Item 1.01. Entry Into a Material Definitive Agreement.

Private Placement of Convertible Senior Secured Notes due 2026

As previously announced, on October 24, 2022, Rockley Photonics Holdings Limited (the "Company") entered into a repurchase and subscription agreement (the "Repurchase and Subscription Agreement") with holders of its currently outstanding Convertible Senior Secured Notes due 2026 (the "Existing Notes") named therein, holders of its currently outstanding Senior Secured Notes due 2022 (the "Bridge Notes") and another investor (collectively, the "Purchasers"), relating to (i) the repurchase of all of the Bridge Notes and a portion of its outstanding Existing Notes in an aggregate original principal amount of $50.0 million (the "Specified Existing Notes") and (ii) the sale by the Company to the Purchasers of approximately $90.6 million aggregate original principal amount of a new series of Convertible Senior Secured Notes due 2026 (the "New Notes") with an initial conversion price of $0.6888 and warrants (the "Warrants") to purchase 131.6 million ordinary shares of the Company, $0.000004026575398 nominal value per share (the "Ordinary Shares"), at an exercise price of $1.1182 per share, subject to certain anti-dilution adjustments.

On October 25, 2022, the Company completed the repurchase of all of the Bridge Notes and the Specified Existing Notes and its sale to the Purchasers of the New Notes and Warrants pursuant to the Repurchase and Subscription Agreement. The New Notes are initially guaranteed by Rockley Photonics, Inc., Rockley Photonics Limited, Rockley Photonics Ireland Limited and Rockley Photonics Oy, each a wholly owned subsidiary of the Company (the "Guarantor Subsidiaries") and will be guaranteed by the Company's future subsidiaries (other than subsidiaries treated as excluded entities).

At the completion of the transactions described above (the "Closing"), the Company retained $10.0 million of the proceeds from the issuance of the New Notes and approximately $14.5 million of proceeds were placed in an escrow account (the "Escrow Account") with Wilmington Savings Fund Society, FSB ("WSFS"), to be released to the Company only at the direction of the requisite number of holders of New Notes.

Fourth Supplemental Indenture

In connection with the Closing, the Company and WSFS, as trustee and collateral agent (collectively, in such capacities, the "Existing Notes Trustee") , entered into the fourth supplemental indenture (the "Fourth Supplemental Indenture") to the indenture that governs the Existing Notes to revise certain terms of the Existing Notes to, among other things, (i) permit the issuance of the New Notes, (ii) allow for funds on deposit in the Escrow Account to be added to the amount of unrestricted cash and cash equivalents of the Company that it is required to maintain to satisfy the minimum cash and cash equivalent covenant thereunder and (iii) include as defaults thereunder the occurrence of a noteholder agreement default (as defined therein) and certain events related to the Intercreditor Agreement (as defined below).

Indenture and Issuance of New Notes

The New Notes were issued pursuant to an indenture (the "Indenture" and collectively with the "Existing Notes Indenture", the "Indentures"), dated as of October 25, 2022, among the Company, the Guarantor Subsidiaries, as guarantors, and WSFS, as trustee and collateral agent (collectively, in such capacities, the "Trustee"). The New Notes are super senior secured obligations of the Company and the Guarantor Subsidiaries secured by substantially all assets of each of the Company and each Guarantor Subsidiary. The liens securing the Existing Notes and related guarantees of the Guarantor Subsidiaries are contractually subordinated to the liens securing the New Notes and related guarantees of the Guarantor Subsidiaries pursuant to a collateral agency and intercreditor agreement (the "Intercreditor Agreement"), among the Company, the Guarantor Subsidiaries, as guarantors, and WSFS, acting as collateral agent on behalf of itself, the holders of the remaining Existing Notes under the Existing Notes Indenture and the holders of the New Notes under the Indenture and (in such capacity, the "Collateral Agent"), the Trustee as senior representative and the Existing Notes Trustee as junior representative . Interest on the New Notes is payable quarterly in arrears at a rate of 12.5% per annum if paid in cash or, subject to the satisfaction of certain conditions, at a rate of 15.0% per annum payable at a rate of 5.75% per annum in cash and 9.25% per annum through the issuance of additional New Notes ("PIK Interest"), which will also bear interest. Interest on the New Notes is payable quarterly in arrears on January 15, April 15, July 15 and October 15, commencing on January 15, 2023. The New Notes will mature on May 15, 2026 (the "Maturity Date") unless redeemed, repurchased or converted in accordance with their terms prior to such date.

The New Notes are convertible at an initial conversion price equal to $0.6888 per Ordinary Share (the "Conversion Price"). Holders of the New Notes have the right to convert all or a portion of their New Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, holders of the New Notes will receive Ordinary Shares and cash for fractional interests and an interest make whole payment for interest that would have accrued from the date of conversion until the Maturity Date, which interest

--------------------------------------------------------------------------------

make whole payment shall be paid in cash or subject to certain conditions, in Ordinary Shares at the Company's election; provided, however, until the earlier to occur of (x) the third business day prior to December 31, 2022 and (y) the approval by the shareholders of the Company to authorize the issuance of Ordinary Shares in connection therewith at less than the closing price of such Ordinary Shares on the trading day immediately preceding the date of the Repurchase and Subscription Agreement, if the Company would not be entitled to otherwise issue such shares in satisfaction of such interest make whole payment because the shares would be valued in accordance with the Indenture at less than such closing price, the holder who so converted all or a portion of its New Notes will be entitled to either (x) exercise an option under the Repurchase and Subscription Agreement to purchase additional New Notes and Warrants or (y) receive shares valued at such closing price, in each case, in the amount of cash that would otherwise have come due to such holder.

The Company may redeem the New Notes in whole, and not in part, at its option, at any time prior to the maturity date, for a cash purchase price equal to the aggregate principal amount of any New Notes to be redeemed plus accrued and unpaid interest thereon plus a make-whole premium as provided in the Indenture. At any time prior to the Maturity Date, the Company may also redeem the New Notes in whole, or from time to time in part, if the last reported sale price of the Ordinary Shares exceeds 250% of the conversion price then in effect for at least 20 trading days (which need not be consecutive), including at least one of . . .

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information required by Item 2.03 relating to the New Notes, the Warrants and the Indenture is contained in Item 1.01 of this Current Report and incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

On October 25, 2022, the Company sold approximately $90.6 million in aggregate original principal amount of the Notes and Warrants to purchase approximately 131.6 million Rockley Ordinary Shares to the Purchasers in a private placement in reliance on the exemption from the registration requirements of the Securities Act of 1933 (the "Securities Act") provided by Section 4(a)(2) of the Securities Act. The Company relied on this exemption from registration based in part on representations made by the Purchasers in the Repurchase and Subscription Agreement.

The information related to the issuance of the New Notes and Warrants contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference.

--------------------------------------------------------------------------------

Item 9.01. Financial Statements and Exhibits.



   Exhibit    Description
     No.
     4.1        Fourth Supplemental Indenture dated October 25, 2022 by and among the Company
              and Wilmington Savings Fund Society, FSB, as trustee (the "Existing Notes
              Trustee") and collateral agent (the "Collateral Agent"), to the indenture (as
              supplemented by that First Supplemental Indenture dated August 4, 2022, and Second
              Supplemental Indenture dated September 30, 2022), dated as of May 27, 2022, among
              the Company, each of the Guarantor Subsidiaries, the Existing Notes Trustee and
              the Collateral Agent.
     4.2        Form of Indenture (including form of New Note) by and among the Company, each of
              the Guarantor Subsidiaries and Wilmington Savings Fund Society, FSB, as trustee
              and collateral agent (incorporated by reference from Exhibit 4.1 to the
              Registrant's Current Report on Form 8-K filed October 25, 2022).
     4.3        Form of Warrants (incorporated by reference from Exhibit 4.2 to the Registrant's
              Current Report on Form 8-K filed October 25, 2022).
    10.1        Repurchase and Subscription Agreement dated as of October 24, 2022 by and
              between the Company, each of the Company's subsidiaries named therein and the
              Subscribers named therein (incorporated by reference from Exhibit 10.1 to the
              Registrant's Current Report on Form 8-K filed October 25, 2022).
    10.2        Form of Noteholder Agreement by and among the Company and the Purchasers named
              therein (incorporated by reference from Exhibit 10.2 to the Registrant's Current
              Report on Form 8-K filed October 25, 2022).
    10.3        Form of Registration Rights Agreement by and among the Company and the
              Subscribers named therein (incorporated by reference from Exhibit 10.3 to the
              Registrant's Current Report on Form 8-K filed October 25, 2022).

© Edgar Online, source Glimpses