)

Unless a contrary indication appears, in this Clause 11 (Tax gross-up and indemnities) a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

11.2	Tax gross-up

(A)

Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

(B)

The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender (or the Arranger on behalf of the Original Lender) it shall notify the Borrower and that Obligor.

(C)

If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

(D)

A payment shall not be increased under Clause 11.2(C) by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due any of the following apply:

(1)

the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any published practice or published concession of any relevant taxing authority; or

(2)

the relevant Lender is a Qualifying Lender solely by virtue of paragraph (1)(b) of the definition of Qualifying Lender; and:

(a)

an officer of HM Revenue & Customs has given (and not revoked) a direction (a “Direction”) under section 931 of the ITA which relates to the payment and that Lender has received from the Obligor making the payment or from the Borrower a certified copy of that Direction; and

(b)

the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or

(3)

the relevant Lender is a Qualifying Lender solely by virtue of paragraph (1)(b) of the definition of Qualifying Lender and:

(a)

the relevant Lender has not given a Tax Confirmation to the Borrower; and

(b)

the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Borrower, on the basis that the Tax Confirmation would have enabled the Borrower to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA; or

(4)

the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under Clause 11.3 (Tax indemnity) or Clause 11.2(H).

(E)

If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(F)

Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment a statement under section 975 of the ITA or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

(G)

(1)

Subject to Clause 11.2(G)(2) and Clause 11.2(G)(3), a Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.

(2)

Nothing in Clause 11.2(G)(1) shall require a Treaty Lender to:

(a)

(b)

apply the HMRC DT Treaty Passport scheme to any Utilisation if it has so registered.

(3)

(a)

A Treaty Lender which is an Original Lender and that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence opposite its name in Schedule 1 (The Original Parties); and

(b)

a Treaty Lender which is not an Original Lender and that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence in the documentation which it executes on becoming a Party as a Lender, and, having done so, that Lender shall automatically be deemed to have discharged all its obligations and responsibilities pursuant to Clause 11.2(G)(1), subject to Clause 11.2(H)

(H)

If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with Clause 11.2(G)(3):

(1)

such confirmation shall constitute notification by such Lender to the Borrower that the Lender wishes the HMRC DT Treaty Passport scheme to apply to this Agreement and that pursuant to such scheme the Borrower must comply with its obligations under Clause 11.2(H)(2); and

(2)

the Borrower shall, to the extent that such a Lender is a Lender under a Facility made available to the Borrower pursuant to Clause 2.1 (The Facility), file a duly completed Form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the date on which such Lender became a Party as a Lender (and in any event by no later than 30 working days prior to the first date on which a payment of interest falls due under this Agreement).

(I)

If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with paragraph (G)(2) above and a Borrower making a payment to that Lender has made a Borrower DTTP Filing in respect of that Lender but:

(1)

that Borrower DTTP Filing has been rejected by HM Revenue & Customs;

(2)

HM Revenue & Customs has not given the Borrower authority to make payments to that Lender without a Tax Deduction within 30 days of the date of the Borrower DTTP Filing; or

(3)

HM Revenue & Customs has given the Borrower authority to make payments to that Lender without a Tax Deduction but such authority has subsequently been revoked or expired,

and in each case, the Borrower has notified the Agent and that Lender in writing, that Lender and the Borrower shall co-operate in completing any additional procedural formalities necessary for that Borrower to obtain authorisation to make that payment without a Tax Deduction.

(J)

If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with Clause 11.2(G)(3), no Obligor shall make a Borrower DTTP Filing or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that Lender’s Commitment or its participation in any Loan unless the Lender otherwise agrees in writing.

(K)

The Borrower shall, promptly on making a Borrower DTTP Filing, deliver a copy of (i) that Borrower DTTP Filing and (ii) (upon receipt from HMRC) the applicable treaty clearance letter, in each case to the Agent for delivery to the relevant Lender.

(L)

A UK Non-Bank Lender which is an Original Lender gives a Tax Confirmation to the Borrower by entering into this Agreement.

(M)

A UK Non-Bank Lender shall promptly notify the Borrower and the Agent if there is any change in the position from that set out in the Tax Confirmation.

11.3	Tax indemnity

(A)

The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

(B)

Clause 11.3(A) shall not apply:

(1)

with respect to any Tax assessed on a Finance Party:

(a)

under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

(b)

under the law of the jurisdiction in which that Finance Party is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or

(2)

to the extent a loss, liability or cost:

(a)

is compensated for by an increased payment under Clause 11.2 (Tax gross-up);

(b)

would have been compensated for by an increased payment under Clause 11.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in Clause 11.2(C) (Tax gross-up) applied; or

(c)

relates to a FATCA Deduction required to be made by a Party.

(3)

A Protected Party making, or intending to make a claim under Clause 11.3(A) shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower.

(4)

A Protected Party shall, on receiving a payment from an Obligor under this Clause 11.3 (Tax indemnity), notify the Agent.

11.4	Tax Credit

If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

(A)

a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and

(B)

that Finance Party has obtained and utilised that Tax Credit,

the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.

11.5	Lender status confirmation

Each Lender which is not an Original Lender shall indicate, in the documentation which it executes on becoming a Party as a Lender, and for the benefit of the Agent and without liability to any Obligor, which of the following categories it falls in:

(A)

not a Qualifying Lender;

(B)

a Qualifying Lender (other than a Treaty Lender); or

(C)

a Treaty Lender.

If such a Lender fails to indicate its status in accordance with this Clause 11.5 then that Lender shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Agent which category applies (and the Agent, upon receipt of such notification, shall inform the Borrower). For the avoidance of doubt, the documentation which a Lender executes on becoming a Party as a Lender shall not be invalidated by any failure of a Lender to comply with this Clause 11.5.

11.6	Stamp taxes

The Borrower shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

11.7

VAT

(A)

All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to Clause 11.7(B), if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

(B)

If VAT is or becomes chargeable on any supply made by any Finance Party (the “Supplier”) to any other Finance Party (the “Recipient”) under a Finance Document, and any Party other than the Recipient (the “Relevant Party”) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

(1)

(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this Clause 11.7(B)(1) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

(2)

(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

(C)

Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

(D)

Any reference in this Clause 11.7 (VAT) to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to any member of such group which is responsible for accounting for, or paying, VAT on behalf of such group, or on behalf of any or all of the members thereof.

(E)

In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party’s VAT registration and such other information as is reasonably requested in connection with such Finance Party’s VAT reporting requirements in relation to such supply.

11.8	FATCA information

(A)

Subject to Clause 11.8(C), each Party shall, within ten Business Days of a reasonable request by another Party:

(1)

confirm to that other Party whether it is:

(a)

a FATCA Exempt Party; or

(b)

not a FATCA Exempt Party;

(2)

supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA; and

(3)

supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other law, regulation, or exchange of information regime.

(B)

If a Party confirms to another Party pursuant to Clause 11.8(A)(1) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

(C)

Clause 11.8(A) shall not oblige any Finance Party to do anything, and Clause 11.8(A)(3) shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:

(1)

any law or regulation;

(2)

any fiduciary duty; or

(3)

any duty of confidentiality.

(D)

If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with Clause 11.8(A)(1) or Clause 11.8(A)(2) (including, for the avoidance of doubt, where Clause 11.8(C) applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

(E)

If the Borrower is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten Business Days of:

(1)

where the Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of the Original Facility Agreement;

(2)

where the Borrower is a US Tax Obligor on a date on which any other Lender becomes a Party as a Lender, that date; or

(3)

where the Borrower is not a US Tax Obligor, the date of a request from the Agent,

supply to the Agent:

(a)

a withholding certificate on Form W-8, Form W-9 or any other relevant form; or

(b)

any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.

(F)

The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender (or in the case of the Original Lender, the Arranger, acting on its behalf) pursuant to Clause 11.8(E) above to the Borrower.

(G)

If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to Clause 11.8(E) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent). The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrower.

(H)

The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender (or in the case of the Original Lender, the Arranger acting on its behalf) pursuant to Clause 11.8(E) or Clause 11.8(G) above without further verification. The Agent shall not be liable for any action taken by it under or in connection with Clause 11.8(E), Clause 11.8(F) or Clause 11.8(G).

11.9	FATCA Deduction

(A)

Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

(B)

Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Agent and the Agent shall notify the other Finance Parties.

12.	Increased costs

12.1	Increased costs

(A)

Subject to Clause 12.3 (Exceptions) the Borrower shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:

(1)

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation;

(2)

compliance with any law or regulation made after the date of the Original Facility Agreement; or

(3)

the implementation or application of, or compliance with, Basel III or any law or regulation which implements Basel III (including for the avoidance of doubt, CRD IV to the extent that is applies to Basel III) (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

(B)

In this Agreement:

(1)

“Basel III” means:

(a)

the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(b)

the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

(c)

any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.

(2)

“CRD IV” means:

(a)

Regulation (EV) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms as amended by Regulation (EU) 2019/876 of the European Parliament and of the Council of 20 May 2019; and

(b)

Directive 2013/36EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC as amended by Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019.

(3)

“Increased Costs” means:

(a)

a reduction in the rate of return from a Facility or on a Finance Party’s (or its Affiliate’s) overall capital;

(b)

an additional or increased cost; or

(c)

a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

12.2	Increased cost claims

(A)

A Finance Party intending to make a claim pursuant to Clause 12.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.

(B)

Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

12.3	Exceptions

(A)

Clause 12.1 (Increased costs) does not apply to the extent any Increased Cost is:

(1)

attributable to a Tax Deduction required by law to be made by an Obligor;

(2)

attributable to a FATCA Deduction required to be made by a Party;

(3)

compensated for by Clause 11.3 (Tax indemnity) (or would have been compensated for under Clause 11.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in Clause 11.3(B) applied);

(4)

attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.

(B)

In this Clause 12.3, a reference to a “Tax Deduction” has the same meaning given to that term in Clause 1.1 (Definitions).

13.	Other indemnities

13.1	Currency indemnity

(A)

If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

(1)

making or filing a claim or proof against that Obligor;

(2)

obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (i) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (ii) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

(B)

Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

13.2	Other indemnities

The Borrower shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

(A)

the occurrence of any Event of Default;

(B)

a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 30 (Sharing among the Finance Parties);

(C)

funding, or making arrangements to fund, its participation in a Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or

(D)

a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.

13.3	Indemnity to the Agent

The Borrower shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:

(A)

investigating any event which it reasonably believes is a Default;

(B)

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

(C)

instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement.

13.4	Indemnity to the Security Agent

(A)

Each Obligor jointly and severally shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:

(1)

any failure by an Obligor to comply with its obligations under Clause 15 (Costs and expenses);

(2)

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

(3)

the taking, holding, protection or enforcement of the Transaction Security;

(4)

the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;

(5)

any default by an Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or

(6)

acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Secured Assets (otherwise, in each case, than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct).

(B)

The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Secured Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 13.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.

14.	Mitigation by the lenders

14.1	Mitigation

(A)

Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality) or Clause 11 (Tax gross-up and indemnities) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate.

(B)

Clause 14.1(A) does not in any way limit the obligations of any Obligor under the Finance Documents.

14.2	Limitation of liability

(A)

The Borrower shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 14.1 (Mitigation).

(B)

A Finance Party is not obliged to take any steps under Clause 14.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

15.	Costs and expenses

15.1	Transaction expenses

The Borrower shall promptly on demand pay the Agent and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution and syndication of:

(A)

this Agreement and any other documents referred to in this Agreement; and

(B)

any other Finance Documents executed after the date of the Original Facility Agreement.

15.2	Amendment costs

If:

(A)

an Obligor requests an amendment, waiver or consent; or

(B)

an amendment is required pursuant to Clause 31.9 (Change of currency),

the Borrower shall, within three Business Days of demand, reimburse the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.

15.3	Enforcement costs

The Borrower shall, within three Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.

15.4	Structuring expense

The Borrower shall promptly on demand, pay to the Lender in relation to its commitment a compensation for structuring expenses of 0.125 per cent of the Original Facility Amount per annum, due pro rata on each interest payment date (“Structuring Payments”). Upon acceleration of the facility due to Insolvency per Clause 20.5 (Insolvency) (the “Acceleration”), the Borrower pay (within 3 Business Days of written demand) to the Lender in relation to its commitment a structuring payment equal to USD 250,000.00 less the product of 2 and the aggregate sum of all Structuring Payments made until such date of Acceleration.

16.	Guarantee and indemnity

16.1	Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

(A)

guarantees to each Finance Party punctual performance by the Borrower of all the Borrower’s obligations under the Finance Documents;

(B)

undertakes with each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and

(C)

agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 16 (Guarantee and indemnity) if the amount claimed had been recoverable on the basis of a guarantee.

16.2	Continuing guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

16.3	Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 16 (Guarantee and indemnity) will continue or be reinstated as if the discharge, release or arrangement had not occurred.

16.4	Waiver of defences

The obligations of each Guarantor under this Clause 16 (Guarantee and indemnity) will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 16 (Guarantee and indemnity) (without limitation and whether or not known to it or any Finance Party) including:

(A)

any time, waiver or consent granted to, or composition with, any Obligor or other person;

(B)

the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

(C)

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

(D)

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

(E)

any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

(F)

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

(G)

any insolvency or similar proceedings.

16.5	Guarantor Intent

Without prejudice to the generality of Clause 16.4 (Waiver of defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

16.6	Immediate recourse

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 16 (Guarantee and indemnity). This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

16.7	Appropriations

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

(A)

refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

(B)

hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this Clause 16 (Guarantee and indemnity).

16.8	Deferral of Guarantors’ rights

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 16 (Guarantee and indemnity):

(A)

to be indemnified by an Obligor;

(B)

to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;

(C)

to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;

(D)

to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 16.1 (Guarantee and indemnity);

(E)

to exercise any right of set-off against any Obligor; and/or

(F)

to claim or prove as a creditor of any Obligor in competition with any Finance Party.

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 31 (Payment mechanics).

16.9	Release of Guarantors’ right of contribution

If any Guarantor (a “Retiring Guarantor”) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:

(A)

that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and

(B)

each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.

16.10

Additional security

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

16.11

Waiver of defences – California

If and to the extent the laws of the State of California are applied to this Agreement or any of the other Finance Documents, each Guarantor hereby waives the following:

(A)

any rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defences that are or may become available to a guarantor or other surety by reason of California Civil Code Sections 2787 to 2855, inclusive;

(B)

any rights or defences a guarantor or other surety may have in respect of his or her or its obligations as a guarantor or other surety by reason of any election of remedies by a creditor;

(C)

any rights or defences a guarantor or other surety may have because the principal’s note or other obligation is secured by real property or an estate for years including, but not limited to, any rights or defences that are based upon, directly or indirectly, the application of California Code of Civil Procedure Sections 580a, 580b, 580d, or 726 to the principal’s note or other obligation;

(D)

all rights and defences that a guarantor may have because the debtor’s debt is secured by real property such that, among other things:

(1)

the creditor may collect from the guarantor without first foreclosing on any real or personal property collateral pledged by the debtor; or

(2)

if the creditor forecloses on any real property collateral pledged by the debtor:

(a)

the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price;

(b)

the creditor may collect from the guarantor even if the creditor, by foreclosing on the real property collateral, has destroyed any right the guarantor may have to collect from the debtor.

This is an unconditional and irrevocable waiver of any rights and defences the guarantor may have because the debtor’s debt is secured by real property. These rights and defences include, but are not limited to, any rights or defences based upon Sections 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.; and

(E)

all rights and defences arising out of an election of remedies by a creditor, even though that election of remedies, such as a non-judicial foreclosure with respect to security for a guaranteed obligation, has destroyed the guarantor’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise.

17.	Representations

Each Obligor makes the representations and warranties set out in this Clause 17 to each Finance Party on the date of this Agreement.

17.1	Status

(A)

It is a corporation, duly incorporated and validly existing under:

(1)

the laws of the Cayman Islands, in the case of the Borrower;

(2)

the laws of England and Wales, in the case of the English Obligor; and

(3)

the laws of Delaware, US, in the case of the US Obligor.

(B)

It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.

17.2	Binding obligations

The obligations expressed to be assumed by it in each Finance Document are, subject to any general principles of law limiting its obligations which are specifically referred to in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation) or Clause 22 (Assignment and Transfer by the Borrower), the Legal Reservations and Perfection Requirements, legal, valid, binding and enforceable obligations.

17.3	Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not and will not:

(A)

conflict with any law or regulation applicable to it;

(B)

conflict with its or any of its Subsidiaries’ constitutional documents;

(C)

conflict with any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries’ assets; or

(D)

result in the creation or imposition of (or enforceability of) any Security on the whole or any part of its undertaking or assets pursuant to the provisions of any agreement or documents other than the Security Agreement.

17.4	Power and authority

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents.

17.5	Validity and admissibility in evidence

All Authorisations required or desirable:

(A)

to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party; and

(B)

to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation,

have been obtained or effected and are in full force and effect.

17.6	Solvency

Each Obligor is able to pay its debts (including trade debts) as they fall due.

17.7	Purpose of Credit Extensions

The Original Borrower shall apply (and the Borrower shall assume the application of) each Loan in accordance with Clause 3 (Purpose).

17.8	No winding-up

No Obligor has taken any corporate or other action nor has any application been made or have any other steps been taken or legal proceedings been started or (to the best of each Obligor’s knowledge and belief having made due and proper enquiry) threatened against an Obligor or any of its Subsidiaries or for their winding-up or for the appointment of a trustee, liquidator, receiver, administrative receiver, administrator or similar officer of them or of any or all of their assets.

17.9	Deduction of Tax

In the case of the Borrower only, it is not required to make any Tax Deduction (as defined in Clause 1.1 (Definitions)) from any payment it may make under any Finance Document to a Lender which is:

(A)

a Qualifying Lender:

(1)

falling within paragraph (1)(a) of the definition of “Qualifying Lender”; or

(2)

except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, falling within paragraph (1)(b) of the definition of “Qualifying Lender”; or

(3)

falling within paragraph (2) of the definition of “Qualifying Lender” or;

(B)

a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488).

17.10

No filing or stamp taxes

Save for any registration of the Transaction Security Documents at Companies House under the Companies Act 2006, under the law of its Relevant Tax Jurisdiction it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.

17.11

No default

(A)

No Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation.

(B)

No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its or any of its Subsidiaries’ assets are subject which might have a Material Adverse Effect.

17.12

No misleading information

To the best of the Borrower’s knowledge (after making due and reasonable inquiries), no written representation, warranty or other statement of any Obligor in any certificate or written statement given to the Agent, on the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to the Agent, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognised by the Agent that the projections and forecasts provided by an Obligor in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

17.13

Financial statements

(A)

Its Original Financial Statements were prepared in accordance with IFRS¹ consistently applied.

(B)

Its Original Financial Statements fairly present its financial condition as at the end of the relevant financial year and its results of operations during the relevant financial year.

(C)

There has been no change in its business or financial condition since the Closing Date that is reasonably likely to cause a Material Adverse Effect.

¹	To be confirmed by Rockley.

17.14

Pari passu ranking

Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

17.15

No proceedings

(A)

No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect has or have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.

(B)

No judgment or order of a court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief) been made against it or any of its Subsidiaries.

17.16

Taxation

(A)

It is not (and none of its Subsidiaries is) overdue in the filing of any Tax returns and it is not (and none of its Subsidiaries is) overdue in the payment of any material amount in respect of Tax.

(B)

No claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any of its Subsidiaries) with respect to Taxes.

(C)

It is resident for Tax purposes only in the jurisdiction of its incorporation.

17.17

Intellectual Property rights

(A)

The Borrower is the sole legal and beneficial owner of (except for non-exclusive licences granted to its customers in the ordinary course of business), or has licensed to it on normal commercial terms, all of its Material Intellectual Property.

(B)

All Intellectual Property owned by any Subsidiary of the Borrower has been duly assigned to the Borrower.

(C)

All registered Material Intellectual Property owned by the Borrower is valid and enforceable, and no part of the Borrower’s Material Intellectual Property has been judged invalid or unenforceable.

(D)

The Borrower has taken all formal or procedural actions (including payment of fees) required to maintain any registered Material Intellectual Property owned by it.

(E)

The Borrower is not aware of any current, pending or threatened challenge or objection which has or might cause a Material Adverse Effect by any third party to the use by it of any Material Intellectual Property, or infringement of any of its Material Intellectual Property by any third party.

17.18

[RESERVED]

17.19

No undisclosed Security Interest

No Security (other than as permitted under this Agreement) exists over any of the present or future assets of the Obligors.

17.20

Forecasts and projections

All forecasts and projections supplied by or on behalf of an Obligor to the Agent were carefully prepared and believed by the Obligor to be not misleading at the date on which they were provided.

17.21

Other circumstances

No Obligor is aware of any facts or circumstances that have not been disclosed to the Finance Parties which might reasonably be likely to cause a Material Adverse Effect.

17.22

Jurisdiction

The Borrower has its centre of main interest in England and Wales for the purposes of the Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings.

17.23

Sanctions

No member of the Group, no Affiliate of any member of the Group and no director, manager, officer or employee of any of the foregoing:

(A)

is a Restricted Party;

(B)

has, to the knowledge of the Borrower, engaged in any dealings or transactions with a Restricted Party; or

(C)

has, to the knowledge of the Borrower, received notice of any action, suit, proceeding or investigation against it with respect to Sanctions.

17.24

Anti-corruption law

(A)

No member of the Group or (to the best of the Borrower’s knowledge and belief after due and careful inquiry) director and officer of the Borrower or member of the Group has engaged in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws or regulations in any applicable jurisdiction.

(B)

Each member of the Group has instituted and maintained policies and procedures designed to promote and achieve compliance with applicable anti-bribery, anticorruption and anti-money laundering laws and regulations.

17.25

Shares

The Borrower represents and warrants to the Lenders that on the date hereof:

(A)

the Borrower’s issued share capital is, at the date of this Agreement, 1 ordinary share of US$0.00001;

(B)

all of the Borrower’s issued share capital is fully paid and is free and clear from any encumbrances; and

(C)

save in respect of any right of pre-emption, neither the constitutional documents of the Borrower nor any agreement or instrument to which the Borrower is a party or by which the Borrower may be bound, restrict or inhibit any issuance, or transfer upon creation, of the shares subject to the SPAC Conversion (including pursuant to any discretion granted to the board of directors of the Borrower permitting them to refuse to register any such transfer).

17.26

Regulatory compliance

The US Obligor represents that it is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. The US Obligor is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the US Federal Reserve Board of Governors). The US Obligor has complied in all material respects with the US Federal Fair Labor Standards Act. The US Obligor has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a material adverse effect on its business. None of the US Obligor’s or any of its Subsidiaries’ properties or assets has been used by the US Obligor or any Subsidiary or, to the best of the US Obligor’s knowledge, by previous persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. The US Obligor and each of its Subsidiaries have obtained all consents, approvals and authorisations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.

17.27

Repetition

The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on the date of each Utilisation Request, on the First Effective Date, on the Second Effective Date and on the first day of each Interest Period.

18.	Information undertakings

The undertakings in this Clause 18 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

In this Clause 18:

“Annual Financial Statements” means the financial statements for a Financial Year delivered pursuant to paragraph (B) of Clause 18.1 (Financial statements, reports and certificates).

“Monthly Financial Statements” means the financial statements for a Month delivered pursuant to paragraph (A) of Clause 18.1 (Financial statements, reports and certificates).

“Quarterly Financial Statements” means the financial statements for a financial quarter delivered pursuant to paragraph (C) of Clause 18.1 (Financial statements, reports and certificates).

18.1	Financial statements, reports and certificates

The Borrower shall supply to the Agent and the Arranger:

(A)

as soon as the same become available, but no later than 30 days after the end of month, a company prepared consolidated and consolidating Monthly Financial Statements including at least balance sheet, income statement and cash flow statement covering the Borrower’s and each Subsidiary’s operations for such month certified by a Responsible Officer and in a form acceptable to the Agent and the Arranger;

(B)

as soon as the same become available, but no later than 180 days after the last day of the Borrower’s financial year, audited consolidated Annual Financial Statements prepared under US GAAP, consistently applied, with an unqualified opinion (or qualified only to the extent that the Agent regards such qualification as not being material, in its reasonable opinion) on the financial statements from an independent firm of chartered accountants reasonably acceptable to the Agent and the Arranger;

(C)

within 45 days after the last day of each financial quarter, a company prepared Quarterly Financial Statements balance sheet, income statement and cash flow statement covering the Borrower’s and each Subsidiary’s operations for such quarter, detailed information in key performance indicators, certified by a Responsible Officer and in a form acceptable to the Agent and the Arranger;

(D)

within 45 days after the last day of each quarter, a duly completed Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such quarter, the Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting out calculations showing compliance with the financial covenants set out in this Agreement and such other information as the Agent and/or the Arranger shall reasonably request;

(E)

a prompt report of any legal actions pending or threatened in writing against the Borrower or any of its Subsidiaries that could result in damages or costs the Borrower or any Subsidiary of, individually or in the aggregate, £250,000 (or its equivalent in any other currency) or more;

(F)

on the last Business Day of February and August (commencing in February 2021), details of any newly registered Intellectual Property held by it or any of its Affiliates or any changes to any registered Intellectual Property held by it or any of its Affiliates;

(G)

as soon as available but no later than 45 days after the last day of each quarter the Borrower’s board approved progress update and Quarterly Financial Statements;

(H)

as soon as available but no later than 45 days after the last day of each quarter a confirmation by the Borrower that no assets of the Borrower, any Obligor or any direct or indirect subsidiary of the Borrower have been pledged other than to the Security Agent pursuant to this Agreement (or as otherwise permitted in this Agreement);

(I)

within five Business Days of delivery, copies of all statements, reports and notices made available to the Borrower’s security holders or to their shareholders (in their capacity as shareholders);

(J)

on the last day of each quarter the details of any new Material Company; and

(K)

budgets, sales projections, operating plans and other financial information reasonably requested by the Agent and/ or the Arranger.

18.2	Requirements as to financial statements

(A)

Each relevant Obligor shall procure that each set of Annual Financial Statements includes a balance sheet, profit and loss account and cashflow statement. In addition, the Obligors’ Agent shall procure that each set of Annual Financial Statements of the Borrower shall be audited by the auditors.

(B)

Each set of financial statements delivered pursuant to Clause 18.1 (Financial statements, reports and certificates):

(1)

shall be certified by a director of the Obligors’ Agent on behalf of the relevant Obligor as giving a true and fair view of (in the case of Annual Financial Statements for any Financial Year), or fairly representing (in other cases), its financial condition and operations as at the date as at which those financial statements were drawn up; and

(2)

shall be prepared in accordance with US GAAP.

(C)

If the Agent and/or the Arranger wishes to discuss the financial position of any member of the Group with the auditors of that member of the Group, the Agent and/or the Arranger may notify the Borrower, stating the questions or issues which the Agent and/or the Arranger wishes to discuss with those auditors. In this event, the Obligors must ensure that those auditors are authorised (at the expense of the Borrower):

(1)

to discuss the financial position of the relevant member of the Group with the Agent and/or the Arranger (as applicable) on request, and upon reasonably prior notice, from the Agent or the Arranger (as applicable); and

(2)

to disclose to the Agent for the Finance Parties and/or the Arranger any information which the Agent and/or the Arranger (as applicable) may reasonably request.

18.3	Year-end

No Obligor shall change (and the Borrower shall ensure that no member of the Group changes) its Accounting Reference Date without the prior written consent of the Agent (such consent not to be unreasonably withheld or delayed). “Accounting Reference Date” means 31 December.

18.4	Budgets

(A)

The Borrower shall supply to the Agent in sufficient copies for all the Lenders, as soon as the same become available but in any event within 45 days after the start of each of its Financial Years, an annual budget for that financial year (the “Budget”).

(B)

The Borrower shall ensure that each Budget for a financial year:

(1)

is prepared on a consolidated basis;

(2)

is in a form reasonably acceptable to the Agent and includes:

(a)

a projected consolidated profit and loss, balance sheet and consolidated cashflow statement for the Group; and

(b)

a capex plan,

for that Financial Year;

(3)

is prepared in accordance with US GAAP and the accounting practices and financial reference periods applied to financial statements under Clause 18.1 (Financial statements, reports and certificates); and

(4)

has been approved by the board of directors of the Borrower.

(5)

If the Borrower updates or changes the Budget (or if any changes to the Budget are proposed to be discussed by the board of directors of the Borrower), it shall promptly deliver to the Agent, in sufficient copies for each of the Lenders, such updated or changed Budget (or details of such proposed change) together with a written explanation of the main changes made or proposed to be made in that Budget.

18.5	Valuation

The Agent may, at any time after the occurrence of an Event of Default which is continuing, by notice in writing to the Obligors, instruct a valuer to make a valuation of any Secured Assets. The Obligors shall pay all the costs of any such valuation. The Obligors shall give the valuer all such assistance as it may reasonably require to carry out any such valuation (including the provision of such information as the valuer may reasonably require) and shall allow it free access to such Secured Assets during business hours on the valuer giving reasonable prior notice that a valuation is to be carried out.

18.6	Inventory

(A)

The Obligors shall keep all Inventory in good and marketable condition, free from material defects to the extent any such material defects have or are reasonably likely to have a Material Adverse Effect. Returns and allowances between the Obligors and their Account Debtors shall follow the Obligor’s customary practices as updated from time to time.

(B)

Each Obligor must promptly notify the Agent of all returns, recoveries, disputes and claims of more than £250,000 in each case.

18.7	Annual auditors call

(A)

Each Obligor shall (and the Borrower shall ensure that each member of the Group requested by the Agent shall), within 10 Business Days’ of a request by a Lender, and on no less than five Business Days’ prior notice to the Agent, the Arranger and the Obligors’ Agent, hold a call (no more frequently than once every twelve months) during business hours in London which is available to the Agent, the Arranger and the Lenders to discuss an agenda proposed by the Agent and/or the Arranger.

(B)

If the Agent and/or the Arranger wishes to discuss the financial position of any member of the Group with the auditors of that member of the Group, the Agent and/or the Arranger may notify the Borrower, stating the questions or issues which the Agent and/or Arranger wishes to discuss with those auditors. In this event, the Borrower must ensure that those auditors are authorised (at the expense of the Borrower):

(1)

to discuss the financial position of the relevant member of the Group with the Agent and/or Arranger on request from the Agent and/or the Arranger; and

(2)

to disclose to the Agent for the Lenders and/or the Arranger any information which the Agent or the Arranger (as applicable) may reasonably request.

(C)

Notwithstanding any other term of this Agreement no Event of Default shall occur, or be deemed to occur as a result of any restriction on the identity of the Borrower’s auditors contained in this Agreement being prohibited, unlawful, ineffective, invalid or unenforceable pursuant to applicable laws.

18.8	Board Observer

(A)

The Original Borrower and the Borrower (from the First Effective Date only) shall procure that, at all times from and including the Closing Date (or the First Effective Date, in the case of the Borrower) until and excluding the First Effective Date in the case of the Original Borrower or the SPAC Listing Date in the case of the Borrower (each, the “Relevant Time”), a representative of the Agent or the Original Lender (or the Arranger acting on its behalf), or Eleuthera SPC (the “Board Observer”) shall be entitled to attend each Board Meeting on behalf of the Lenders on the condition that the Board Observer shall attend Board Meetings as an observer only and shall not:

(1)

have any rights or liabilities in relation to the direction or conduct of any management of any member of the Group as a result of attending Board Meetings; or

(B)

be entitled to vote at, or count in the quorum for, any Board Meeting. At all times during the Relevant Time, the Borrower and/or Original Borrower (as the case may be) shall procure that the Board Observer is given notice of Board Meetings:

(1)

as soon as reasonably practicable;

(2)

no later than the time that notice of the relevant Board Meeting is given to members of the board of directors of the Borrower generally;

(3)

no later than the time that notice of the relevant Board Meeting is required to be given pursuant to the constitutional documents of the Borrower; and

(4)

in any event, no later than 10 Business Days prior to the relevant Board Meeting (unless the Chairman of the Board of Directors reasonably deems it important for the commercial interest of the Borrower to convene the Board Meeting earlier than this).

(C)

At all times during the Relevant Time, the Borrower (or the Original Borrower, prior to the First Effective Date) shall procure that the Board Observer is supplied with a copy of all relevant board papers which are dispatched to members of the board of directors of the Borrower for the purposes of a Board Meeting generally at the same time as they are dispatched to those members of the board of directors of the Borrower (or the Original Borrower, as the case may be).

(D)

The Agent, the Original Lender (or the Arranger acting on its behalf) or Eleuthera SPC agree that as a condition to their representative acting as a Board Observer, such person shall undertake to cooperate with the Borrower and fulfil any and all necessary formalities requested by the competent authorities or by applicable laws, as well as comply with any applicable laws, in each case as the same apply to their role as a Board Observer, in all cases during the Relevant Time only.

(E)

Notwithstanding the foregoing, where the Borrower’s (or Original Borrower’s) board of directors resolve, acting reasonably and in good faith, that a matter to be discussed gives rise to an actual bona fide conflict of interest between the Lenders and the Borrower (or, prior to the First Effective Date, the Original Borrower), the Board Observer may be excluded from the part of the meeting (and from the distribution list for any such associated written materials) where the matter giving rise to such conflict of interest is discussed, in all cases during the Relevant Time only.

(F)

Notwithstanding any other term in this Clause 18.8 (Board Observer), on and from the SPAC Listing Date, if the Parties are unable to obtain the necessary information pursuant to the terms of this Agreement and/or agree any suitable additional information rights (whether by way of an amendment to the existing information covenants herein or otherwise), then the Borrower shall, at any time on or following the SPAC Listing Date, absent any such agreement or access to the relevant information above, grant the Arranger the right to perform an audit at any time upon request which will include providing the Arranger with access to the Borrower’s premises and the right to inspecting the Borrower’s board minutes and books. The Arranger may at its discretion refrain from exercising the information and audit rights if the Arranger acting in its sole discretion believes that such information or audit may provide it with material non-public information affecting the ability of the Lender Designate to sell the SPAC Conversion Shares.

(G)

In this Clause 18.8 (Board Observer), “Board Meeting” means any meeting of:

(1)

the board of directors; or

(2)

any committee of the board of directors,

of the Borrower or the Original Borrower which is held on or after the Closing Date.

18.9	Notification of default

(A)

Each Obligor shall notify the Agent and the Arranger of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).

(B)

Promptly upon a request by the Agent and/or the Arranger, the Borrower shall supply to the Agent and/or the Arranger a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

18.10

“Know your customer” checks

(A)

If:

(1)

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(2)

any change in the status of an Obligor or the addition or resignation of an Obligor in respect of this Agreement, or the composition of the shareholders of or control of any Obligor after the date of this Agreement; or

(3)

a proposed assignment or transfer by any Lender of any of its rights and obligations under this Agreement,

obliges any Lender, the Agent or the Security Agent (or, in the case of Clause 18.10(A)(3), any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, such Obligors shall promptly upon the request of the Agent, Security Agent or any Lender (or the Arranger, on behalf of the Original Lender) supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender or the Security Agent) or any Lender (for itself or, in the case of the event described in Clause 18.10(A)(3), on behalf of any prospective new Lender) in order for the Agent, Security Agent, such Lender or, in the case of the event described in Clause 18.10(A)(3), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

(B)

Each Lender or the Arranger (as the case may be) shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

19.	General undertakings

The undertakings in this Clause 19 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

19.1	Authorisations

Each Obligor shall promptly:

(A)

obtain, comply with and do all that is necessary to maintain in full force and effect; and

(B)

supply certified copies to the Agent of,

any Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.

19.2	Compliance with laws

Each Obligor comply in all respects with all laws to which it may be subject, if failure so to comply would materially impair its ability to perform its obligations under the Finance Documents.

19.3	Negative pledge

(A)

No Obligor shall (and the Borrower shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.

(B)

No Obligor shall (and the Borrower shall ensure that no other member of the Group will):

(1)

sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;

(2)

sell, transfer or otherwise dispose of any of its receivables on recourse terms;

(3)

enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

(4)

enter into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

(C)

Clause 19.3(A) and Clause 19.3(B) do not apply to any Security or (as the case may be) Quasi-Security, listed below:

(1)

any cash collateral arrangements securing ancillary banking services;

(2)

any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances of members of the Group but only so long as (i) such arrangement does not permit credit balances of Obligors to be netted or set off against debit balances of members of the Group which are not Obligors and (ii) such arrangement does not give rise to other Security over the assets of Obligors in support of liabilities of members of the Group which are not Obligors;

(3)

any payment or close out netting or set-off arrangement pursuant to any derivative transaction or foreign exchange transaction entered into by a member of the Group which is permitted under Clause 19.5 (Financial Indebtedness), excluding any Security or Quasi-Security under a credit support arrangement;

(4)

any Security or Quasi-Security existing on the date of this Agreement which is approved by the Agent in writing and Security or Quasi-Security arising under the Finance Documents;

(5)

any Security or Quasi-Security for taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and for which any Obligor maintains adequate reserves on its books;

(6)

purchase money Security or Quasi-Security on (i) Equipment acquired or held by any Obligor incurred for financing the acquisition of the Equipment securing no more than £50,000 in aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Security or Quasi-Security is confined to the property and improvements and the proceeds of the Equipment;

(7)

any leases or sub-leases and non-exclusive licences or sub-licences granted in the ordinary course of any Obligor’s business, if the leases, sub-leases, licences and sub-licences permit granting the Security Agent Security or Quasi-Security;

(8)

any Security created pursuant to a charge over deposit dated 10 July 2020 between Silicon Valley Bank and the Borrower;

(9)

any Security or Quasi-Security incurred in the extension, renewal or refinancing of the indebtedness secured by any Security or Quasi-Security in paragraphs (1) to (7) above, provided that any extension, renewal or replacement Security or Quasi-Security shall be limited to the property encumbered by the existing Security or Quasi-Security and the principal amount of such indebtedness shall not increase; or

(10)

any lien arising by operation of law and in the ordinary course of trading;

(11)

any Security or Quasi-Security granted with the prior written consent of the Agent.

19.4	Disposals

(A)

No Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.

(B)

Clause 19.4(A) does not apply to any sale, lease, transfer or other disposal:

(1)

which is a Non-Qualified Trade Sale;

(2)

of Inventory and cash in the ordinary course of business;

(3)

Cash Equivalents for other Cash Equivalents or cash;

(4)

of Intellectual Property where:

(a)

the board of directors of the Borrower consider it in the best interests of the Borrower to do so and, in respect of Material Intellectual Property, have given 10 Business Days’ notice to the Agent; and

(b)

such disposal is on arms-length, on bona fide commercial terms and made to an unrelated third party;

(5)

of Intellectual Property where the same is being licenced in the ordinary course of business on arms-length and bona fide commercial terms to an unrelated third party;

(6)

of assets in exchange for other assets comparable or superior as to type, value and quality (other than an exchange of a non-cash asset for cash);

(7)

of worn out obsolete or redundant Equipment; or

(8)

in connection with anything permitted pursuant to Clause 19.3(C) and Clause 19.5(B).

19.5	Financial Indebtedness

(A)

No Obligor shall (and the Borrower shall ensure that no other member of the Group will) create, incur, assume, or be liable for any Financial Indebtedness.

(B)

Clause 19.5(A) does not apply to:

(1)

SVB credit card facilities and other ancillary facilities up to a maximum of £500,000 or its equivalent in other currencies (in aggregate);

(2)

$2,859,824 made available to the US Obligor under the US Paycheck Protection Program;

(3)

the Obligor’s Financial Indebtedness to the Finance Parties under the Finance Documents;

(4)

Financial Indebtedness of the Original Borrower created under the Intra-Group Loan Note Instrument up to a maximum aggregate amount of up to an amount equivalent to the product of the Original Facility Amount and the SPAC Conversion Multiple, and provided that:

(a)

such Financial Indebtedness:

(i)

is owed to the Borrower;

(ii)

is at all times contractually subordinated in right of payment to amounts owing under the Facility Agreement; and

(iii)

has a specified maturity falling after and is repaid or prepaid only after amounts owing under the Facility Agreement have been repaid or prepaid in full;

(b)

no payment in relation to such Financial Indebtedness is permitted until all amounts owing under the Facility Agreement have been paid and discharged in full;

(c)

the Borrower’s rights in respect of such Financial Indebtedness is subject to valid Transaction Security created pursuant to the Intra-Group Loan Note Charge; and

(d)

any other terms of the Intra-Group Loan Note Instrument not specified in this item (4) are satisfactory in form and substance to the Arranger (acting reasonably);

(5)

Financial Indebtedness in respect of rent deposits up to a maximum aggregate amount of £250,000 (or its equivalent in other currencies);

(6)

Financial Indebtedness existing on the date of this Agreement that the Agent has previously approved in writing;

(7)

unsecured Financial Indebtedness subordinated to the obligations due to the Finance Parties hereunder on terms satisfactory to the Agent and the Arranger (each acting reasonably);

(8)

unsecured Financial Indebtedness to trade creditors incurred in the ordinary course of business;

(9)

Financial Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;

(10)

Financial Indebtedness arising under a foreign exchange transaction for spot or forward delivery entered into in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary course of trade, but not a foreign exchange transaction for investment or speculative purposes;

(11)

Financial Indebtedness arising under any derivative transaction entered into for the hedging of actual or projected real exposures arising in the ordinary course of trading activities of a member of the Group for a period of not more than 12 months and not for speculative purposes;

(12)

of any person acquired by a member of the Group after the Closing Date which is incurred under arrangements in existence at the date of acquisition, but not incurred or increased or having its maturity date extended in contemplation of, or since, that acquisition, and outstanding only for a period of 3 months following the date of acquisition;

(13)

under Finance Leases;

(14)

under any other finance or capital leases (other than Finance Leases) of vehicles, plant, equipment or computers, provided that the aggregate capital value of all such items so leased under outstanding leases by members of the Group does not exceed £500,000 (or its equivalent in other currencies) at any time;

(15)

not permitted by the preceding paragraphs and the outstanding principal amount of which does not exceed £500,000 (or its equivalent) in aggregate for the Group at any time; and

(16)

extensions, refinancings, modifications, amendments and restatements of any items of Financial Indebtedness set out in paragraphs (1) to (9) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon any Obligor or any Subsidiary, as the case may be.

19.6	Distributions

No Obligor shall pay any dividends or make any distribution or payment or redeem, or purchase any of its share capital save in accordance with arrangements previously agreed in writing by the Agent, or any dividends or distributions paid or made by a Subsidiary of an Obligor to such Obligor.

19.7	Repayments

No Obligor shall pay any interest or principal owed in respect of any outstanding Financial Indebtedness (other than Financial Indebtedness created pursuant to the Finance Documents) save in accordance with arrangements previously agreed in writing by the Agent.

19.8	[Reserved]

19.9	Taxation

(A)

Each Obligor shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(1)

such payment is being contested in good faith;

(2)

adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 18.1 (Financial statements); and

(3)

such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

(B)

No Obligor may change its residence for Tax purposes.

19.10

Merger

(A)

No Obligor shall (and the Borrower shall ensure that no other member of the Group will), enter into any amalgamation, demerger, merger or corporate reconstruction where such Obligor is not the surviving legal entity.

(B)

Clause 19.10(A) does not apply to: (i) a Permitted Flotation; (i) any Qualified Exit; or (ii) any sale, lease, transfer or other disposal permitted pursuant to Clause 19.4 (Disposals).

19.11

Change of business

Each Obligor shall (and shall ensure that each of its Subsidiaries) procure that no substantial change is made to the general nature of the business of each Obligor, as applicable, from that carried on at the date of this Agreement.

19.12

Change of ownership or management

No Obligor shall:

(A)

permit a change in the ownership or control of any Subsidiary of the Borrower without the written consent of the Agent, save in respect of a Qualified Exit, or a Permitted Flotation, the Rockley SPAC Merger, the formation of the Rockley SPAC or the Rockley Share Exchange; or

(B)

without at least 30 days prior written notice to the Agent:

(1)

change its jurisdiction of organisation; or

(2)

change its legal structure or type; or

(3)

change its legal name.

19.13

Government compliance

(A)

Each Obligor shall maintain its, and all of its Subsidiaries’, legal existence and good standing in their jurisdictions of formation and maintain its existence in each jurisdiction in which the failure to do so would reasonably be expected to cause a Material Adverse Effect. Each Obligor shall comply, and shall procure that each of its Subsidiaries complies, with all laws, ordinances and regulations to which it is subject, the non-compliance with which could reasonably be expected to cause a Material Adverse Effect.

(B)

Each Obligor shall obtain all of the Governmental Approvals necessary (if any) for the performance by such Obligor of its obligations under the Loan Documents to which it is a party and the grant of a security interest to the Security Agent in all of its property.

(C)

Each Obligor shall promptly on written request provide copies of any Governmental Approvals to the Agent.

19.14

Tax and pensions

Each Obligor shall make, and cause each of its Subsidiaries to make, timely payment of all material Tax or assessments (other than Tax and assessments which such Obligor is contesting in good faith, with adequate reserves maintained in accordance with US GAAP) and will deliver to the Agent, on demand, appropriate certificates attesting to such payments and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.

19.15

Insurance

(A)

Each Obligor shall keep its business and the Secured Assets insured for risks and in amounts standard for companies in such Obligor’s industry and location and as the Agent may reasonably request.

(B)

If an Obligor receives any proceeds under any insurance policy it shall notify the Agent and the Agent in writing of any such payment.

(C)

Following an Event of Default which is continuing, proceeds payable under any asset protection insurance policy taken out by or otherwise vested in an Obligor shall, at the Agent’s option, be payable to the Agent on account of the obligations of the Obligors under the Finance Documents.

19.16

Covenants in relation to shares

(A)

The Borrower shall do all such things and do all such acts and shall execute all such documents (whether notarial or otherwise) to the extent necessary or appropriate to:

(1)

ensure at all relevant times that its authorised share capital is sufficient to allow for the allotment and issue of all shares required to give effect to the SPAC Conversion;

(2)

grant and give effect to the SPAC Conversion in accordance with the terms of this Agreement including, without limitation, despatching free of charge to the persons entitled thereto within 28 days of the SPAC Conversion Date certificates for the shares issued under the SPAC Conversion (should this be a requirement or be deemed necessary to give effect to, or validate the SPAC Conversion under any applicable laws);

(3)

effect the SPAC Conversion by the Lenders;

(4)

facilitate and give effect to any transfer of shares hereunder by the Lenders or if applicable, any Lender Designate(s); and

(5)

prior to the SPAC Conversion Date and subject to the provisions of Clause 21 (Changes to the Lenders), facilitate the assignment of all rights and benefits of the Lenders under this Agreement or the transfer of all rights, benefits and obligations of the Lenders under this Agreement, in each case as they relate to the SPAC Conversion.

(B)

The Borrower shall not in respect of any shares subject to the SPAC Conversion and, until such time as the SPAC Conversion Shares are issued to the Lender s (and/or their Lender Designate(s), as applicable) pursuant to Clause 8 (Conversion) and the SPAC Conversion is completed:

(1)

grant or cooperate to grant options, warrants, rights of conversion or other arrangements to any person or persons, in respect of any shares allotted or issued in connection with Clause 8 (Conversion) (and in all cases above, arising other than in respect of the SPAC Conversion itself);

(2)

change or cooperate to change any rights attaching to any of the shares, other than pursuant to the SPAC Conversion granted to the Lenders pursuant to Clause 8 (Conversion);

(3)

other than in respect of any pledge of shares created in favour of the Lenders, pledge or encumber or cooperate to pledge or encumber the shares,

and shall ensure that any share pre-emption rights then applying are either disapplied or waived in full in respect of the SPAC Conversion Shares.

(C)

The Borrower shall notify the Agent in writing without delay regarding any action matter or thing which if done would result in a breach of Clause 8 (Conversion) or if it becomes aware that any such action, matter or thing has been done; and

(D)

The Borrower shall notify the Agent in writing without delay if any matter becomes known to it which is inconsistent with any of the representations given in Clause 17.25 (Shares).

19.17

Material Intellectual Property

Each Obligor shall:

(A)

protect, defend and maintain the subsistence, validity and enforceability of the Material Intellectual Property;

(B)

promptly advise the Agent in writing of material infringements of its Material Intellectual Property;

(C)

use reasonable endeavours to prevent any infringement in any material respect of its Material Intellectual Property;

(D)

make registrations and pay all registration fees and taxes necessary to maintain its Material Intellectual Property in full force and effect and record its interest in that Material Intellectual Property;

(E)

not use or permit its Material Intellectual Property to be used in a way or take any step or omit to take any step in respect of that Material Intellectual Property which may materially and adversely affect the existence or value of its Material Intellectual Property or imperil its right to use such property;

(F)

not allow any Material Intellectual Property to be abandoned, forfeited, dedicated to the public or encumbered without the Agent’s written consent; and

(G)

not allow any of its Affiliates to register any Material Intellectual Property without procuring that such Affiliate enters in such intellectual property security agreements and other documents and take such other actions as the Agent shall request in its good faith business judgement to perfect and maintain a first priority perfected Security in favour of the Security Agent in such property, including without limitation assignment of such Material Intellectual Property to the Borrower.

19.18

Financial assistance

The proceeds of any Loan will not be utilised or assumed by the Borrower for any purpose which could constitute unlawful financial assistance within the meaning of sections 678 or 679 of the Companies Act 2006.

19.19

Transactions with Affiliates

Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of an Obligor, except for transactions that are in the ordinary course of an Obligor’s business, upon fair and reasonable terms that are no less favourable to the Borrower than would be obtained in an arm’s length transaction with a person who is not an Affiliate of an Obligor.

19.20

Subsidiary Restrictions

(A)

The Obligors shall not in any 12 month period from the date of this Agreement downstream any funds or provide any financial assistance to any Subsidiary (that is not itself also an Obligor) in excess of $6,000,000 or its equivalent in any other currency (in aggregate).

(B)

The Obligors shall ensure that at all times the maximum amount of Cash and Cash Equivalents held by the Subsidiaries of any Obligor (that is not itself also an Obligor) shall be $500,000 or its equivalent in any other currency (in aggregate).

19.21

With the exception of a Permitted Flotation, the Borrower shall not seek to list or implement listing of its shares on any public trading venue. Furthermore, the Borrower shall ensure that none of its direct and indirect Subsidiaries seek or implement listing of their respective shares on any public trading venue.

19.22

Anti-corruption law and Sanctions

(A)

Each Obligor shall (and the Borrower shall ensure that each other member of the Group will):

(1)

conduct its businesses in compliance with applicable anti-bribery, anti-money laundering and anti-corruption laws and regulations and Sanctions; and

(2)

maintain policies and procedures designed to promote and achieve compliance with such laws and regulations and Sanctions;

(3)

ensure that no revenue or benefit derived directly or, to the best of its knowledge having made due and careful enquiry, indirectly from any activity or dealing with a Restricted Party is used in discharging any obligation due or owing to any Finance Party under the Finance Documents; and

(4)

not engage in any conduct which could reasonably be expected to cause it to:

(a)

be in breach of any Sanctions, the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions; or

(b)

become a Restricted Party.

Each Obligor shall ensure (and the Borrower shall procure that each member of the Group shall ensure) that no Utilisation or the proceeds thereof are directly or, to the best of its knowledge having made due and careful enquiry, indirectly used, lent, paid to, contributed or otherwise made available:

(5)

to fund, finance or for the purposes of any trade, business, transaction or other activities involving, related to or for the benefit of any Restricted Party or any country which is the subject of Sanctions or which is otherwise prohibited by Sanctions; or

(6)

in any manner that results or could reasonably be expected to result in the Borrower, any member of the Group or any Finance Party:

(a)

being in breach of any Sanctions, the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions; or

(b)

becoming a Restricted Party.

19.23

Amendment to articles of association

(A)

By no later than the date on which the initial conditions precedent are satisfied pursuant to Clause 4.1(a) the Borrower shall amend its standing terms of reference applicable to meetings of the Borrower’s board of directors (including any sub committee of directors) to provide that any proposal to create Security or Quasi-Security over any asset of any member of the Group, other than as expressly permitted pursuant to this Agreement, shall require consent in advance by the Security Agent, with such provision remaining in force until the irrevocable repayment in full and cancellation of this Agreement.

(B)

The Borrower shall ensure that such terms set out in paragraph (A) above are set out in writing and a copy certified by a director as a true copy of the terms of reference is delivered to the Security Agent.

19.24

SPAC Lock-Up Period

(A)

The Borrower shall procure that all investors in the Borrower that have invested a principal amount equal to or greater than USD8,000,000 prior to the Flotation of the Rockley SPAC shall be subjected to a lock-up restriction (to the extent they receive shares in the Borrower) and that no such lock-up restriction is shorter than or ends prior to a date falling 90 days from the last day of the SPAC Lock-up Period.

(B)

The Borrower shall, promptly and as soon as reasonably practicable after it has reached an agreement or understanding with respect to any applicable lock-up restrictions, notify the Arranger and the Agent of any applicable lock-up restriction for any investor pursuant to clause 19.24(A) above including all details in respect of the applicable lock-up restriction as may be reasonably requested by the Arranger and the Agent.

19.25

Minimum Cash Balance

The Borrower shall ensure that it shall, at all times, maintain a cash balance of at least USD35,000,000 (or its equivalent in any other currencies) in accounts held in its name.

20.	Events of default

Each of the events or circumstances set out in this Clause 20 is an Event of Default (save for Clause 20.15 (Acceleration) or Clause 20.16 (Acceleration upon an Insolvency Event)).

20.1	Non-payment

Any Obligor does not pay on the due date any:

(A)

payment of principal or interest payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:

(1)

its failure to pay is caused by:

(a)

administrative or technical error; or

(b)

a Disruption Event; and

(2)

payment is made within three Business Days of its due date; or

(B)

payment of any other amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless payment is made within five Business Days of its due date for repayments and payments which are not due on the applicable Maturity Date or Repayment Date.

20.2	Other obligations

(A)

Any Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 20.1 (Non-payment)).

(B)

Any Obligor does not comply with Clause 19.3 (Negative Pledge) or any negative pledge covenant contained in any Finance Document.

(C)

No Event of Default under Clause 20.2(A) will occur if the failure to comply is capable of remedy and is remedied within 10 Business Days of the occurrence of such Default.

20.3	Misrepresentation

(A)

Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of an Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

(B)

No Event of Default under Clause 20.3(A) will occur if the underlying circumstance giving rise to the misrepresentation is capable of remedy and is remedied within 15 Business Days of an Obligor becoming aware of such circumstance or the Agent giving written notice of the same to an Obligor.

20.4	Cross default

(A)

Any Financial Indebtedness of any Obligor is not paid when due nor within any originally applicable grace period.

(B)

Any Financial Indebtedness of any Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

(C)

Any commitment for any Financial Indebtedness of any Obligor is cancelled or suspended by a creditor of an Obligor as a result of an event of default (however described).

(D)

Any creditor of any Obligor becomes entitled to declare any Financial Indebtedness of such Obligor due and payable prior to its specified maturity as a result of an event of default (however described).

(E)

No Event of Default will occur under this Clause 20.4 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within Clauses 20.4(A) to 20.4(D) is less than £250,000 (or its equivalent in any other currency or currencies).

20.5	Insolvency

(A)

Any Obligor:

(1)

is unable or admits inability to pay its debts as they fall due;

(2)

suspends making payments on any of its debts; or

(3)

by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling any of its indebtedness.

(B)

A moratorium is declared in respect of any indebtedness of any Obligor.

20.6	Insolvency proceedings

Any corporate action, legal proceedings or other procedure or step is taken in relation to:

(A)

the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Obligor;

(B)

a meeting of the shareholders, directors or other officers of any Obligor is convened for the purpose of considering any resolution for, to petition for or to make an application to or to file documents with a court or any registrar for, its winding-up, administration or dissolution or any such resolution is passed;

(C)

a composition, compromise, assignment or arrangement with any creditor of any Obligor;

(D)

the appointment of a liquidator (other than in respect of a solvent liquidation of any Obligor), receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any Obligor or any of its assets;

(E)

in respect of the US Obligor: any proceeding is issued under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganisation, arrangement, or other relief; or

(F)

enforcement of any Security over any assets of any Obligor,

or any analogous procedure or step is taken in any jurisdiction (together, referred to herein as the “Insolvency Proceedings”).

This Clause 20.6 shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 21 days of commencement.

20.7	Creditors’ process

(A)

Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of an Obligor or any of its Subsidiaries’ assets and is not discharged within 15 Business Days.

(B)

The service of proceedings upon an Obligor or any of its Subsidiaries seeking to attach, by trustee or similar process, any funds of an Obligor or any of its Subsidiaries’ on deposit with the Lender, or any entity under control of the Finance Parties (including any of its Subsidiaries).

(C)

An Obligor or any of its Subsidiaries is the subject of an injunction, restrained, or prevented by court order from conducting a material part of its business.

(D)

A judgment or other claim becomes a lien on a material portion of the assets of an Obligor or any of its Subsidiaries.

(E)

A notice of lien, levy, or assessment is filed against an asset of an Obligor or any of its Subsidiaries by any government department or agency including HM Revenue & Customs and not paid within 20 Business Days after an Obligor or Subsidiary (as the case may be) receives notice.

(F)

The occurrence of any of the events in paragraph (A) to paragraph (E) will not be an Event of Default if stayed or if a bond is posted pending appeal by an Obligor or Subsidiary (as appropriate) (but no Loans shall be made during the grace period).

20.8	Unlawfulness

(A)

Subject to the Legal Reservations and the Perfection Requirements, it is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents.

(B)

This Agreement ceases to be in full force and effect.

20.9	Repudiation

An Obligor repudiates a Finance Document or evidences an intention to repudiate a Finance Document.

20.10

Judgments

If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least £250,000 or its equivalent in any other currency (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against an Obligor and shall remain unsatisfied and unstayed for a period of 20 days (provided that no Loans will be made prior to the satisfaction or stay of such judgment).

20.11

Governmental Approvals

(A)

Any Governmental Approval has been revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term where such revocation, recession or suspension has or could reasonably be expected to cause a Material Adverse Effect; or

(B)

subject to any decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any of such Governmental Approval or that could result in the Governmental Authority taking any of the actions described in paragraph (A) above, and such decision or such revocation, rescission, suspension, modification or non-renewal:

(1)

is, or could reasonably be expected to be, a Material Adverse Effect; or

(2)

adversely affects the legal qualifications of an Obligor to hold such Governmental Approval in any applicable jurisdiction and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to cause a Material Adverse Effect.

20.12

Validity of agreement

Subject to the Legal Reservations and the Perfection Requirements, at any time any act, condition or thing required to be done, fulfilled or performed by it in order to:

(A)

enable an Obligor lawfully to enter into, exercise their rights under or perform the obligations expressed to be assumed by them in the Finance Documents to which it is a party;

(B)

ensure that the obligations expressed to be assumed by an Obligor in the Finance Documents to which it is a party are legal, valid and binding save for any registration at Companies House under the Companies Act 2006; or

(C)

make the Finance Documents to which it is a party admissible in evidence in England and Wales,

is not done, fulfilled or performed within any time available to ensure compliance with the same and such omission could reasonably be expected to cause a Material Adverse Effect.

20.13

Cessation of business

An Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.

20.14

Conversion of Loans

Any failure by the Borrower to issue when due, fully paid-up shares in sufficient amount in the name of a Lender (or, if applicable any Lender Designate) as provided for in this Agreement in connection with any SPAC Conversion Date.

20.15

Acceleration

On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower:

(A)

cancel the Total Commitments whereupon they shall immediately be cancelled;

(B)

other than in respect of an Event of Default arising under Clause 20.5 (Insolvency) or 20.6 (Insolvency Proceedings), declare that all or part of the Outstanding Balance Owed under the Facility and other Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or

(C)

other than in respect of an Event of Default arising under Clause 20.5 (Insolvency) or 20.6 (Insolvency Proceedings), declare that all or part of the Outstanding Balance Owed under the Facility be payable on demand, whereupon they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or

(D)

exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

20.16

Acceleration upon an Insolvency Event

Upon the exercise of any rights under Clause 20.15 (Acceleration) as a result of an Event of Default arising under Clause 20.5 (Insolvency) or 20.6 (Insolvency Proceedings), the Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower, declare that an amount equal to: (A) the product of 125 per cent. of the Principal Amount, plus (B) any interest accrued, shall become immediately due and payable.

21.	Changes to the lenders

21.1	Assignments and transfers by the Lenders

Subject to this Clause 21, a Lender (the “Existing Lender”) may:

(A)

assign any of its rights; or

(B)

transfer by novation any of its rights and obligations,

under any Finance Document to another person (the “New Lender”).

21.2	Conditions of assignment or transfer

(A)

The consent of the Borrower is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is:

(1)

to another Lender or an Affiliate of a Lender;

(2)

to Eleuthera SPC;

(3)

if the Existing Lender is a fund, to a fund which is a Related Fund of the Existing Lender; or

(4)

made at a time when an Event of Default is continuing.

(B)

The consent of the Borrower to an assignment or transfer must not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent ten Business Days after the Existing Lender has requested it in writing unless consent is expressly refused by the Borrower within that time.

(C)

An assignment will only be effective on:

(1)

receipt by the Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties and the other Secured Parties as it would have been under if it was an Original Lender; and

(2)

performance by the Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender.

(D)

A transfer will only be effective if the procedure set out in Clause 21.5 (Procedure for transfer) is complied with.

(E)

If:

(1)

a Lender assigns or transfers any of its rights or obligations under the Finance Documents; and

(2)

as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender under Clauses 11.2 (Tax gross-up), 11.3 (Tax indemnity) or Clause 12 (Increased Costs),

then the New Lender is only entitled to receive payment under those Clauses to the same extent as the Existing Lender would have been if the assignment, transfer or change had not occurred.

(F)

Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

21.3	Assignment or transfer fee

Unless the Agent otherwise agrees, the New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of $2,500, save that any such fee shall not apply to any transfer from Eleuthera SPC to the Original Lender or the other way round.

21.4	Limitation of responsibility of Existing Lenders

(A)

Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

(1)

the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

(2)

it’s or any other person’s financial condition;

(3)

the performance and observance by its or any other person of its obligations under the Finance Documents or any other documents; or

(4)

the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

(B)

Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

(1)

has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and

(2)

will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

(C)

Nothing in any Finance Document obliges an Existing Lender to:

(1)

accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 21 (Changes to the lenders); or

(2)

support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by it or any other person of its obligations under the Finance Documents or otherwise.

21.5	Procedure for transfer

(A)

Subject to the conditions set out in Clause 21.2 (Conditions of assignment or transfer), a transfer is effected in accordance with Clause 21.5(C) when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 21.5(B), as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.

(B)

The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

(C)

Subject to Clause 21.9 (Pro rata interest settlement), on the Transfer Date:

(1)

to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the “Discharged Rights and Obligations”);

(2)

each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

(3)

the Agent, the Security Agent, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and

(4)

the New Lender shall become a Party as a “Lender”.

21.6	Procedure for assignment

(A)

Subject to the conditions set out Clause 21.2 (Conditions of assignment or transfer), an assignment may be effected in accordance with Clause 21.6(C) when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 21.6(B), as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.

(B)

The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

(C)

On the Transfer Date:

(1)

the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Assignment Agreement;

(2)

the Existing Lender will be released by each Obligor and the other Finance Parties from the obligations owed by it (the “Relevant Obligations”) and expressed to be the subject of the release in the Assignment Agreement; and

(3)

the New Lender shall become a Party as a “Lender” and will be bound by obligations equivalent to the Relevant Obligations.

(D)

Lenders may utilise procedures other than those set out in this Clause 21.6 to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with Clause 21.5 (Procedure for transfer), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in and Clause 21.2 (Conditions of assignment or transfer).

21.7	Copy of Transfer Certificate or Assignment Agreement to the Borrower

The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or Assignment Agreement send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.

21.8	Security over Lenders’ rights

In addition to the other rights provided to Lenders under this Clause 21 (Changes to the lenders), each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

(A)

any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and

(B)

in the case of any Lender or SPV Lender, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities comprised in any Funding Source,

except that no such charge, assignment or Security shall:

(1)

release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or

(2)

require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

21.9	Pro rata interest settlement

If the Agent has notified the Lenders that it is able to distribute interest payments on a “pro rata basis” to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 21.5 (Procedure for transfer) or any assignment pursuant to Clause 21.5 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

(A)

any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (“Accrued Amounts”) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and

(B)

the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

(1)

when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(2)

the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 21.9, have been payable to it on that date, but after deduction of the Accrued Amounts.

21.10

Prohibition on Loan Exposure Transactions

No Obligor may enter into any Loan Exposure Transaction.

22.	Changes to the obligors

No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

23.	Additional borrowers

23.1	Subject to compliance with the provisions of Clause 18.10 (“Know your customer” checks), the Agent may request that any member of the Group or a Material Company becomes a Borrower. That member of the Group or Material Company (as the case may be) shall become a Borrower if:

(A)

the Majority Lenders and the Agent approve the addition of that member of the Group or that Material Company as a Borrower;

(B)

the Obligors’ Agent and that member of the Group or Material Company (as the case may be) delivers to the Agent a duly completed and executed Accession Deed;

(C)

the Obligors’ Agent confirms that no Default is continuing or would occur as a result of that Material Company or that member of the Group becoming an Additional Borrower; and

(D)

the Agent has received such Security and other documents and evidence as it may reasonably request (in form and substance similar to the items provided by the Obligors pursuant to Part II and if applicable, Part 3 of Schedule 2 (Conditions precedent)), each in form and substance satisfactory to the Agent.

23.2	The Agent shall notify the Obligors’ Agent and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II and if applicable, Part 3 of Schedule 2 (Conditions precedent)

23.3

Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in paragraph 23.2 above, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

24.	Resignation of a borrower

24.1	With the prior consent of all the Lenders, the Obligors’ Agent may request that a Borrower ceases to be a Borrower by delivering to the Agent a Resignation Letter.

24.2	The Agent shall accept a Resignation Letter and notify the Obligors’ Agent and the other Finance Parties of its acceptance if:

(A)

the Obligors’ Agent has confirmed that no Default is continuing or would result from the acceptance of the Resignation Letter;

(B)

the Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents; and

(C)

where the Borrower is also a Guarantor, its obligations in its capacity as Guarantor continue to be legal, valid, binding and enforceable and in full force and effect (subject to the Legal Reservations) and the amount guaranteed by it as a Guarantor is not decreased (and the Obligors’ Agent has confirmed this is the case).

24.3	Upon notification by the Agent to the Obligors’ Agent of its acceptance of the resignation of a Borrower, that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents as a Borrower.

24.4

The Agent may, at the cost and expense of the Obligors’ Agent, require a legal opinion from counsel to the Agent confirming the matters set out in Clause 24.2 above and the Agent shall be under no obligation to accept a Resignation Letter until it has obtained such opinion in form and substance satisfactory to it.

25.	Additional guarantors

25.1	Subject to compliance with the provisions of Clause 18.10 (“Know your customer” checks), the Obligors’ Agent may request that it or any of its wholly owned Subsidiaries become a Guarantor.

25.2

The Obligors’ Agent shall ensure that each member of the Group identified in Part 3 of Schedule 2 (Conditions precedent) as an Additional Obligor shall become an Additional Guarantor and shall grant the Transaction Security identified opposite the name of that member of the Group in Part 3 of Schedule 2 (Conditions precedent) on or prior to the date specified in Part 3 of that Schedule.

25.3	The Obligors’ Agent shall procure that any other member of the Group which is a Material Company shall, as soon as possible after becoming a Material Company become an Additional Guarantor and grant Security as the Agent may require.

25.4	A member of the Group shall become an Additional Guarantor if:

(A)

the Obligors’ Agent and the proposed Additional Guarantor deliver to the Agent a duly completed and executed Accession Deed; and

(B)

the Agent has received all of the documents and other evidence listed in Part 2 and, if applicable, Part 3 of Schedule 2 (Conditions precedent) in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent.

25.5	The Agent shall notify the Obligors’ Agent and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part 2 and, if applicable, Part 3 of Schedule 2 (Conditions precedent).

25.6

Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in paragraph 25.5 above, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

26.	Repetition of representations

Delivery of an Accession Deed constitutes confirmation by the relevant Subsidiary that the representations and warranties referred to in Clause 17.27 (Repetition) are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.

27.	Resignation and release of security

If a Borrower ceases to be a Borrower or is proposed to be resigning as a Borrower, then:

(A)

where that Borrower has created Transaction Security over any of its assets or business in favour of the Security Agent, or Transaction Security in favour of the Security Agent was created over the shares (or equivalent) of that Borrower, the Security Agent may, at the cost and request of the Obligors’ Agent, release those assets, business or shares (or equivalent) and issue certificates of non-crystallisation; and

(B)

any resignation of that Borrower and related release of Transaction Security referred to in paragraph (A) above shall become effective only on the Borrower ceasing to be a Borrower in accordance with Clause 23 (Resignation of a Borrower).

28.	Role of the agent and the arranger

28.1	Appointment of the Agent

(A)

Each of the Lenders and the Arranger appoints the Agent to act as its agent under and in connection with the Finance Documents.

(B)

Each of the Lenders and the Arranger authorises the Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

28.2	Appointment of the Arranger as agent of the Original Lender

(A)

Subject to paragraph (C) below, Argentum Securities Ireland plc as Original Lender by its execution of this Agreement hereby confirms that it has appointed the Arranger (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Finance Documents and authorises:

(1)

the Arranger on its behalf to supply all information concerning itself contemplated by this Agreement to the other Finance Parties and the Obligors and to give all notices and instructions, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by the Original Lender notwithstanding that they may affect the Original Lender, without further reference to or the consent of the Original Lender; and

(2)

each Finance Party and any Obligor to give any notice, demand or other communication to that Original Lender pursuant to the Finance Documents to the Arranger,

and in each case the Original Lender shall be bound as though the Original Lender itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

(B)

Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Arranger or given to the Arranger under any Finance Document on behalf of an Obligor or other Finance Party in connection with any Finance Document shall be binding for all purposes on the Original Lender as if that Original Lender had expressly made, given or concurred with it.

(C)

Argentum Securities Ireland plc as Original Lender may at any time revoke the authority of the Arranger and upon giving notice thereof to the Obligors and the other Finance Parties, the authorisations referred to in this Clause 28.2 shall immediately cease to be in effect and no Obligor nor any Finance Party may continue thereafter to rely or act on such authorisations.

28.3	Instructions

(A)

The Agent shall:

(1)

unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by:

(a)

all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

(b)

in all other cases, the Majority Lenders; and

(2)

not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with Clause 28.3(A)(1).

(B)

The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion. The Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

(C)

Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

(D)

The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.

(E)

In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

(F)

The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.

28.4	Duties of the Agent

(A)

The Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

(B)

Subject to Clause 28.4(C), the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

(C)

Without prejudice to Clause 21.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), Clause 28.4(B) shall not apply to any Transfer Certificate or Assignment Agreement.

(D)

Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

(E)

If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

(F)

If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent) under this Agreement it shall promptly notify the other Finance Parties.

(G)

The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

28.5	No fiduciary duties

(A)

Nothing in any Finance Document constitutes the Agent or the Arranger as a trustee or fiduciary of any other person.

(B)

Neither of the Agent or the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

28.6	Business with the Obligors

The Agent may accept deposits from, lend money to and generally engage in any kind of banking or other business with the Obligors.

28.7	Rights and discretions

(A)

The Agent may:

(1)

rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(2)

assume that:

(a)

any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and

(b)

unless it has received notice of revocation, that those instructions have not been revoked; and

(3)

rely on a certificate from any person:

(a)

as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

(b)

to the effect that such person approves of any particular dealing, transaction, step, action or thing,

as sufficient evidence that that is the case and, in the case of Clause 28.7(A), may assume the truth and accuracy of that certificate.

(B)

The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

(1)

no Default has occurred (unless it has actual knowledge of a Default arising under Clause 20.1 (Non-payment)); and

(2)

any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised.

(C)

The Agent may engage, and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

(D)

Without prejudice to the generality of Clause 28.7(C) or Clause 28.7(E), the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be necessary.

(E)

The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

(F)

The Agent may act in relation to the Finance Documents through its officers, employees and agents.

(G)

Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

(H)

Notwithstanding any other provision of any Finance Document to the contrary, the Agent is obliged to do or omit to do anything if it would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

(I)

Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

28.8	Responsibility for documentation

Neither the Agent or the Arranger is responsible or liable for:

(A)

the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, any Obligor or any other person in or in connection with any Finance Document or the Information Memorandum or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

(B)

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or

(C)

any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

28.9	No duty to monitor

Neither the Agent nor the Arranger shall be bound to enquire:

(A)

whether or not any Default has occurred;

(B)

as to the performance, default or any breach by any Party of its obligations under any Finance Document; or

(C)

whether any other event specified in any Finance Document has occurred.

28.10

Exclusion of liability

(A)

Without limiting Clause 28.10(B) (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent or the Arranger), neither the Agent nor the Arranger will be liable for:

(1)

any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking for any action under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct;

(2)

exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document, other than by reason of its gross negligence or wilful misconduct; or

(3)

without prejudice to the generality of Clause 28.10(A)(1) and 28.10(A)(2), any damages, costs or losses to any person, any diminution in value or any liability whatsoever but not including any claim based on the fraud of the Agent or the Arranger (as applicable) arising as a result of:

(a)

any act, event or circumstance not reasonably within its control; or

(b)

the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

(B)

No Party (other than the Agent or the Arranger (as applicable)) may take any proceedings against any officer, employee or agent of the Agent or the Arranger (as applicable) in respect of any claim it might have against the Agent or the Arranger (as applicable) or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent or the Arranger (as applicable) may rely on this Clause subject to Clause 1.4 (Third party rights) and the provisions of the Third Parties Act.

(C)

Neither the Agent nor the Arranger will be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent or the Arranger if the Agent or the Arranger has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent or the Arranger for that purpose.

(D)

Nothing in this Agreement shall oblige the Agent or the Arranger to carry out:

(1)

any “know your customer” or other checks in relation to any person; or

(2)

any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender or for any Affiliate of any Lender,

on behalf of any Lender and each Lender confirms to the Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arranger.

(E)

Without prejudice to any provision of any Finance Document excluding or limiting the Agent or the Arranger’s liability, any liability of the Agent or the Arranger arising under or in connection with any Finance Document shall be limited to the amount of actual loss which has been suffered (as determined by reference to the date of default of the Agent or the Arranger or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent or the Arranger be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent or the Arranger has been advised of the possibility of such loss or damages.

28.11

Lenders’ indemnity to the Agent

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document).

28.12

Resignation of the Agent

(A)

The Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the Lenders and the Borrower.

(B)

Alternatively the Agent may resign by giving 30 days’ notice to the Lenders and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Agent.

(C)

If the Majority Lenders have not appointed a successor Agent in accordance with Clause 28.12(B) within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Borrower) may appoint a successor Agent (acting through an office in the United Kingdom).

(D)

If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under Clause 28.12(C), the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent and the Borrower amendments to this Clause 28.12 (Resignation of the Agent) and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees and those amendments will bind the Parties.

(E)

The retiring Agent shall make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. The Borrower shall, within three Business Days of demand, reimburse the retiring Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.

(F)

The Agent’s resignation notice shall only take effect upon the appointment of a successor.

(G)

Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 28.12(E)) but shall remain entitled to the benefit of Clause 13.3 (Indemnity to the Agent) and this Clause 28.12 (Resignation of the Agent) (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

(H)

After consultation with the Borrower, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with Clause 28.12(A). In this event, the Agent shall resign in accordance with Clause 28.12(A).

(I)

The Agent shall resign in accordance with Clause 28.12(A) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to Clause 28.12(B)) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:

(1)

the Agent fails to respond to a request under Clause 11.8 (FATCA Information) and a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

(2)

the information supplied by the Agent pursuant to Clause 11.8 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

(3)

the Agent notifies the Borrower and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and that Lender, by notice to the Agent, requires it to resign.

28.13

Confidentiality

(A)

In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

(B)

If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

28.14

Relationship with the Lenders

(A)

Subject to Clause 21.9 (Pro rata interest settlement), the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent’s principal office as notified to the Finance Parties from time to time) as the Lender:

(1)

entitled to or liable for any payment due under any Finance Document on that day; and

(2)

entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five Business Days’ prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

(B)

Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address and (where communication by electronic mail or other electronic means is permitted under Clause 33.5 (Electronic communication)) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause 33.2 (Addresses) and Clause 33.5 (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

28.15

Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

(A)

the financial condition, status and nature of each Obligor;

(B)

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

(C)

whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

(D)

the adequacy, accuracy or completeness of the Information Memorandum and any other information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.

28.16

Deduction from amounts payable by the Agent

If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

29.	Conduct of business by the finance parties

No provision of this Agreement will:

(A)

interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

(B)

oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

(C)

oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

30.	Sharing among the finance parties

30.1	Payments to Finance Parties

If a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from an Obligor other than in accordance with Clause 31 (Payment mechanics) (a “Recovered Amount”) and applies that amount to a payment due under the Finance Documents then:

(A)

the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery to the Agent;

(B)

the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 31 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and belong

(C)

the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 31.5 (Partial payments).

30.2	Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the “Sharing Finance Parties”) in accordance with Clause 31.5 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.

30.3	Recovering Finance Party’s rights

On a distribution by the Agent under Clause 30.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.

30.4	Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

(A)

each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the “Redistributed Amount”); and

(B)

as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

30.5	Exceptions

(A)

This Clause 30 (Sharing among the finance parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.

(B)

A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(1)

it notified that other Finance Party of the legal or arbitration proceedings; and

(2)

that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

31.	Payment mechanics

31.1	Payments to the Agent

(A)

On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

(B)

Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Agent, in each case, specifies.

31.2	Distributions by the Agent

Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 31.3 (Distributions to an Obligor) and Clause 31.4 (Clawback and pre-funding) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender), to such account as that Party may notify to the Agent by not less than five Business Days’ notice with a bank specified by that Party in the principal financial centre of the country of that currency.

31.3	Distributions to an Obligor

The Agent may (with the consent of the Obligor or in accordance with Clause 32 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

31.4	Clawback and pre-funding

(A)

Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

(B)

Unless Clause 31.4(C) applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

(C)

If the Agent has notified the Lenders that it is willing to make available amounts for the account of a Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to a Borrower:

(1)

the Agent shall notify the Borrower of that Lender’s identity and the Borrower to whom that sum was made available shall on demand refund it to the Agent; and

(2)

the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower to whom that sum was made available, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

31.5	Partial payments

(A)

If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:

(1)

first, in or towards payment pro rata of any unpaid amount owing to the Agent under the Finance Documents;

(2)

secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;

(3)

thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and

(4)

fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

(B)

The Agent shall, if so directed by the Majority Lenders, vary the order set out in Clauses 31.5(A)(2) to 31.5(A)(4).

(C)

Clause 31.5(A) and Clause 31.5(B) will override any appropriation made by an Obligor.

31.6	No set-off by Obligors

All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

31.7	Business Days

(A)

Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

(B)

During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

31.8	Currency of account

(A)

Subject to Clause 31.8(B) and Clause 31.8(C), dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.

(B)

Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

(C)

Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

31.9	Change of currency

(A)

Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

(1)

any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrower); and

(2)

any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).

(B)

If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Market and otherwise to reflect the change in currency.

32.	Set-off

A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

33.	Notices

33.1	Communications in writing

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by email or letter.

33.2	Addresses

The address and email (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

(A)

in the case of the Borrower, that identified with its name below;

(B)

in the case of each Lender or any other Obligor, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and

(C)

in the case of the Agent, that identified with its name below,

(D)

in the case of the Arranger, that identified with its name below,

or any substitute address or email or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days’ notice.

33.3	Delivery

(A)

Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

(1)

if by way of email, in accordance with Clause 33.5 (Electronic Communication); or

(2)

if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

and, if a particular department or officer is specified as part of its address details provided under Clause 33.2 (Addresses), if addressed to that department or officer.

(B)

Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent’s signature below (or any substitute department or officer as the Agent shall specify for this purpose).

(C)

All notices from or to an Obligor shall be sent through the Agent.

(D)

Any communication or document which becomes effective, in accordance with Clauses 33.3(A) to 33.3(C), after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

33.4	Notification of address and email

Promptly upon changing its address or email address, the Agent shall notify the other Parties.

33.5	Electronic communication

(A)

Any email communication made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any email made by a Party to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

(B)

Any email which becomes effective, in accordance with Clause 33.5(A) above, after 5:00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.

(C)

Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 33.5.

33.6	English language

(A)

Any notice given under or in connection with any Finance Document must be in English.

(B)

All other documents provided under or in connection with any Finance Document must be:

(1)

in English; or

(2)

if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

34.	Calculations and certificates

34.1	Accounts

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

34.2	Certificates and Determinations

Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

34.3	Outstanding Balance Owed

The Outstanding Balance Owed at any point in time shall be calculated on a day to day basis by adding the Accreted Principal to: (i) any interest accrued pursuant to the terms of this Agreement; (ii) any overdue cash payments calculated in accordance with the compounded default interest rate specified under Clause 9.3 (Default Interest) of this Agreement; and (iii) any costs, expenses or other payments due to a Finance Party (or in the case of the Security Agent, due to any Receiver or Delegate) under Clause 15 (Costs and Expenses) of this Agreement.

34.4	Day count convention

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

35.	Partial invalidity

If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

36.	Remedies and waivers

No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document. No election to affirm any Finance Document on the part of any Finance Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.

37.	Amendments and waivers

37.1	Required consents

(A)

Subject to Clause 37.2 (All Lender matters) and Clause 37.3 (Other exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.

(B)

The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 37.

(C)

Clause 21.9 (Pro rata interest settlement) shall apply to this Clause 37.

37.2	All Lender matters

An amendment or waiver of any term of any Finance Document that has the effect of changing or which relates to:

(A)

the definition of “Majority Lenders” in Clause 1.1 (Definitions);

(B)

an extension to the date of payment of any amount under the Finance Documents;

(C)

a reduction or change of a Multiple or a reduction in the amount of any payment of principal, interest, fees or commission payable;

(D)

a change to any term of the Intra-Group Loan Note Instrument (other than any minor and/or administrative changes);

(E)

a change in currency of payment of any amount under the Finance Documents;

(F)

an increase in any Commitment, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facility;

(G)

any provision which expressly requires the consent of all the Lenders; and

(H)

Clause 2.3 (Finance Parties’ rights and obligations), Clause 5.1 (Delivery of a Utilisation Request), Clause 7.1 (Illegality), Clause 6 (Repayment) to Clause 8 (Conversion) (inclusive), Clause 21 (Changes to the Lenders), Clause 22 (Changes to the Obligors) this Clause 37.2, Clause 42 (Governing law), Clause 43.1 (Jurisdiction), or Schedule 10 (Pricing),

shall not be made without the prior consent of all the Lenders.

37.3	Other exceptions

An amendment or waiver which relates to the rights or obligations of the Agent or the Arranger may not be effected without the consent of the Agent or the Arranger.

38.	Confidential information

38.1	Confidentiality

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 38.2 (Disclosure of Confidential Information), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

38.2	Disclosure of Confidential Information

Any Finance Party may disclose:

(A)

to any of its Affiliates, Related Funds, to any Funding Source, the investors of the noteholders of any Lender and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 38.2(A) is informed

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in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

(B)

to any person:

(1)

to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent and, in each case, to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;

(2)

with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents or one or more Obligors and to any of that person’s Affiliates, Related Funds, Representatives, investors (direct or indirect) and professional advisers;

(3)

appointed by any Finance Party or by a person to whom Clause 38.2(B)(1) or Clause 38.2(B)(2) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under Clause 28.14(B) (Relationship with the Lenders)), unless such person is a Finance Party;

(4)

who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 38.2(B)(1) or Clause 38.2(B)(2);

(5)

to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

(6)

to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;

(7)

to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 21.8 (Security over Lenders’ rights);

(8)

to whom Secured Assets may be assigned or transferred to following the occurrence of an Event of Default which is continuing;

(9)

who is a Party; or

(10)

with the consent of the Borrower,

in each case, such Confidential Information as that Finance Party shall consider appropriate if:

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(a)

(without prejudice to Clause 33.2(A)) in relation to Clause 38.2(B)(1), Clause 38.2(B)(2), Clause 38.2(B)(3), Clause 38.2(B)(4), Clause 38.2(B)(8) and, other than in connection with any charge, assignment or other Security to secure obligations to a federal reserve or central bank, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is SPV Lender or a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

(b)

in relation to Clause 38.2(B)(5), Clause 38.2(B)(6) and Clause 38.2(B)(7), the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances; and

(C)

to any Sanctions Authority (or to any regulatory authority or similar body which has been given relevant authority by a Sanctions Authority) such Confidential Information as that Finance Party shall consider necessary in order to obtain a licence in relation to any Sanctions applicable to that Finance Party’s rights and obligations under any Finance Document;

(D)

to any person appointed by that Finance Party or by a person to whom Clause 38.2(B)(1) or Clause 38.2(B)(2) applies to provide administration, trust, agency or settlement services in respect of one or more of the Finance Documents (or any financing transaction relating thereto) including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause 38.2(D) if the service provider to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform, if, in the opinion of that Finance Party, it is not practicable to do so in the circumstances;

(E)

to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information; and

(F)

information regarding any event or circumstance under, or in connection with, this Agreement and any other Finance Document which (on its own or when considered together with any other relevant events or circumstances) may, in the reasonable determination of such Finance Party, constitute a Credit Event (as defined in the 2014 ISDA Credit Derivatives Definitions as published by the International Swaps and Derivatives Association, Inc. and as may be supplemented, amended or superseded from time to time) for the purposes of a credit derivatives transaction referencing the Obligors (or, if applicable, its successor(s) for the purposes of such credit derivatives transactions).

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38.3	Swiss banking secrecy

The Obligors grant to Credit Suisse AG an unconditional waiver regarding Swiss bank-client confidentiality law and obligations in respect of all information related to this Agreement and any of the Finance Documents.

38.4	Entire agreement

This Clause 38 (Confidential information) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

38.5	Inside information

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

38.6	Notification of disclosure

Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:

(A)

of the circumstances of any disclosure of Confidential Information made pursuant to Clause 38.2(B)(5) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of its supervisory or regulatory function; and

(B)

upon becoming aware that Confidential Information has been disclosed in breach of this Clause 38.

38.7	Continuing obligations

The obligations in this Clause 38 (Confidential information) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve months from the earlier of:

(A)

the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

(B)

the date on which such Finance Party otherwise ceases to be a Finance Party.

39.	Limited recourse

39.1	Limited Recourse

Notwithstanding the other provisions of this Agreement and solely in relation to a SPV Lender, a Party’s recourse (if any) to that SPV Lender under this Agreement (including, inter alia¸ with respect to any costs and expenses incurred by them hereunder) shall be limited to the funds (which funds may be limited to amounts raised through a Funding Source (if

103

any) as set out in the terms of such Funding Source) available to the SPV Lender (excluding share capital and earnings representing corporate benefit) and to the extent such funds are insufficient, the claims of any Party (if any) in excess of such funds shall be extinguished. The Agent’s recourse (if any) may be further limited by agreement by it outside the terms of this Agreement and any such agreement shall not constitute an amendment or waiver for the purposes of this Clause 38 (Limited recourse).

39.2	Non-Petition

Notwithstanding the other provisions of this Agreement and solely in relation to a SPV Lender, each Party agrees that it will not, nor will it entice any other third party to do so, take or join in taking any corporate action or other steps or legal proceedings for the winding-up, dissolution, bankruptcy or reorganisation or for the appointment of a receiver, examiner, administrator, administrative receiver, trustee, liquidator or similar officer of any SPV Lender or of any or all of any SPV Lender’s revenues and assets.

39.3	Security

Each Party acknowledges and agrees that any SPV Lender which funds its participation in the Loan through a Funding Source will create security in favour of the holders or trustee or representative of holders of obligations or securities comprised in such Funding Source over that SPV Lender’s rights, title and interests in relation to this Agreement pursuant to any trust deed relating to such Funding Source and will give notice of such creation to the other Parties hereto.

39.4	Survival

The provisions of this Clause 39 (Limited recourse) shall survive notwithstanding any termination of this Agreement or any Finance Document.

40.	Conflicts as to pricing under this Agreement

In the event of any express conflict as to the terms of pricing under this Agreement, including the calculation of any payments of principal and/or interest owed by the Borrower pursuant to Clause 6 (Repayment), Clause 7 (Prepayment and Cancellation), or Clause 20 (Events of Default) the terms set out in Schedule 10 (Pricing) shall prevail.

41.	Counterparts

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

42.	Governing law

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

43.	Enforcement

43.1	Jurisdiction

(A)

The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a “Dispute”).

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(B)

The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

(C)

Notwithstanding Clause 43.1(A), no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

(D)

Each Guarantor does hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of England, in any action or proceeding arising out of or relating to this Agreement and/or any Dispute arising hereunder or any other document or instrument executed in connection herewith.

43.2	Service of process

Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):

(A)

irrevocably appoints the Original Borrower as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

(B)

agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.

43.3	Contractual recognition of Bail-In

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

(A)

any Bail-In Action in relation to any such liability, including:

(1)

a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

(2)

a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

(3)

a cancellation of any such liability; and

(B)

a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

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43.4	California Jury Waiver

IF AND TO THE EXTENT CALIFORNIA LAW IS APPLIED TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS OR INSTRUMENTS EXECUTED IN CONNECTION HEREWITH NOTWITHSTANDING SECTION 37 ABOVE, EACH OF THE PARTIES HERETO DOES HEREBY EXPRESSLY AGREE TO SUBMIT TO JUDICIAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1 ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING HEREUNDER FOR WHICH A JURY TRIAL WOULD OTHERWISE BE APPLICABLE OR AVAILABLE. PURSUANT TO SUCH JUDICIAL REFERENCE, THE PARTIES AGREE TO THE APPOINTMENT OF A SINGLE REFEREE AND SHALL USE THEIR BEST EFFORTS TO AGREE ON THE SELECTION OF A REFEREE. IF THE PARTIES ARE UNABLE TO AGREE ON A SINGLE A REFEREE, A REFEREE SHALL BE APPOINTED BY THE COURT UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 AND 640 TO HEAR ANY DISPUTES HEREUNDER IN LIEU OF ANY SUCH JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT THE APPOINTED REFEREE SHALL HAVE THE POWER TO DECIDE ALL ISSUES IN THE APPLICABLE ACTION OR PROCEEDING, WHETHER OF FACT OR LAW, AND SHALL REPORT A STATEMENT OF DECISION THEREON; PROVIDED, HOWEVER, THAT ANY MATTERS WHICH WOULD NOT OTHERWISE BE THE SUBJECT OF A JURY TRIAL WILL BE UNAFFECTED BY THIS WAIVER AND THE AGREEMENTS CONTAINED HEREIN. THE PARTIES HERETO HEREBY AGREE THAT THE PROVISIONS CONTAINED HEREIN HAVE BEEN FAIRLY NEGOTIATED ON AN ARMS-LENGTH BASIS, WITH ALL SIDES AGREEING TO THE SAME KNOWINGLY. ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY AND THE AGREEMENTS CONTAINED HEREIN REGARDING THE APPLICATION OF JUDICIAL REFERENCE IN THE EVENT OF THE INVALIDITY OF SUCH JURY TRIAL WAIVER.

Initials _____________

This Agreement has been entered into on the date stated at the beginning of this Agreement.

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SIGNATURES TO THE AMENDMENT AND RESTATEMENT DEED

The Original Borrower

SIGNED AND DELIVERED as a DEED

for and on behalf of

ROCKLEY PHOTONICS LIMITED

Acting by its duly authorised Attorney:

/s/ Andrew George Rickman

Title: Chief Executive Officer

Name: Andrew George Rickman

In the presence of:

/s/ Maria Grew

Witness Signature

Name: Maria E Grew

Address:

Occupation:

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The New Borrower

SIGNED AND DELIVERED as a DEED

for and on behalf of

ROCKLEY PHOTONICS HOLDINGS LIMITED

Acting by its duly authorised Attorney:

/s/ Andrew George Rickman

Title: Chief Executive Officer

Name: Andrew George Rickman

In the presence of:

/s/ Maria Grew

Witness Signature

Name: Maria E Grew

Address:

Occupation:

108

The Guarantors

SIGNED AND DELIVERED as a DEED

for and on behalf of

ROCKLEY PHOTONICS, INC.

Acting by its duly authorised Attorney:

/s/ Andrew George Rickman

Title: Chief Executive Officer

Name: Andrew George Rickman

In the presence of:

/s/ Maria Grew

Witness Signature

Name: Maria E Grew

Address:

Occupation:

109

The Guarantors

SIGNED AND DELIVERED as a DEED

for and on behalf of

ROCKLEY PHOTONICS LIMITED

Acting by its duly authorised Attorney:

/s/ Andrew George Rickman

Title: Chief Executive Officer

Name: Andrew George Rickman

In the presence of:

/s/ Maria Grew

Witness Signature

Name: Maria E Grew

Address:

Occupation:

110

The Original Lender

SIGNED AND DELIVERED as a DEED

for and on behalf of

ARGENTUM SECURITIES IRELAND PLC

Acting by its duly authorised Attorney:

/s/ John Paul Macguire

Title: Attorney

Name: John Paul Maguire

In the presence of:

/s/ Peadar Macguire

Witness Signature

Name: Peadar Maguire

Address:

Occupation:

111

Credit Suisse International, in its own name

SIGNED AND DELIVERED as a DEED

for and on behalf of

CREDIT SUISSE INTERNATIONAL

By:

/s/ Imene Moussa

Title: Director

Name: Imene Moussa

In the presence of:

/s/ Rachel Dunn

Witness Signature

Name: Rachel Dunn

Address:

Occupation:

By:

/s/ Oliver Crosby

Title: Director

Name: Oliver Crosby

In the presence of:

/s/ Rachel Dunn

Witness Signature

Name: Rachel Dunn

Address:

Occupation:

112

The Agent and the Security Agent

SIGNED AND DELIVERED as a DEED

for and on behalf of

CREDIT SUISSE INTERNATIONAL

By:

/s/ Ian Croft

Title: Authorised Signatory

Name: Ian Croft

In the presence of:

/s/ Imene Moussa

Witness Signature

Name: Imene Moussa

Address:

Occupation:

By:

/s/ Imene Moussa

Title: Director

Name: Imene Moussa

In the presence of:

/s/ Rachel Dunn

Witness Signature

Name: Rachel Dunn

Address:

Occupation:

113

The Arranger

SIGNED AND DELIVERED as a DEED

for and on behalf of

SIG- I CAPITAL AG

By:

/s/ Elena Nikolaeva

Title: CEO

Name: Elena Nikolaeva

In the presence of:

/s/ Alex Hoffman

Witness Signature

Name: Alex Hoffman

Address:

Occupation:

By:

/s/ Jakub Topp

Title: Chief Investment Officer, SIG-i Capital AG

Name: Jakub Topp

In the presence of:

/s/ Alex Hoffman

Witness Signature

Name: Alex Hoffman

Address:

Occupation:

114

Exhibit 10.25

August 11, 2021

Andrew Rickman

Re: Post-Business Combination Equity

Dear Andrew,

As you know, Rockley Photonics Limited (the “Company”) and Rockley Photonics Holdings Limited (“Holdings”) have entered into a Business Combination Agreement, dated as of March 19, 2021 (the “Business Combination Agreement”), with SC Health Corporation and Rockley Mergersub Limited, pursuant to which, upon the consummation of the transactions contemplated therein (the “Closing”), among other things, the Company will become a subsidiary of Holdings. In connection with the Closing, it is also expected that the Company and you will amend your employment agreement with the Company dated April 1, 2020 (as amended, your “Employment Agreement”).

This letter confirms that, in connection with the Closing, subject to approval by the Board of Directors of Holdings (the “Holdings Board”), and conditioned upon the filing of a Form S-8 registration statement by Holdings with respect to the Holdings 2021 Stock Incentive Plan (the “Stock Incentive Plan”), you will be granted a combination of (i) stock options to purchase shares of Holdings common stock at a price equal to such stock’s fair market value on the date of grant and/or (ii) restricted stock units for shares of Holdings common stock having an aggregate fair value determined at the Closing (or at grant) equal to $5 million. The equity awards shall be subject to the Stock Incentive Plan and such additional terms and conditions, including time-based quarterly vesting over four (4) years following the Closing subject to your continued employment, as shall be set forth in the applicable equity award agreement approved by the Holdings Board.

In addition, in the event that the Company and Holdings consider that your Employment Agreement has been terminated by (a) the Company for a reason other than for Cause or (b) lawfully by you for Good Reason (as each is defined in your Employment Agreement), in each case on or within twelve (12) months following a Change in Control (as defined in the Stock Incentive Plan), the above mentioned equity award(s) will vest in full, provided you execute a Severance Agreement and Release of Claims relating to your employment and its termination, in a form agreed with the Company, no later than sixty (60) days after the effective date of termination of employment.

This letter agreement shall be governed by, and construed in accordance with, the laws of England and Wales. The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute arising out of or in connection with this letter.

This letter agreement may be executed in a number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this letter agreement.


ROCKLEY PHOTONICS LIMITED		ROCKLEY PHOTONICS HOLDINGS INC.

By:		By:
	Name:		Name:
	Title:		Title:

Understood and Accepted:

/s/ Andrew Rickman

Andrew Rickman

Date:_____________________________________

Exhibit 10.26

August 11, 2021

DEED OF AMENDMENT OF EMPLOYMENT AGREEMENT

between

ROCKLEY PHOTONICS LIMITED

and

ROCKLEY PHOTONICS HOLDINGS LIMITED

and

ANDREW RICKMAN

Deed of Amendment (the “Deed”)

Dated August 11, 2021

Between

(1)	Rockley Photonics Limited, a company incorporated under the laws of England and Wales with company number 8683015, with its registered address at 3rd Floor 1 Ashley Road, Altrincham, Cheshire, United Kingdom, WA14 2DT (the “Company”);

(2)	Rockley Photonics Holdings Limited, an exempted company incorporated in the Cayman Islands with limited liability, with its registered address at 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, UK, WA14 2DT (“Holdco”); and

(3)	Andrew Rickman of _____________________ (the “Executive”), together (the “Parties”).

Recitals

The Executive has been employed by the Company as its Chief Executive Officer pursuant to an Employment Agreement, dated April 1, 2020, by and between the Company and the Executive (the “Employment Agreement”), although the Executive’s period of continuous employment with the Company began on 9 September 2013.

A Business Combination Agreement was entered into on 19 March 2021 (the “Business Combination Agreement”), between (1) SC Health Corporation, (2) Holdco, (3) Rockley Mergersub and (4) the Company pursuant to which, upon the consummation of the transactions contemplated therein (the “Closing”), among other things, the Company will become an indirect subsidiary of Holdings.

C.	Holdco, the Company and the Executive desire to amend the Employment Agreement to reflect certain changes agreed to which are conditional upon and will take effect on and from Closing.

It is agreed

1.	Amendments to the Employment Agreement

The Employment Agreement continues in full force and effect, subject to the following amendments:

1.1 Title

Clause 1 of the Employment Agreement shall be amended to state:

“You will continue be employed by the Company as Chief Executive Officer or in such other capacity as the Company may reasonably require. You will report to the Board of Directors (“Board”) of the Company or such other person as the Board of the Company may determine. In addition, after the Closing, you shall serve as the Chief Executive Officer and Chairman of HoldCo and report to HoldCo’s Board, and you agree to serve, if appointed or elected, as an officer or director of any other affiliate of the Company without further compensation.”

1.2 Job Duties

Following the Closing, all references to the Company and the Company’s Board in Clause 2 shall be deemed to also include HoldCo and HoldCo’s Board, respectively.

1.3 Salary and Bonus

The annual basic salary stated in Clause 7.1 of the Employment Agreement shall be amended from $244,180.60 USD per annum to $500,000.00 USD per annum, and the annual performance bonus target in Clause 7.4 shall be amended from 50% of Executive’s base salary to 100% of Executive’s base salary.

1.4 Hours of Work

The first sentence of Clause 10.1 of the Employment Agreement shall be amended to state:

“You agree to work such hours as may be necessary for the proper and efficient performance of your duties under this agreement and in any event not less than 40 working hours each week.”

1.5 Holidays

The second sentence of Clause 11.1 of the Employment Agreement shall be amended to state:

“You will be entitled to 33 working days of paid holiday entitlement in each full holiday year, inclusive of all recognised English public holidays but for the holiday year 2021 your holiday entitlement will be calculated on a pro rata basis applying 25.5 days from 1 January 2021 until the Closing and 33 days thereafter until 31 December 2021.”

1.6 Term of Employment

1.6.1 Clause 20.1 of the Employment Agreement shall be amended to state:

“Subject to the remainder of this clause 20, your employment may be terminated by the Company giving you not less than twelve (12) months written notice of termination of employment (or such longer notice period as may be required by applicable statute), and you must give the Company no less than twelve (12) months written notice of termination.”

1.6.2 Clause 20.2 of the Employment Agreement shall be amended to state:

“In the event of your employment being terminated by the Company, except for Cause as outlined in clause 20.3, or in the event of your resignation for Good Reason, you will be eligible to receive, subject to your execution of a Severance Agreement and Release of Claims relating to your employment and its termination in a form agreed with the Company, commencing no later than 60 calendar days after your last day of employment: (i) 100% of the sum of your annual base salary plus target annual bonus for the year in which the notice of termination occurs reduced by the amount of basic salary paid in lieu of notice pursuant to clause 20.4 (payable in equal instalments on the Company’s regular payroll schedule over the twelve-month period following your final day of employment), and (ii) continuation of all benefits for a period of twelve months following your final day of employment, including private medical cover, insurances, pension and other benefits on the same terms that were offered prior to termination. For the avoidance of doubt, the Company’s waiver, in whole or in part, of your obligation to serve notice of termination shall not constitute a termination of your employment by the Company giving rise to benefits under this clause 20.2.”

1.6.3 Clause 20.3 of the Employment Agreement shall be amended to state:

“The Company may terminate your employment for Cause, as determined by the Company acting in good faith, with immediate effect, without notice and without a payment in lieu of notice. A resignation by you shall be considered a constructive termination by the Company without Cause if the Company determines, acting reasonably, that such resignation was for Good Reason, and you shall not be required to provide notice of termination in accordance with clause 20.1 where your resignation qualifies as a resignation for Good Reason.”

Clause 20.4 of the Employment Agreement shall be amended to state:

“Without prejudice to the Company’s rights under clause 20.3, the Company may, in its absolute discretion and at any time (whether or not notice has been served by either party under clause 20.1 above), terminate your employment with immediate effect by giving to you written notice of such summary termination and such termination shall be lawful and not constitute a breach of this agreement provided that the Company, in its absolute discretion, pays to you a sum equal to the basic salary which would have been paid to you during the unexpired period of notice due to you under clause 20.1 of this agreement (payable in equal instalments on the Company’s regular payroll schedule over the twelve-month period following your final day of employment). For this purpose, any resignation by you shall be considered a constructive termination by the Company under this provision if the Company determines, acting reasonably, that such resignation was for Good Reason. For the avoidance of doubt, nothing in this clause 20.4 shall give you any right to receive such a payment in lieu of notice. In the event that the Company fails to make such a payment in lieu of notice to you (and clause 20.3 is not applicable), the termination shall constitute a breach of contract and you agree to take all reasonable steps to mitigate your losses. If paid, the payment in lieu of notice shall be subject to deductions for income tax, employee’s national insurance contributions and any other deductions required by law or permitted to be made under this agreement.”

1.7 Restrictions after termination of employment

Clause 21 of the Employment Agreement shall be amended and replaced with the following:

21.1 You agree and covenant to the Company that you will not, without the prior written permission of the Board, during the period of 12 months immediately following the Termination Date (less any period of Garden Leave), whether on your own behalf or on behalf of any individual, company, firm, business or other organisation, directly or indirectly:

in connection with the carrying on of any business which competes in the Restricted Area with the Business, solicit or entice away from the Company or any Group Company the business or custom of any customer or Prospective Customer with which customer or Prospective Customer you had business dealings on behalf of the Company or any Group Company during the Relevant Period or about which customer or Prospective Customer you are privy to confidential information at the Termination Date;

in connection with the carrying on of any business which competes in the Restricted Area with the Business, have any business dealings with, including by accepting any business, orders or custom from, any customer or Prospective Customer of the Company or any Group Company with which customer or Prospective Customer you had business dealings on behalf of the Company or any Group Company during the Relevant Period or about which customer or Prospective Customer you are privy to confidential information at the Termination Date;

in connection with the carrying on of any business which competes in the Restricted Area with the Business, endeavour to entice away from the Company or any Group Company any supplies of goods or services being provided to the Company or any Group Company by any person, firm, company or organisation whom or which supplied goods or services to the Company or any Group Company during the Relevant Period with whom you had business dealings on behalf of the Company or any Group Company in the course of the Relevant Period or about whom you are privy to confidential information at the Termination Date;

in any way seek to affect the terms of business on which the Company or any Group Company deals with any person, firm, company or organisation whom or which was a customer, agent, distributor or contractor of or whom or which supplied goods or services to the Company or any Group Company during the Relevant Period or act or omit to act in any manner which will or is likely to result in any such person, firm, company or organisation terminating or reducing the amount of business dealings with or the custom, services or supplies it provides to or for the Company or any Group Company;

solicit, engage, or seek to entice away from the Company or any Group Company, or facilitate any such activities by another, any person employed or engaged by the Company or any Group Company as a director, officer, president or a vice president or any other person employed or engaged in a managerial, technical, engineering, sales, marketing, research and/or development capacity at the Termination Date with whom you had dealings during the Relevant Period. This restriction shall apply regardless of whether the solicitation involves a breach of contract on the part of the consultant, director or employee concerned; or

employ or engage or offer to employ or engage any person employed or engaged by the Company or any Group Company as a director, officer, president or a vice president or any other person employed or engaged in a managerial, technical, engineering, sales, marketing, research or product development capacity at the Termination Date with whom you had dealings during the Relevant Period. This restriction shall apply regardless of whether the employment involves a breach of contract on the part of the consultant, director or employee concerned.

21.2 You agree and covenant to the Company that you will not, without the prior written permission of the Board, for a period of 12 months immediately following the Termination Date (less any period of Garden Leave):

be engaged, appointed or employed within the Restricted Area by;

undertake any duties in relation to the Restricted Area (wherever you are based) for; or

be otherwise interested, concerned or involved in,

(as the context permits) any person, firm, company, corporation, business or organisation which competes in the Restricted Area with the Business.

PROVIDED THAT, such restrictions in this Section 21.2 shall not apply if the Executive is dismissed without Cause; and/or gives notice of resignation for Good Reason.

21.3 You agree and covenant to the Company that you will not, without the prior written permission of the Board, for a period of 12 months immediately following the Termination Date (less any period of Garden Leave):

be engaged, appointed or employed within the Restricted Area by;

undertake any duties in relation to the Restricted Area (wherever you are based) for;

be otherwise interested, concerned or involved in,

(as the context permits) any person, firm, company, corporation, business or organisation which is a customer, of the Company or any Group Company.

PROVIDED THAT, such restrictions in this Section 21.3 shall not apply if the Executive is dismissed without Cause; and/or gives notice of resignation for Good Reason.

21.4 Each of the sub-clauses contained in clause 21 constitutes an entirely separate and independent covenant. If any restriction is held to be invalid or unenforceable by a court of competent jurisdiction, it is intended and understood by the parties that such invalidity or unenforceability will not affect the remaining restrictions or the validity of the rest of the agreement and that if any such restriction would be valid if some part thereof were deleted, such restrictions shall apply with such modification as may be necessary to make them effective.

21.5 You agree that if you receive an offer of employment, consultancy, directorship or other office or partnership during the continuance in force of any of the above, you will prior to acceptance of an offer, provide the party making the offer with copies of this clause and details of your notice period, the restrictions on your use and disclosure of confidential information and the clauses dealing with copyright and inventions.

21.6 You acknowledge that the Company is entering into this agreement not only for itself but also as the trustee of each Group Company and with the intention that the Company and/or any Group Company will be entitled to seek the protection of and enforce each of its restrictions directly against you. If requested to do so by the Company, you will at any time enter into like restrictions as those contained in this clause 21 (mutatis mutandis) with any other Group Company.

21.7 Nothing in this clause 21 shall prohibit you from holding passive investments in any companies in which you hold less than 5% of the voting rights and/or the fully diluted share capital thereof.

21.8 Following the date upon which your employment terminates, you will not:

represent yourself as being in any way connected with the business of the Company or any Group Company (except to the extent agreed by such Company); or

carry on, cause or permit to be carried on any business under or using any name, trade mark, service mark, style, logo, get-up or image which is or has been used by the Company or any Group Company, or which in the reasonable opinion of the Company, is calculated to cause confusion with such a name, trade mark, service mark, style, logo, get-up or image or infer a connection with the Company or any Group Company.

1.8 Definitions:

1.8.1 Two new sub-clauses will be inserted immediately after the current sub-clause 30.4 of the Employment Agreement as follows:

30.5 “Cause” shall mean: (a) (i) you have failed or refused to perform your assigned duties for the Company or any Group Company (other than in the circumstances of Clause 14) after notice and a fifteen (15) day opportunity to cure, or (ii),in the reasonable view of the Company, you are guilty of serious misconduct, wilful neglect of duty, dishonesty, gross incompetence or gross negligence, (b) you are convicted of or plead guilty or nolo contendere or equivalent to a criminal offence, other than minor road traffic offences or similar offences, which has a detrimental impact on your ability to perform your role and/or brings the Company or any Group Company into disrepute; (c) serious breach of a fiduciary duty including but not limited to you utilising an opportunity for yourself instead of offering such opportunity to the Company or any Group Company if it is within the scope of the business of the Company or any Group Company or (d) material breach of the Employment Agreement.

30.6 “Closing” shall mean the consumption of the transactions contemplated in the Business Combination Agreement was entered into on 19 March 2021 between (1) SC Health Corporation, (2) Holdco, (3) Rockley Mergersub and (4) the Company pursuant to which, among other things, the Company will become an indirect subsidiary of Holdings.

1.8.2 A new sub-clause will be inserted immediately after the current sub-clause 30.5 of the Employment Agreement as follows:

“Good Reason” shall mean (i) without your written consent, the relocation of the principal place at which you provide services to the Company by thirty (30) miles, other than a direction that reduces your daily commute, (ii) a material reduction in your authority, duties, or responsibilities or change in title without your consent, provided that you shall consent to removal as Chairman where, in the reasonable opinion of the Board and after prior discussion with the Executive, such removal is in the best interests of the Company and its stockholders from a regulatory or governance perspective, (iii) failure of the Company to appoint or elect you to the Board or failure to be re-elected to, or removal of you from the Board (other than pursuant to your voluntary resignation without Good Reason, or a termination of your employment due to death or disability or for Cause), (iii) a reduction of your base salary without your prior consent other than non-material reductions consistent with changes to the base salaries of other members of the Company’s senior management team, or (iv) a material breach of this Agreement by the Company. You must (i) provide notice to the Company of the purported event giving rise to Good Reason within ninety (90) days after the event occurs, (ii) provide the Company with thirty (30) days to cure, and (iii) if not cured, resign with Good Reason within thirty (30) days after the end of the cure period. For the avoidance of doubt, the events described in clause 19 shall not constitute grounds for a termination for Good Reason or otherwise constitute a constructive termination by the Company.

1.8.3

The remaining provisions of clause 30 of the Employment Agreement shall be re-numbered accordingly.

2	Effective Date

The amendments to the Employment Agreement contained in Clause 1 of this Deed shall take effect on and from, and be contingent upon, the Closing.

3	Notices

3.1	Any communication to be made under or in connection with this Deed shall be made in writing and made in accordance with the terms of the Company Employment Agreement as varied by this Deed.

3.2	The contact details of each party for any communication or document to be made or delivered under or in connection with this Deed are set out in the Company Employment Agreement as varied by this Deed.

3.3	Any communication or document made or delivered by one person to another under or in connection with this Deed shall be effective in the manner set out in the Company Employment Agreement as varied by this Deed.

4	Counterparts

This Deed may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Deed.

5	Governing law and jurisdiction

5.1	This Deed shall be governed by, and construed in accordance with, the laws of England and Wales.

5.2	The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed.

Executed as a deed and delivered on the date appearing at the beginning of this Deed.


Executed as a deed by	)
ROCKLEY PHOTONICS	)
LIMITED acting	)
by a director in the presence of:	)	Director



Signature of witness:		/s/ Caroline Brown

Name of witness:

Address:


Executed as a deed by	)
ROCKLEY PHOTONICS	)
HOLDINGS LIMITED acting	)
by a director in the presence of:	)	Director



Signature of witness:		/s/ Caroline Brown

Name of witness:

Address:


Executed as a deed by		)
ANDREW RICKMAN		)
in the presence of:		)



Signature of witness:		/s/ Andrew Rickman

Name of witness:

Address:

Exhibit 10.27

6 August 2021

DEED OF TERMINATION OF CONSULTANCY AGREEMENT

between

ROCKLEY PHOTONICS LIMITED

and

ROCKLEY VENTURES LIMITED

Deed of Termination (the “Deed”)

Dated 6 August 2021

Between

(1)	Rockley Photonics Limited, a company incorporated under the laws of England and Wales with company number 08683015 (the “Client”); and

(2)	Rockley Ventures Limited, a company registered under number 06499415 with its registered office at _____________________________ (“Company”),

together (the “Parties”).

Recitals

The Client and the Company entered into a Consultancy Agreement dated 1 August 2020 (the “Consultancy Agreement”)

A Business Combination Agreement was entered into on 19 March 2021 (the “Business Combination Agreement”), between (1) SC Health Corporation, (2) Rockley Photonics Holdings Limited, (3) Rockley Mergersub and (4) the Client pursuant to which, upon the consummation of the transactions contemplated therein (the “Closing”), among other things, the Client will become an indirect subsidiary of Holdings.

The Client and the Company wish to record the termination of the Consultancy Agreement with effect from the Termination Date (as defined below):

It is agreed

1.	Termination of the Consultancy Agreement

1.1	The Parties confirm and agree that the Consultancy Agreement shall terminate by mutual agreement with effect from the Closing (the “Termination Date”) notwithstanding Clause 13.1 of the Consultancy Agreement.

1.2	Each Party warrants and represents that it has complied with all its obligations under the Consultancy Agreement from 1 August 2020 up to and including the Termination Date.

1.3

Each Party acknowledges and agrees that Clause 13.5 is applicable in relation to the termination of the Consultancy Agreement and accordingly such termination shall not affect any of the provisions of the Consultancy Agreement which are expressed to operate or have effect or are capable of operation or effect after such termination as of the Termination Date. The Company specifically shall procure compliance by each of the Consultants (as defined in the Consultancy Agreement) with all relevant obligations of the Consultancy Agreement after the Termination Date.

2	Notices

2.1	Any communication to be made under or in connection with this Deed shall be made in writing and made in accordance with the terms of the Consultancy Agreement.

2.2	The contact details of each party for any communication or document to be made or delivered under or in connection with this Deed are as set out in the recitals of this Deed.

2.3	Any communication or document made or delivered by one person to another under or in connection with this Deed shall be effective in the manner set out in the Consultancy Agreement.

3	Counterparts

This Deed may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Deed.

4	Governing law and jurisdiction

4.1	This Deed shall be governed by, and construed in accordance with, the laws of England and Wales.

4.2	The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed.

Executed as a deed and delivered on the date appearing at the beginning of this Deed.


Executed as a deed by	)
ROCKLEY PHOTONICS	)
LIMITED acting	)
by an Authorised Signatory	)	Authorised Signatory



Signature of witness:		/s/ Averil Finn

Name of witness:

Address:


Executed as a deed by	)
ROCKLEY VENTURES	)
LIMITED acting	)
by a director in the presence of:	)	Director



Signature of witness:		/s/ Andrew Rickman

Name of witness:

Address:

Exhibit 10.28

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), is made and entered into by and between Rockley Photonics, Inc. (the “Company”), Rockley Photonics Holdings Limited (“Holdings”) and Mahesh Karanth (the “Executive”). This Agreement shall become effective on August 11, 2021 or such other date as may be mutually agreed to by the Company and the Executive (the “Effective Date”).

RECITALS

WHEREAS, the Executive has been employed by the Company as its Chief Financial Officer pursuant to that certain Employment Agreement, effective on December 20, 2017 by and between the Company and the Executive, as amended from time to time thereafter (the “Company Employment Agreement”);

WHEREAS, Holdings has entered into a Business Combination Agreement, dated as of March 19, 2021 (the “Business Combination Agreement”), with SC Health Corporation, Rockley Mergersub Limited and Rockley Photonics Limited, pursuant to which, upon the consummation of the transactions contemplated therein (the “Closing”), among other things, the Company became an indirect subsidiary of Holdings;

WHEREAS, Holdings, the Company and the Executive desire to amend and restate the Company Employment Agreement in its entirety to reflect certain changes agreed to after the Closing.

NOW, THEREFORE, in consideration of the foregoing, the premises and mutual covenants contained herein, and for other valuable consideration, Holdings, the Company and the Executive hereby agree as follows:

1. Term of Employment.

(a) Term of Employment. The term of this Agreement shall commence on the Effective Date and continue until terminated by the Company or the Executive (the “Term of Employment”). During the Term of Employment, the Executive shall be an at-will employee of the Company (or Company affiliate as described in Section 2), and the Executive’s employment shall be freely terminable by either the Company (or its affiliate) or the Executive, for any reason, at any time, with or without cause or notice.

2. Position. During the Term of Employment, the Executive shall serve as the Chief Financial Officer of the Company and, following the Closing, Holdings, and also agrees to serve, if appointed or elected, as an officer or director of any other affiliate of the Company.

3. Place of Work.

(a) The Executive’s normal place of work will be the Company’s premises at 333 West San Carlos Street, Suite 850, San Jose, CA 95110. The Executive shall be regularly expected to travel to and work from other Company locations, as required. The Company reserves the right to change the Executive’s normal place of work, temporarily or permanently, to anywhere provided that the Company will give the Executive at least one month’s prior notice of any permanent change of location.

(b) The Executive shall travel as required by the Executive’s job duties.

4. Hours of Work. As a full-time exempt salaried employee, the Executive agrees to work such hours as may be necessary for the proper and efficient performance of Executive’s duties under this Agreement. Due to the international scope of the Executive’s position, it is expected that the Executive’s work hours will vary and that the Executive will meet the needs of the business in his role by being available in a timely fashion across time zones.

5. Scope of Employment. During the Term of Employment, the Executive shall be responsible for the performance of those duties consistent with his position. The Executive shall also be responsible for performing those duties that are assigned to him from time to time by the Chief Executive Officer of the Company and, following the Closing, Holdings (the “CEO”). The Executive shall report to the CEO and shall perform and discharge faithfully, diligently, and to the best of his ability, the Executive’s duties and responsibilities hereunder. The Executive shall devote the Executive’s entire business time, loyalty, attention and efforts to the business and affairs of the Company and its affiliates. The Executive agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and, as applicable, its affiliates, and any changes therein that may be adopted by them from time to time.

6. Compensation. As full compensation for all services rendered by the Executive during the Term of Employment, the Company will provide to the Executive the following, which shall be subject to annual review:

(a) Base Salary. The Executive currently receives a base salary at the annualized rate of $310,512 (the “Base Salary”), paid in equal installments in accordance with the Company’s regularly established payroll procedure. The Base Salary shall increase to $450,000 following the Closing and shall be subject to further adjustment at the discretion of the Board of Directors of the Company or the Compensation Committee thereof.

(b) Annual Performance Bonus. The Executive shall be eligible to receive an annual performance bonus at the target rate of 60% of the Executive’s Base Salary provided the Executive meets the targets established for the applicable year, and provided that the Executive is an active employee with the Company on the date such bonus is paid. For the applicable year, the Executive’s individual performance as the Chief Financial Officer will be subject to the terms and conditions of the applicable plan in force from time to time and the successful achievement by the Executive and/or the Company of any targets or objectives determined by the Company for each year. The Company will pay any such bonus in accordance with the Company’s established Compensation and Bonus Policy. The Company reserves the right to amend the bonus scheme from time to time within the absolute discretion of the Company and the Board.

(c) Vacation. The Executive shall be eligible for paid vacation in accordance with the Company’s established Vacation Time Policy.

(d) Sick Pay. The Executive shall be eligible for up to ten (10) days (or two (2) weeks) of paid sick days per calendar year. Sick pay is available immediately and is prorated based on the start date, with a minimum of 24 hours, which will reset to ten (10) days at the beginning of each calendar year.

(e) Equity. Subject to approval by the Board of Directors of Holdings (the “Holdings Board”), and conditioned upon the filing of a Form S-8 registration statement by Holdings with respect to the Holdings 2021 Stock Incentive Plan (the “Stock Incentive Plan”), the Executive will be granted a combination of (i) stock options to purchase shares of Holdings common stock at a price equal to such stock’s fair market value on the date of grant and/or (ii) restricted stock units for shares of Holdings common stock having an aggregate fair value determined at the Closing (or at grant) equal to $2 million. The equity awards shall be subject to the Stock Incentive Plan and such additional terms and conditions, including time-based quarterly vesting over four (4) years following the Closing subject to the Executive’s continued employment, as shall be set forth in the applicable equity award agreement approved by the Holdings Board.

(f) Benefits. The Executive may participate in any and all benefit programs that the Company or Holdings establishes and makes available to its employees from time to time, provided that the Executive is eligible under (and subject to all provisions of) the plan documents governing those programs. Benefits are subject to change at any time in the Company’s or Holdings’ sole discretion.

(g) Withholdings. All compensation payable to the Executive shall be subject to applicable taxes and withholdings.

7. Expenses. The Executive shall be entitled to reimbursement by the Company for all reasonable business and travel expenses incurred by him on the Company’s behalf during the course of his employment, upon the presentation by the Executive of documentation itemizing such expenditures and attaching all supporting vouchers and receipts. The Executive may fly business class for Company business-related international air travel. All Company reimbursement for domestic air travel shall be at coach class rates. Reimbursement will be made no later than 30 calendar days after the expense is substantiated (which must occur within 30 calendar days after the expense is incurred). The expenses eligible for reimbursement under this provision may not affect the amount of such expenses eligible for reimbursement in any other taxable year, and the right to reimbursement is not subject to liquidation or exchange for another benefit.

8. Inventions, Non-Disclosure, and Non-Solicitation Agreement. As a condition of his employment, the Executive shall have executed the Invention, Non-Disclosure, and Non-Solicitation Agreement provided to him by the Company. Notwithstanding the forgoing, the Executive acknowledges and the Company agrees that the Executive may disclose confidential information in confidence directly or indirectly to federal, state, or local government officials, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any governmental agency or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law or regulation or making other disclosures that are protected under the whistleblower provisions of state or federal laws or regulations. The Executive may also disclose confidential information in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal. Nothing in this Agreement is intended to conflict with federal law protecting confidential disclosures of a trade secret to the government or in a court filing, 18 U.S.C. § 1833(b), or to create liability for disclosures of confidential information that are expressly allowed by 18 U.S.C. § 1833(b).

9. Termination.

(a) Without regard to the reason for, or the timing of, Executive’s termination of employment, the Company shall pay the Executive any unpaid wages due for periods prior to the termination date promptly upon termination and within the period of time mandated by law, and provide any other benefits or rights the Executive has accrued or earned through the termination date in accordance with the terms of the applicable employee benefit plans and programs of the Company.

(b) In the event of any termination of the Term of Employment by the Company without Cause or by the Executive for Good Reason, the Executive will be entitled to receive the following severance benefits from the Company, provided the Executive executes a Severance Agreement and Release of All Claims, in a form provided by the Company, no later than sixty (60) days after the Executive’s last day of employment:

(i)

severance payments equal to the sum of six (6) months of his Base Salary as then in effect plus 50% of the Executive’s target bonus for the year in which the termination occurs, payable in equal installments on the Company’s regular payroll schedule over the six-month period following the Executive’s final day of employment);

(ii)

if the Executive elects COBRA continuation coverage and the Company continues to maintain a group health plan, payment by the Company of the full premium cost to continue the then-applicable medical, dental and vision coverage for the Executive (and the Executive’s eligible dependents) under COBRA for six (6) months following the termination date but not beyond the date that the Executive (or the Executive’s dependent(s)) become COBRA ineligible (the “Coverage Period”). Notwithstanding the foregoing, in the event that the Company determines that such COBRA premium payments could result in adverse tax treatment to the Company or the Executive under applicable law, the Company may instead provide the Executive with payments during the Coverage Period equivalent in value to the COBRA premiums otherwise payable by the Company hereunder, but without regard to whether the Executive (or the Executive’s eligible dependents) continue group health coverage under the Company’s group health plan; and

(iii)

if the termination of employment is on or within twelve (12) months following a Change in Control as defined in the Stock Incentive Plan, 100% acceleration of vesting of the equity awards described in Section 6(e).

The aggregate of any severance payments that otherwise would have been paid during the period between the date of termination and the date the release has become irrevocable will be paid in a lump sum in the first payroll period beginning after such release effective date, and any remaining payments will be paid on their original schedule.

(c) “Cause” for termination shall mean: (a) (i) the Executive has failed or refused to perform his assigned duties for the Company or its affiliates after notice and a fifteen (15) day opportunity to cure, or (ii) the Executive has engaged in fraud, dishonesty, misconduct injurious to the business or reputation of the Company or its affiliates or gross negligence, or otherwise acted in willful disregard for the Company’s or its affiliates’ best interests; (b) the Executive’s conviction of, or pleading guilty or nolo contendere to, any misdemeanor involving moral turpitude or related to the Company’s or its affiliates’ business, or to any felony; (c) a breach of fiduciary duty, including, but not limited to, the Executive seizing an opportunity for himself instead of offering such opportunity to the Company or its affiliates if it is within the scope of the Company’s or its affiliates’ business; or (d) a material breach of this Agreement.

(d) “Good Reason” shall mean (i) without the written consent of the Executive, the relocation of the principal place at which the Executive provides services to the Company by thirty (30) miles, other than a direction that reduces the Executive’s daily commute, (ii) a material reduction in the authority, duties, or responsibilities of the Executive, or change in title or reporting without his consent; (iii) a material reduction of the Executive’s base salary without Executive’s prior consent, or (iv) a material breach of this Agreement by the Company after notice and the opportunity to cure specified below. Notwithstanding the foregoing, the parties agree that the addition of a Chief Technology Officer, Chief Strategy Officer, Chief Commercial Officer or similar functionaries will not constitute an event giving rise to Good Reason. The Executive must (i) provide notice to the Company of the purported event giving rise to Good Reason within ninety (90) days after it occurs, (ii) provide the Company with thirty (30) days to cure, and (iii) if not cured, resign with Good Reason within thirty (30) days after the end of the cure period.

10. Limitation on Payments. In the event that the severance and other payments and benefits provided for in this Agreement or otherwise payable to the Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code (“280G Payments”), and (ii) but for this Section 10, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the 280G Payments will be either:

(x) delivered in full, or

(y) delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by the Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. If a reduction in the 280G Payments is necessary so that no portion of such benefits are subject to the Excise Tax, reduction will occur in the following order: (i) cancellation of equity awards granted “contingent on a change in ownership or control” (within the meaning of Code Section 280G); (ii) a pro rata reduction of (A) cash payments that are subject to Section 409A as deferred compensation and (B) cash payments not subject to Section 409A; (iii) a pro rata reduction of (A) employee benefits that are subject to Section 409A as deferred compensation and (B) employee benefits not subject to Section 409A; and (iv) a pro rata cancellation of (A) accelerated vesting of equity awards that are subject to Section 409A as deferred compensation and (B) equity awards not subject to Section 409A. In the event that acceleration of vesting of equity awards is to be cancelled, such acceleration of vesting will be cancelled in the reverse order of the date of grant of the Executive’s equity awards.

A nationally recognized professional services firm selected by the Company, the Company’s legal counsel or such other person or entity to which the parties mutually agree (the “Firm”) will make any determination required under this Section 10. Such determinations will be made in writing by the Firm and any good faith determinations of the Firm will be conclusive and binding upon the Executive and the Company. For purposes of making the calculations required by this Section 10, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Executive and the Company will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section 10. The Company will bear all costs the Firm may incur in connection with any calculations contemplated by this Section 10.

11. Absence of Restrictions. The Executive represents and warrants that he is not bound by any employment contracts, restrictive covenants or other restrictions that prevent him from entering into employment with, or carrying out his responsibilities for, the Company or its affiliates, or which are in any way inconsistent with any of the terms of this Agreement.

12. Amendments. Any amendment to this Agreement shall be made in writing and signed by the parties hereto. The Executive’s “at will” employment status is not subject to change or modification of any kind except if in writing and signed by the Company and the Executive. The Company reserves the right to make personnel decisions regarding the Executive’s employment, including, but not limited to, decisions regarding any transfers or other changes in duties or assignments, changes in salary and other compensation, changes in benefits and changes in Company policies or procedures.

13. Notice. Any notice required to be given, served or delivered to any of the parties hereto shall be sufficient if it is in writing and sent by certified or registered mail with proper postage prepaid, telecopier (with receipt confirmed), courier service or personal delivery addressed as follows:

To Executive:

At the address set forth in the Executive’s personnel file

To Company:

Rockley Photonics Inc.

Trust Center

1209 Orange Street

Wilmington, New Castle, DE 19801

or to such other address as a party from time to time may designate by notice to the other.

14. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California (without reference to the conflict of laws provisions thereof). Any action, suit or other legal proceeding arising under or relating to any provision of this Agreement shall be commenced only in a court of the State of California (or, if appropriate, a federal court located within the State of California), and the Company, Holdings and the Executive each consents to the jurisdiction of such a court.

15. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

16. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties and their respective successors and assigns, including any corporation with which or into which the Company or Holdings may be merged or which may succeed to its assets or business; provided, however, that the obligations of the Executive are personal and shall not be assigned by him.

17. Section 409A.

(a) Six Month Delay. For purposes of this Agreement, a termination of employment means a “separation from service” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). If and to the extent any portion of any payment, compensation or other benefit provided to the Executive in connection with his separation from service (as defined in Section 409A of Code) is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and he is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, as determined by the Company in accordance with its procedures, by which determination he hereby agrees that he is bound, such portion of the payment, compensation or other benefit will not be paid before the earlier of (i) the day that is six months plus one day after the date of separation from service (as determined under Section 409A) or (ii) the tenth day after the date of his death (as applicable, the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to him during the period between the date of separation from service and the New Payment Date will be paid to him in a lump sum in the first payroll period beginning after such New Payment Date, and any remaining payments will be paid on their original schedule.

(b) General 409A Principles. For purposes of this Agreement, each amount to be paid or benefit to be provided will be construed as a separate identified payment for purposes of Section 409A, and any payments that are due within the “short term deferral period” as defined in Section 409A or are paid in a manner covered by Treas. Reg. Section 1.409A 1(b)(9)(iii) will not be treated as deferred compensation unless applicable law requires otherwise. Neither the Company nor the Executive will have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A. This Agreement is intended to comply with the provisions of Section 409A and the Agreement will, to the extent practicable, be construed in accordance therewith. Terms defined in the Agreement will have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A. In any event, neither the Company nor Holdings makes any representations or warranty and neither will have any liability to the Executive or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.

18. Acknowledgment. The Executive states and represents that the Executive has had an opportunity to fully discuss and review the terms of this Agreement with an attorney. The Executive further states and represents that the Executive has carefully read this Agreement, understands the contents herein, freely and voluntarily assents to all of the terms and conditions hereof, and signs the Executive’s name of the Executive’s own free act.

19. Miscellaneous.

(a) No delay or omission by the Company or Holdings in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company or Holdings on any one occasion shall be effective only in that instance and shall not be construed as a bar to or waiver of any right on any other occasion.

(b) The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

(c) In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.


ROCKLEY PHOTONICS, INC.

By:		/s/ Andrew Rickman


		Name: Dr. Andrew George Rickman
		Title: Director

Date:		August 11, 2021


ROCKLEY PHOTONICS HOLDINGS INC.

By:		/s/ Andrew Rickman


		Name: Dr. Andrew George Rickman
		Title: Director

Date:		August 11, 2021


EXECUTIVE:

/s/ Mahesh Karanth
Mahesh Karanth



Date:		August 11, 2021

Exhibit 10.29

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), is made and entered into by and between Rockley Photonics, Inc. (the “Company”), Rockley Photonics Holdings Limited (“Holdings”) and Amit Nagra (the “Executive”). This Agreement shall become effective on August 11, 2021 or such other date as may be mutually agreed to by the Company and the Executive (the “Effective Date”).

RECITALS

WHEREAS, the Executive has been employed by the Company as its Chief Operating Officer pursuant to that certain Employment Agreement, effective on April 25, 2015, by and between the Company and the Executive, as amended pursuant to a letter agreement dated November 15, 2019 (the “Company Employment Agreement”);

WHEREAS, Holdings, the Company and the Executive desire to amend and restate the Company Employment Agreement in its entirety to reflect certain changes agreed to after the Closing.

1. Term of Employment.

2. Position. During the Term of Employment, the Executive shall serve as the Chief Operating Officer of the Company and, following the Closing, Holdings, and also agrees to serve, if appointed or elected, as an officer or director of any other affiliate of the Company.

3. Place of Work.

(a) The Executive’s normal place of work will be the Company’s premises at 234 E. Colorado Blvd, Suite 600, Pasadena, CA 91101. The Company reserves the right to change the Executive’s normal place of work, temporarily or permanently, to anywhere provided that the Company will give the Executive at least one month’s prior notice of any permanent change of location.

(b) The Executive shall travel as required by the Executive’s job duties.

(a) Base Salary. The Executive currently receives a base salary at the annualized rate of $349,675.78 (the “Base Salary”), paid in equal installments in accordance with the Company’s regularly established payroll procedure. The Base Salary shall increase to $450,000 following the Closing and shall be subject to further adjustment at the discretion of the Board of Directors of the Company or the Compensation Committee thereof.

(b) Annual Performance Bonus. The Executive shall be eligible to receive an annual performance bonus at the target rate of 60% of the Executive’s Base Salary provided the Executive meets the targets established for the applicable year, and provided that the Executive is an active employee with the Company on the date such bonus is paid. For the applicable year, the Executive’s individual performance as the Chief Operating Officer will be subject to the terms and conditions of the applicable plan in force from time to time and the successful achievement by the Executive and/or the Company of any targets or objectives determined by the Company for each year. The Company will pay any such bonus in accordance with the Company’s established Compensation and Bonus Policy. The Company reserves the right to amend the bonus scheme from time to time within the absolute discretion of the Company and the Board.

(c) Vacation. The Executive shall be eligible for paid vacation in accordance with the Company’s established Vacation Time Policy.

(e) Equity. Subject to approval by the Board of Directors of Holdings (the “Holdings Board”), and conditioned upon the filing of a Form S-8 registration statement by Holdings with respect to the Holdings 2021 Stock Incentive Plan (the “Stock Incentive Plan”), the Executive will be granted a combination of (i) stock options to purchase shares of Holdings common stock at a price equal to such stock’s fair market value on the date of grant and/or (ii) restricted stock units for shares of Holdings common stock having an aggregate fair value determined at the Closing (or at grant) equal to $1.5 million. The equity awards shall be subject to the Stock Incentive Plan and such additional terms and conditions, including time-based quarterly vesting over four (4) years following the Closing subject to the Executive’s continued employment, as shall be set forth in the applicable equity award agreement approved by the Holdings Board.

(g) Withholdings. All compensation payable to the Executive shall be subject to applicable taxes and withholdings.

9. Termination.

(i)

(ii)

(iii)

(d) “Good Reason” shall mean (i) without the written consent of the Executive, the relocation of the principal place at which the Executive provides services to the Company by thirty (30) miles, other than a direction that reduces the Executive’s daily commute, (ii) a material reduction in the authority, duties, or responsibilities of the Executive, or change in title or reporting without his consent; (iii) a material reduction of the Executive’s base salary without Executive’s prior consent, or (iv) a material breach of this Agreement by the Company after notice and the opportunity to cure specified below. Notwithstanding the foregoing, the parties agree that the addition of a Chief Technology Officer, Chief Strategy Officer, Chief Commercial Officer, Executive Vice President of Engineering or similar functionaries will not constitute an event giving rise to Good Reason. The Executive must (i) provide notice to the Company of the purported event giving rise to Good Reason within ninety (90) days after it occurs, (ii) provide the Company with thirty (30) days to cure, and (iii) if not cured, resign with Good Reason within thirty (30) days after the end of the cure period.

(x) delivered in full, or

(y) delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax,

To Executive:

At the address set forth in the Executive’s personnel file

To Company:

Rockley Photonics Inc.

Trust Center

1209 Orange Street

Wilmington, New Castle, DE 19801

or to such other address as a party from time to time may designate by notice to the other.

17. Section 409A.

19. 2013 Stock Plan Options. The parties agree and acknowledge that the stock options granted to the Executive under the Company’s 2013 Equity Incentive Plan (the “2013 Plan”) on May 20, 2015 (the “2015 Options”) are fully vested and were amended to extend the post-termination exercise period (except in the event the Executive is terminated for Cause, or due to death or disability) through the earliest of (i) May 19, 2025, (ii) the Executive’s violation of the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Executive and the Company, or (iii) such earlier termination upon a change in control event pursuant to the terms of the 2013 Plan. The parties further agree that the vesting and exercise period terms in the previous sentence will continue to apply to the 2015 Options, or any new stock options granted to Executive in exchange for the 2015 Options, following the Closing.

20. Miscellaneous.

(b) The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.


ROCKLEY PHOTONICS, INC.

By:		/s/ Andrew Rickman
		Name: Dr. Andrew George Rickman
		Title: Director

Date:		August 11, 2021

ROCKLEY PHOTONICS HOLDINGS INC.

By:		/s/ Andrew Rickman
		Name: Dr. Andrew George Rickman
		Title: Director



Date:		August 11, 2021

EXECUTIVE:

/s/ Amit Nagra

Amit Nagra



Date:		August 11, 2021

Exhibit 10.30

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

OF THE BOARD OF DIRECTORS

ROCKLEY PHOTONICS HOLDINGS LIMITED

Non-employee members of the board of directors (the “Board”) of Rockley Photonics Holdings Limited (the “Company”) shall be eligible to receive cash and equity compensation as set forth in this Non-Employee Director Compensation Policy (“Policy”). This Policy will be effective upon the closing of the business combination by and among SC Health Corporation, Rockley Photonics Limited, Rockley Mergersub Limited and the Company, and shall apply with respect to services rendered following such date. The cash compensation and equity grants described in this Policy shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, a “Non-Employee Director”), unless such Non-Employee Director declines the receipt of such cash compensation or equity grants by written notice to the Company. This Policy shall remain in effect until it is revised or rescinded by further action of the Board. The terms and conditions of this Policy shall supersede any prior cash or equity compensation arrangements between the Company and its directors.

Annual Cash Compensation

Commencing at the beginning of the first calendar quarter following the effective date of this Policy, each Non-Employee Director will receive the cash compensation set forth below for service on the Board. The annual cash compensation amounts will be payable in arrears following the end of each quarter in which the service occurred, pro-rated for any partial months of service. All annual cash fees are vested upon payment.

Annual Cash Retainer for Board Service

•

All Non-Employee Directors: $45,000

•

Lead Director: $23,000 (premium in addition to above)

Annual Cash Retainer for Committee Service

In addition, a Non-Employee Director shall be eligible to receive the following additional annual cash retainers for service in the following roles:

Committee Chair:

•

Audit: $20,000

•

Compensation: $15,000

•

Nominating and Corporate Governance: $10,000

Committee Member:

•

Audit: $10,000

•

Compensation: $7,500

•

Nominating and Corporate Governance: $5,000

Equity Compensation

Non-Employee Directors shall be granted the following restricted stock unit (“RSU”) awards under the Company’s 2021 Stock Incentive Plan or its successor (the “Plan”):

Annual Awards: On the first business day following the conclusion of each regular annual meeting of the Company’s shareholders, commencing with the 2022 annual meeting, each Non-Employee Director who will continue serving as a member of the Board thereafter shall receive a grant of RSUs (“Annual RSU Award”) under the Plan with respect to a number of shares of common stock having an aggregate fair market value as determined under the Plan equal to $162,000 calculated on the date of grant. In addition, if a Non-Employee Director is elected to the Board after the 2022 annual meeting of shareholders and other than at an annual meeting of shareholders, the Non-Employee Director shall receive an Annual RSU Award upon election to the Board that is prorated based upon the number of calendar days remaining before (1) the next annual meeting of shareholders, if scheduled, or (2) the date of the first anniversary of the last annual meeting of shareholders, if the next annual meeting is not yet scheduled.

Each Annual RSU Award shall become fully vested, subject to the applicable Non-Employee Director’s continued service as a director, on the earliest of the 12-month anniversary of the date of grant, the next annual meeting of shareholders following the date of grant or the consummation of a Change in Control (as defined in the Plan).

Initial Awards: Except as provided below, each Non-Employee Director who first joins the Board on or after the effective date of this Policy and who was not previously an employee of the Company or a parent or subsidiary thereof shall receive a grant of RSUs (“Initial RSU Award”) under the Plan on the date of his or her election to the Board with respect to a number of shares of common stock having an aggregate fair market value as determined under the Plan equal to $220,000 calculated on the date of grant. Subject to the applicable Non-Employee Director’s continued service as a director, the Initial RSU Award shall initially vest as to 1/3 of the total number of shares subject to the award on the earlier of the first anniversary of the date of grant or the next annual meeting of the Company’s shareholders, and in each of the next two calendar years following the year of the initial vesting date, 1/3 of the total number of shares shall vest on the earlier of the 12-month anniversary of the prior annual meeting of shareholders or the current year annual meeting of shareholders. Notwithstanding the foregoing, each Initial RSU Award shall become 100% vested if a Change in Control as defined in the Plan occurs during such Non-Employee Director’s service.

Each Non-Employee Director who joins the Board before the effective date of this Policy but will continue serving as a member of the Board thereafter will be treated for purposes of this Policy as having first joined the Board on the effective date of this Policy and shall therefore be eligible for an Initial RSU Award.

Each Non-Employee Director who is eligible for an Initial RSU Award but who joins the Board prior to the date that the RSUs have been registered under applicable U.S. securities laws will not receive the grant until such registration is effective, and such grant shall be subject to the Non-Employee Director’s continued service through such date of grant. However, for purposes of determining the number of shares of common stock subject to such Initial RSU Award and the applicable vesting schedule, the date on which the Non-Employee Director joins the Board (or if later, the effective date of this Policy) shall be treated as the date of grant of the award.

The RSUs shall be subject to the terms and conditions of the Plan (including the annual limits on non-employee director grants set forth in the Plan) and an RSU agreement, including attached exhibits, in substantially the same form approved by the Board for employee grants subject to the terms specified above.

Each Non-Employee Director may elect to defer 100% of their RSUs subject to the terms of a deferral program approved by the Board.

The Board may also approve other equity grants to Non-Employee Directors under the Plan in addition to or lieu of grants described in this Policy.

Expenses

The Company shall reimburse directors for reasonable and customary out-of-pocket expenses incurred by the directors in attending board and committee meetings and otherwise performing their duties and obligations as directors.

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

CERTIFICATION

I, Andrew Rickman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Rockley Photonics Holdings Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


By:		/s/ Andrew Rickman
		Andrew Rickman
		Chief Executive Officer (Principal Executive Officer)

Date: August 16, 2021

Exhibit 31.2

Certification Pursuant to Rules 13A-14(A) and 15d-14(A) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

CERTIFICATION

I, Mahesh Karanth, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Rockley Photonics Holdings Limited;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


By:		/s/ Mahesh Karanth
		Mahesh Karanth
		Chief Financial Officer (Principal Financial Officer)

Date: August 16, 2021

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

CERTIFICATION

Holdings Limited (the “Company”) on Form 10-Q for the period ending June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


By:		/s/ Andrew Rickman
		Andrew Rickman
		Chief Executive Officer (Principal Executive Officer)

Date: August 16, 2021

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

CERTIFICATION

In connection with the Quarterly Report of Rockley Photonics Holdings Limited (the “Company”) on Form 10-Q for the period ending June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


By:		/s/ Mahesh Karanth
		Mahesh Karanth
		Chief Financial Officer (Principal Financial Officer)

Date: August 16, 2021