Document:

Document

Exhibit 10.2

FORBEARANCE AGREEMENT
This Forbearance Agreement (this “Agreement”) is dated as of September 30, 2022, by and among Rockley Photonics Holdings Limited, an exempted company incorporated in the Cayman Islands (the “Issuer”), the subsidiaries of the Issuer party hereto as Guarantors, Wilmington Savings Fund Society, FSB, as trustee and collateral agent (collectively, in such capacities, the “Trustee”), and each beneficial owner of the Notes issued under the Indenture that is a signatory party hereto (each, a “Holder” and collectively, the “Holders”).
RECITALS
WHEREAS, the Issuer, the other Note Parties and Trustee have entered into an Indenture, dated as of May 27, 2022, as amended by that certain First Supplemental Indenture, dated as of August 4, 2022, between the Issuer and the Trustee (the “Existing Indenture”), that certain Second Supplemental Indenture, dated as of the date hereof, between the Issuer, the other Note Parties and the Trustee (the “Second Supplemental Indenture”, and the Existing Indenture, as amended by the Second Supplemental Indenture, as further amended, modified, restated, supplemented or otherwise modified from time to time (other than the Third Supplemental Indenture), the “Indenture”);
WHEREAS, the Issuer has requested that the Trustee and the Holders forbear from enforcing their rights against the Note Parties that arose because of certain Events of Default described on Exhibit A hereto (collectively, the “Specified Events of Default”) and, upon and subject to the terms and conditions set forth in this Agreement, the Trustee (as directed by the Holders) and the Holders are willing to forbear from enforcing their rights against the Note Parties that arose because of the Specified Events of Default; and
WHEREAS, this Agreement shall constitute a Note Document and these Recitals shall be construed as part of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree as follows:
1.    Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to such terms in the Indenture. The following capitalized terms shall have the meanings set forth below:
(a)    “Approved Forecast” means the initial or any subsequent amended Cash Flow Forecast approved by the Requisite Holders (or, if a Holder Representative has been designated, the Holder Representative).
(b)    “Bridge Notes” means those certain Notes to be issued under the Third Supplemental Indenture.
(c)    “Cash Flow Forecast” shall have the meaning specified in Section 6(a)(i).
(d)    “Forbearance Covenant Period” means the period beginning on the Second Supplemental Indenture Effective Date and ending on the date upon which the Refinancing Requirement has occurred.
(e)    “Forbearance Default” means (i) the occurrence of any Default or Event of Default other than the Specified Events of Default, (ii) the failure of the Note Parties to comply with any term, condition or covenant set forth in this Agreement, including Section 5, (iii) any 

representation made by the Note Parties under or in connection with this Agreement shall prove to be false in any material respect as of the date when made or (iv) the commencement of any proceeding (whether judicial, extra-judicial, administrative or otherwise) or the taking of any other action to liquidate the businesses of any Note Party, or any of their respective Subsidiaries or the property of any such Person, or reorganize any Note Party or any of the their respective Subsidiaries (through sale, merger or otherwise), including, without limitation, the appointment of a receiver or other custodian or the making of an assignment to an assignee for the benefit of creditors or other custodians.
(f)    “Forbearance Effective Date” has the meaning set forth in the first sentence of Section 5 of this Agreement.
(g)    “Forbearance Period” means the period beginning on the date of this Agreement and ending on the Forbearance Termination Date.
(h)    “Forbearance Termination Date” means the earlier to occur of (i) 5:00 p.m. (New York City time) on October 31, 2022; provided, that such date will automatically be extended to the Maturity Date upon satisfaction of the Refinancing Requirement, and (ii) the date upon which a Forbearance Default occurs.
(i)    “Refinancing Requirement” means, that the Bridge Notes have been redeemed, exchanged, or refinanced in full pursuant to Indebtedness on terms acceptable to the Requisite Holders.
(j)    “Strategic Milestones” has the meaning set forth in Section 6(c) of this Agreement.
(k)    “Third Supplemental Indenture” means that certain Third Supplemental Indenture, to be dated on or around September 30, 2022, between the Issuer, the Note Parties and the Trustee.
(l)    “Variance Report” shall mean a weekly variance report, covering the Weekly Test Period, in each case, setting forth for the week ended on the immediately preceding Friday prior to the delivery thereof (1) the variance (as compared to the Approved Forecast for such Weekly Test Period) of the actual aggregate operating cash receipts of the Issuer in the aggregate for the Weekly Test Period, (2) the variance (as compared to the Approved Forecast for such Weekly Test Period) of the aggregate operating disbursements made by the Issuer in the aggregate for the applicable Weekly Test Period and (3) an explanation, in reasonable detail, for any aggregate negative variance in excess of $250,000.00, certified by an Officer of the Issuer.
(m)    “Waiver and Consent Agreement” means that certain Waiver and Consent Agreement, to be dated on or around September 30, 2022, between the Issuer, the Note Parties, and the Trustee, which shall, among other things, modify the Indenture to remove the requirement to comply with Section 4.17 (Minimum Liquidity Covenant) of the Indenture.
(n)    “Weekly Test Period” means, at any time, each weekly period ended on a Friday; provided that the first Weekly Test Period after the Forbearance Effective Date shall be the period from the Forbearance Effective Date until the Friday of the first full week following the Forbearance Effective Date.
2.    Agreement to Forbear.
			
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(a)    Solely during the Forbearance Period, the Trustee (as directed by the Holders) and the Holders hereby agree to forbear from accelerating the Notes or otherwise exercising any of their rights or default remedies or enforcement actions against the Note Parties (but not any other Person) that may exist by virtue of the Specified Events of Default under the Indenture or any of the other Note Documents and each of the undersigned Holders hereby authorizes and directs the Trustee to execute and deliver this Agreement
(b)    Nothing in this Agreement shall be construed as a waiver of or acquiescence to the Specified Events of Default, which Specified Events of Default shall continue in existence notwithstanding the agreement of the Trustee and the Holders, as set forth herein, to forbear from accelerating the Notes or otherwise exercising any of their rights or default remedies or enforcement actions against the Note Parties (but not any other Person) on the terms and for the period set forth herein. Except as expressly provided herein, the execution and delivery of this Agreement shall not: (i) constitute an extension, modification, or waiver of any term or aspect of the Indenture or the other Note Documents; (ii) extend the terms of the Indenture or the due date of any of the Note Obligations; (iii) give rise to any obligation on the part of the Trustee or the Holders to extend, modify or waive any term or condition of the Indenture or any of the other Note Documents; or (iv) give rise to any defenses or counterclaims to the right of the Trustee or the Holders to compel payment of the Note Obligations or to otherwise enforce their rights or default remedies or enforcement actions under the Indenture and the other Note Documents. Except as expressly limited herein, the Trustee and the Holders hereby expressly reserve all of their rights and remedies under the Note Documents and under applicable law with respect to the Specified Events of Default. From and after the Forbearance Termination Date, the Trustee and the Holders shall be entitled to enforce the Note Documents according to the terms thereof.
3.    Representations and Warranties of the Note Parties.  The Note Parties hereby represent and warrant as follows:
(a)    All representations and warranties of each of the Note Parties in the Indenture and the other Note Documents to which it is a party are incorporated herein in full by this reference and are true and correct in all material respects as of the date hereof.
(b)    After giving effect to this Agreement, no Default or Events of Default has occurred and is continuing (other than the Specified Events of Default).
(c)    Each of the Note Parties has the power, and has been duly authorized by all requisite action, to execute and deliver this Agreement and the other documents and agreements executed and delivered in connection herewith to which it is a party. This Agreement has been duly executed by each of the Note Parties and the other documents and agreements executed and delivered in connection herewith to which any of the Note Parties is a party have been duly executed and delivered by each of them.
(d)    This Agreement is the legal, valid and binding obligation of each of the Note Parties and the other documents and agreements executed or delivered in connection herewith to which any of the Note Parties is a party are the legal, valid and binding obligations of the Note Parties, in each case enforceable against each of the Note Parties in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights generally.
(e)    The execution, delivery and performance of this Agreement and the other documents and agreements executed and delivered in connection therewith do not and will not (i) violate any law, rule, regulation or court order to which any of the Note Parties is subject; (ii) 
			
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conflict with or result in a breach of the certificate of formation or incorporation, bylaws, limited liability company agreement or other organizational documents of any of the Note Parties or any other agreement or instrument to which it is party or by which the properties of any of the Note Parties is bound; or (iii) result in the creation or imposition of any Lien on any property of any of the Note Parties, whether now owned or hereafter acquired, other than Liens in favor of the Collateral Agent.
(f)    No consent or authorization of, filing with or other act by or in respect of any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by each of the Note Parties, or the validity or enforceability, of this Agreement or the other documents or agreements executed or delivered in connection herewith to which any of the Note Parties is a party, or the consummation of the transactions contemplated hereby or thereby, or the continuing operations of any of the Note Parties following the consummation of such transactions.
(g)    There is no pending or, to the knowledge of any of the Note Parties after due inquiry, threatened litigation, proceeding, inquiry or other action (i) seeking an injunction or other restraining order, damages or other relief with respect to the transactions contemplated by this Agreement and the other documents and agreements executed or delivered in connection herewith or (ii) which affects or could affect the business, prospects, operations, assets, liabilities or condition (financial or otherwise) of any of the Note Parties, except, in the case of clause (ii), where such litigation, proceeding, inquiry or other action could not cause a Material Adverse Effect.
4.    Representations by the Holders; Holder Direction.  Each of the Holders on its own behalf and as to itself, hereby represents to the Note Parties and the Trustee as of the date hereof as follows:
(a)    Execution and Delivery. This Agreement has been validly executed and delivered by such Holder separately and not jointly.
(b)    Ownership.  Such Holder (i) is the beneficial owner of the aggregate principal amount of Notes under the Indenture set forth below its name on its signature hereto, and/or (ii) has, with respect to the beneficial owners of such Notes, (A) sole investment or voting discretion with respect to such Notes, (B) full power and authority to vote on and consent to matters concerning such Notes, and (C) full power and authority to bind or act, on the behalf of, such beneficial owners. 
(c)    Authorization; No Conflicts; No Consent. Such Holder’s execution, delivery and performance of this Agreement (i) has been duly authorized by all necessary action on the part of such Holder, (ii) does not (A) contravene, breach or conflict with such Holder’s constituent or organizational documents or (B) violate any applicable requirement of law or any order, material contract concerning operations, or undertaking to which such Holder or any of its subsidiaries is a party or by which any of their properties is or may be bound, and (iii) does not and will not require either consent or approval of any regulatory authority or governmental authority or agency having jurisdiction over such Holder, or any other person or entity, which has not already been obtained.
(d)    Enforceability.  This Agreement is the legal, valid, and binding obligation of such Holder and is enforceable against such Holder in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
			
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(e)    Direction to Trustee.  By each Holder’s execution and delivery of this Agreement, each Holder hereby directs the Trustee pursuant to Section 6.09 of the Indenture not to accelerate the Notes, exercise default remedies, or take any enforcement action under the Indenture or any of the other Note Documents in respect of the Specified Events of Default during the period from the Forbearance Effective Date to the Forbearance Termination Date, and each Holder agrees that such direction shall not be amended, modified, revoked, or superseded during such period without the Note Parties’ prior written consent.
(f)    Collective Ownership.  Assuming the accuracy of each other Holder’s representation in Section 4(b) hereof, such Holder and each other Holder collectively beneficially own 100% of the aggregate principal amount of the Notes.
5.    Conditions to Effectiveness.  This Agreement shall not be effective unless and until the date when each of the following conditions shall have been satisfied in the sole discretion of the Trustee and the Holders, as applicable (such date, the “Forbearance Effective Date”):
(a)    Each of the parties hereto shall have delivered to the Trustee executed counterparts of this Agreement.
(b)    Receipt, from funds paid by the Holders into escrow, by the Trustee of payment of all outstanding fees and expenses (including counsel fees and expenses) payable to the Trustee, and payment to the Trustee and each Holder of all fees and expenses in connection with the execution and delivery of this Agreement and any other documents or agreements executed in contemplation hereof, including without limitation, the fees and expenses of the Trustee’s and each Holder’s counsel.
(c)    Delivery to the Trustee and the Holders of such other agreements, documents or instruments as Trustee may reasonably request (as directed by the Holders) in form and substance satisfactory to the Trustee, as to its rights, duties and obligations, and the Holders in their sole discretion.
(d)    The Issuer shall have delivered the initial Approved Forecast to the Holders.
(e)    The Issuer shall have engaged a Company Financial Advisor by way of written agreement on terms acceptable to the Requisite Holders in compliance with the terms of Section 6(b)(i) below; it being understood and agreed that the engagement letter with Alvarez & Marsal Cayman Islands Limited is acceptable to the Requisite Holders without modification (the “A&M Engagement Letter”).
(f)    No event that would constitute a Forbearance Default shall have occurred and be continuing as of the Forbearance Effective Date.
(g)    The Trustee and the Issuer shall have executed and delivered the following:
(i)    Waiver and Consent Agreement;
(ii)    Second Supplemental Indenture; and
(iii)    Third Supplemental Indenture relating to the Bridge Notes.
The Trustee, when authorized and directed by the Holders, shall declare this Agreement to be effective and declare the occurrence of the Forbearance Effective Date when all of the conditions set 
			
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forth in this Section 5 have been satisfied.  Such declaration shall be final, conclusive and binding upon all parties to this Agreement for all purposes. 
6.    Additional Covenants of the Issuer.  In consideration of the Trustee and the Holders entering into this Agreement in accordance with the terms and conditions hereof, the Issuer hereby covenants and agrees that the Issuer shall at all times during the Forbearance Covenant Period comply with each of the following covenants, it being understood by the parties that the failure to do so will immediately constitute the occurrence of a Forbearance Default:
(a)    Reporting.
(i)    No later than 3:00 p.m. New York City time on the Friday each calendar week, commencing with the Friday of the first week following the week in which the Forbearance Effective Date occurs the Issuer shall deliver to the Holders a rolling 13-week cash flow forecast (a “Cash Flow Forecast”), with the initial Cash Flow Forecast agreed between the Issuer and the Holders (the “Approved Forecast”). The Issuer may amend, supplement, or replace the then-current Approved Forecast, and once such Cash Flow Forecast is approved by the Requisite Holders (or, if a Holder Representative has been designated, the Holder Representative), such amended Cash Flow Forecast shall constitute the current Approved Forecast. Unless and until any such proposed amended, supplemented or replacement Cash Flow Forecast is so approved, the then-current form of the Approved Forecast shall remain in effect. At any time during the Forbearance Period, a Holder may decline to receive such forecasts in their sole discretion by delivery of advance written notice to the Issuer and such election shall remain in effect until the Holder notifies the Issuer by delivery of advance written notice that it would like to receive subsequent forecasts;
(ii)    Variance Reporting.  Beginning with the delivery of the initial Variance Report and tested, as of the last day of each applicable Weekly Test Period, commencing with the last day of the first Weekly Test Period ending after the Forbearance Effective Date, for such initial Weekly Test Period, and for each Weekly Test Period thereafter, (i) the variance (as compared to the Approved Forecast) of the actual operating cash of the Issuer; and (ii) the negative variance (as compared to the Approved Forecast) of the aggregate operating disbursements made by the Issuer, shall not, on a cumulative basis, exceed 15%.
(iii)    No later than 2:00 p.m. New York City time on the Thursday of the first week after each Weekly Test Period (commencing with the Friday of the first week after the first Weekly Test Period ending following the Forbearance Effective Date), the Issuer shall deliver to the Holders (and, if one has been appointed, the Holder Representative), a Variance Report for the immediately preceding Weekly Test Period; provided that each Holder may decline to receive such Variance Reports in their sole discretion by delivery of advance written notice to the Issuer and such election shall remain in effect until the Holder notifies the Issuer by delivery of advance written notice that it would like to receive subsequent Variance Reports.  Each such Variance Report shall be certified by an Officer of the Issuer as being prepared in good faith and fairly presenting in all material respects the information set forth therein;
(iv)    Hold conference calls with the Issuer, the Company Financial Advisor (as defined below), the Holders, and, if appointed, the Holder Representative (x) on a weekly basis on Fridays at 1:00 p.m. New York City time and (y) as requested upon reasonable prior notice by the Requisite Holders (or if a Holder Representative has been appointed, the Holder Representative), during normal business hours, to discuss the Issuer’s current and projected operational performance, strategic process and any related financial matters; provided that each Holder may decline to participate in such calls in their sole discretion; and
			
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(v)    If requested by the Requisite Holders, provide the Holders (and any Holder Representative) (x) a reasonably detailed cost cutting business plan prepared by the Company Financial Advisor, and (y) such other analyses of the Issuer’s business, prospects, or strategic plans as reasonably requested by the Requisite Holders, in each case in a form and substance reasonably satisfactory to the Requisite Holders; provided that each Holder may decline to receive such business plan in their sole discretion by delivery of advance written to the Issuer and such election shall remain in effect until the Holder notifies the Issuer by delivery of advance written notice that it would like to receive such business plan.
(b)    Company Advisors.
(i)    No later than September 20, 2022, the Note Parties shall have countersigned an engagement letter, in form and substance reasonably acceptable to the Trustee (as directed by Requisite Holders (or if a Holder Representative has been appointed, the Holder Representative), including as to scope and terms of engagement, providing for the retention of a financial advisor by the Note Parties (the “Company Financial Advisor”), and such financial advisor (or a prompt replacement satisfactory to the Requisite Holders) shall be retained during the Forbearance Period on substantially similar terms.  Each of the Note Parties shall cooperate with the Company Financial Advisor and make management of the Issuer available thereto, and the Company Financial Advisor and the Issuer’s other advisors shall be authorized and directed to deliver to the Holders (and if a Holder Representative has been appointed, the Holder Representative) all reports and analysis prepared by the Company Financial Advisor or such other advisors for the Note Parties and any other reports or analysis which the Holders (and if a Holder Representative has been appointed, the Holder Representative) may reasonably request from the Company Financial Advisor or the Issuer’s other advisors from time to time; provided that (x) the Issuer (with respect to the Company Financial Advisor) and Company Financial Advisor (with respect to the Trustee and Holders) shall not be required to provide access to or disclose information that it determines in good faith could jeopardize any attorney client privilege of, or conflict with any confidentiality requirements applicable to, the Issuer or any of its Subsidiaries, or would be prohibited by applicable law, and (y) any visits, due diligence requests or inspections shall not unreasonably interfere with the business of the Issuer and its Subsidiaries; provided that each Holder may decline to receive such reports and analysis in their sole discretion by delivery of advance written to the Issuer and the Company Financial Advisor or the Issuer’s other advisors and such election shall remain in effect until the Holder notifies the Issuer and the Company Financial Advisor or the Issuer’s other advisors by delivery of advance written notice that it would like to receive subsequent reports and analysis. The engagement letter for Company Financial Advisor, other than the A&M Engagement Letter, shall specifically provide, among other things, that (1) the Trustee, the Holder Representative and the Holders shall be permitted to meet and speak directly with Company Financial Advisor from time to time without the Issuer present at such meetings or a party to any such calls and (2) Issuer shall be required to pay all fees and expenses of Company Financial Advisor promptly and in any event no later than three (3) business days after the receipt of summary invoices with respect thereto.
(ii)    No later than October 7, 2022 (or such longer period acceptable to the Requisite Holders in their sole discretion (or if a Holder Representative is in place, Holder Representative in its sole discretion), the Note Parties shall have countersigned an engagement letter, in form and substance (including the parties thereto) acceptable to the Requisite Holders in their sole discretion (or if a Holder Representative is in place, Holder Representative in its sole discretion), including as to scope and terms of engagement, providing for the retention of an advisor to review Issuer’s strategic alternatives (the “Company Strategic Advisor”), and such strategic advisor (or a prompt replacement satisfactory to the Requisite Holders in their sole discretion) shall be retained during the Forbearance Period on substantially similar terms. Each of the Note Parties shall cooperate with the Company Strategic Advisor and make management of the Issuer available thereto, 
			
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and the Company Strategic Advisor shall be authorized and directed to deliver to the Holders (and any Holder Representative) all reports and analysis prepared by the Company Strategic Advisor for the Note Parties and any other reports or analysis which the Holders (and any Holder Representative) may request from the Company Strategic Advisor and Issuer’s other advisors from time to time including a written update on the strategic process immediately prior to the weekly meeting set forth in Section 6(a)(v) above in form and substance acceptable to the Requisite Holders in their sole discretion (or if a Holder Representative is in place, the Holder Representative in its sole discretion); provided that each Holder may decline to receive such updates, reports and analysis in their sole discretion by delivery of advance written to the Issuer and the Company Strategic Advisor and such election shall remain in effect until the Holder notifies the Issuer and the Company Strategic Advisor by delivery of advance written notice that it would like to receive subsequent updates, reports and analysis. 
(c)    Strategic Milestones.  The Issuer, the Company Strategic Advisor, and the Holders (and if a Holder Representative is in place, the Holder Representative) shall work together to establish milestones acceptable to the Requisite Holders in their sole discretion (or if a Holder Representative is in place, the Holder Representative in its sole discretion) for the strategic alternatives process set forth in Section 6(b)(ii) above (the “Strategic Milestones”). The Strategic Milestones will be finalized and documented no later than seven days after the Note Parties countersign the engagement letter set forth in Section 6(b)(ii).  The Note Parties shall have satisfied each of the Strategic Milestones on or before the dates set forth in the definitions related thereto (or such longer period acceptable to the Requisite Holders in their sole discretion (or if a Holder Representative is in place, the Holder Representative in its sole discretion).
The Issuer further agrees and acknowledges that the failure to satisfy any of the covenants set forth above in this Section 6 shall, upon written notice from Trustee (as directed by the Requisite Holders) or the Requisite Holders, constitute an immediate Event of Default and enable the Trustee and the Holders to exercise all rights and remedies under the Note Documents and applicable law; provided, however, that with respect to any Event(s) of Default that can be cured, the Issuer shall have (y) three (3) calendar days to cure any such Event(s) of Default associated with the failure to satisfy any of the covenants set forth above in this Section 6; and (z) the number of days provided for under the Indenture to cure any other Event(s) of Default.
7.    Holder Representative.
(a)    At any time during the Forbearance Period, the Requisite Holders may appoint a  holder representative (the “Holder Representative”), which shall have authority, as representative and agent of the Holders, to approve any Cash Flow Forecast or to approve the terms and scopes of the engagements of the Company Financial Advisor and Company Strategic Advisor and to the extent, necessary or desirable by the Requisite Holders, any other decision requested by the Issuer which is based upon material non-public information of the Issuer (“MNPI”)  that the Holders do not wish to receive such MNPI (in each case, a “Consent”).  If appointed, in reviewing a transaction submitted to it, the Holder Representative will give its Consent if the Holder Representative determines that the terms of the transaction are consistent with the terms that would reasonably be expected in a comparable transaction between unrelated parties.  It is understood and agreed that as of the date hereof no Holder Representative has been appointed and none will be appointed until such time as the Requisite Holders so designate in writing to the Issuer and the Trustee.
(A)    If appointed, in determining whether to give or withhold Consent, the Holder Representative shall be absolutely protected in relying on information provided to it by the Issuer, its affiliates or its representatives without need of independent inquiry by the Holder Representative.
			
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(B)    Any Person serving as the Holder Representative may be removed at any time by Requisite Holder vote.  Any Person serving as the Holder Representative may also resign at any time.  In the case of any such removal or resignation, a replacement Holder Representative shall be designated.  No such removal shall affect the validity of any Consent given by the Holder Representative prior to the removal of any such Person.
(C)    Each Person serving as Holder Representative shall be entitled to reimbursement of expenses, compensation and indemnification from the Issuer.
(D)    The Holders agree (and any future Holder Representative shall agree at the time of appointment) that the Issuer shall be fully protected in relying upon Consent given or withheld to a proposed transaction from the Holder Representative, and shall have no liability for entering into any transaction for which Consent has been received or for not entering into any transaction for which Consent has been withheld by the Holder Representative. 
(E)    The Holders may, at the expense of the Issuer, retain an independent financial advisor to serve as the Holder Representative; provided, that in such circumstances where an independent financial advisor will serve as the Holder Representative, the individual or entity designated as the Holder Representative must be acceptable to all Holders.
8.    Reaffirmation; No Novation.  The Indenture, the other Note Documents and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed. Each Note Party (i) agrees that, except as specifically provided herein, this Agreement and the transactions contemplated hereby shall not limit or diminish the obligations of the Note Parties arising under or pursuant to the Indenture or the other Note Documents to which it is a party, (ii) reaffirms its obligations under the Indenture the, Note Security Documents and each and every other Note Document to which it is a party and (iii) reaffirms all Liens on the Collateral which have been granted by it in favor of the Collateral Agent pursuant to any of the Note Documents, and all filings made with a governmental authority in connection therewith.  This Agreement is not intended to and shall not constitute a novation of the Note Documents or the Note Obligations created thereunder or any other obligations. 
9.    Release.
(a)    In consideration of the agreements of the Trustee and the Holders set forth herein, each of the Note Parties hereby releases, remises, acquits and forever discharges the Trustee and the Holders, and each of their respective employees, agents, representatives, consultants, attorneys, officers, directors, partners, fiduciaries, predecessors, successors and assigns, subsidiary corporations, parent corporations and related corporate divisions (collectively, the “Released Parties”), from any and all actions, causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages and expenses of any and every character, known or unknown, direct or indirect, at law or in equity, of whatever nature or kind, whether heretofore or hereafter arising, for or because of any matter of things done, omitted or suffered to be done by any of the Released Parties prior to and including the date of execution hereof, and in any way directly or indirectly arising out of any or in any way connected to this Agreement, the Indenture or the Note Documents (collectively, the “Released Matters”). Each of the Note Parties hereby acknowledges that the foregoing releases in this Agreement are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Released Matters. Each of the Note Parties hereby represents and warrants to the Trustee and any Holder that it has not purported to transfer, assign or otherwise convey any right, title or interest in any Released Matter to any other Person and that the foregoing constitutes a full and complete release of all Released Matters.
			
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EACH OF THE NOTE PARTIES AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED, WAIVED AND DISCHARGED BY THIS AGREEMENT. EACH OF THE NOTE PARTIES WAIVES AND RELEASES ANY RIGHT OR DEFENSE WHICH IT MIGHT OTHERWISE HAVE UNDER ANY OTHER LAW OR ANY APPLICABLE JURISDICTION WHICH MIGHT LIMIT OR RESTRICT THE EFFECTIVENESS OR SCOPE OF ANY OF ITS WAIVERS OR RELEASES HEREUNDER.
10.    Covenant Not to Sue.  Each of the Note Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each of the Released Parties that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any Released Matters released, remised and discharged by such Person pursuant to Section 8 above. If each of the Note Parties or any of their respective successors, assigns or other legal representatives violates the foregoing covenant, both the Person violating such covenant and the Note Parties, on a joint and several basis, shall be obligated to pay, in addition to such other damages as any Released Party may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Released Party as a result of such violation.
11.    Reviewed by Attorneys.  Each Note Party represents and warrants to the Trustee and the Holders that it (a) understands fully the terms of this Agreement and the consequences of the execution and delivery of this Agreement, (b) has been afforded an opportunity to have this Agreement reviewed by, and to discuss this Agreement and the documents executed in connection herewith, with such attorneys and other persons and advisors as such Note Party may wish, and (c) has entered into this Agreement and executed and delivered all documents in connection herewith of its own free will and accord and without threat, duress or other coercion of any kind by any Person. The parties hereto acknowledge and agree that neither this Agreement nor any of the other documents executed pursuant hereto shall be construed more favorably in favor of one party over the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the negotiation and preparation of this Agreement and the other documents executed pursuant hereto or in connection herewith.
12.    Acknowledgement.
(a)    Acknowledgement of Obligations.  The Issuer hereby acknowledges, confirms and agrees that as of the opening of business on the date hereof, the Issuer is indebted to the Holders in the following principal amounts for the following Notes and Obligations: (i) a total outstanding aggregate principal balance of the Notes in the amount of $78,456,000.
(b)    Acknowledgment of Specified Events of Default.  The Issuer hereby acknowledge that the Specified Events of Default have occurred and are continuing, have not been waived by the Trustee or the Holders, and that the Trustee and the Holders have expressly reserved all of their rights and remedies under the Note Documents and under applicable laws with respect to the Specified Events of Default.
13.    Notices.  Any notice to be provided under this Agreement shall be sent in accordance with the notice provisions set forth in the Indenture; provided, however, that any notice to be provided under this Agreement to any Holder shall be sent to the address of each Holder as such Holder may provide to the Issuer in accordance with the notice provisions set forth in the Indenture.
			
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14.    Miscellaneous.
(a)    Successors and Assigns.  This Agreement shall be binding on and shall inure to the benefit of the Note Parties, the Trustee, and the Holders and their respective successors and assigns, except as otherwise provided herein. No Note Party may assign, transfer, hypothecate or otherwise convey its rights, benefits, obligations or duties hereunder without the prior express written consent of Trustee and the Requisite Holders. The terms and provisions of this Agreement are for the purpose of defining the relative rights and obligations of the Note Parties, the Trustee, and the Holders with respect to the transactions contemplated hereby and there shall be no third party beneficiaries of any of the terms and provisions of this Agreement.
(b)    Entire Agreement.  This Agreement, including all schedules and other documents attached hereto or incorporated by reference herein or delivered in connection herewith, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all other understandings, oral or written, with respect to the subject matter hereof.
(c)    Fees and Expenses.  The Issuer agrees to pay on demand all fees, costs, and expenses incurred by the Trustee and the Holders in connection with the preparation, execution, analysis, negotiation, delivery, and/or enforcement of this Agreement.
(d)    Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
(e)    Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
(f)    Conflict of Terms.  Except as otherwise provided in this Agreement, if any provision contained in this Agreement is in conflict with, or inconsistent with, any provision in any of the other Note Documents, the provision contained in this Agreement shall govern and control.
(g)    Counterparts.  This Agreement may be executed in any number of separate counterparts, each of which shall collectively and separately constitute one agreement. Delivery of an executed signature page to this Agreement by telecopy shall be effective as delivery of a manually executed signature page to this Agreement.
(h)    Incorporation of Indenture.  The provisions contained in Section 18.04 and Section 18.12 of the Indenture are incorporated herein by reference to the same extent as if reproduced herein in their entirety, except with reference to this Agreement rather than the Indenture.
(i)    Rights of the Trustee.  The Trustee is entering into this Agreement at the direction of the Holders solely in its capacity as Trustee and Collateral Agent, and not in its individual or corporate capacity, and in taking (or refraining from) any actions under or pursuant to this Agreement, the Trustee shall be protected by and shall enjoy all of the rights, immunities, privileges, protections and indemnities granted to it under the Indenture and the other Note Documents in all of its capacities thereunder, and in so doing the Trustee shall not be responsible for the terms or sufficiency of this Agreement for any purpose. Notwithstanding anything to the contrary herein, the Trustee shall exercise all rights and remedies hereunder and provide any consents, directions, approvals, acceptances, determinations, rejections or other similar actions pursuant to this Agreement in accordance with directions received from the Requisite Holders, and the Trustee shall 
			
	11

have no liability for taking any such actions or failing to take any such actions in accordance with such directions and shall not be liable for any failure or delay in taking such actions resulting from any failure or delay by the Requisite Holders in providing such directions. Anything  herein to the contrary notwithstanding, whenever reference is made in this Agreement to any action by, consent, designation, specification, requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by the Trustee or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction or other exercise of discretion, rights or remedies to be made (or not to be made) by the Trustee, it is understood that in all cases the Trustee shall be acting, giving, withholding, suffering, omitting, taking or otherwise undertaking and exercising the same (or shall not be undertaking and exercising the same) as directed by the Requisite Holders.
[signature page follows]
			
	12

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as of the day and year first above written.

						
		ROCKLEY PHOTONICS HOLDINGS LIMITED, as Issuer 
By:_/s/ William Huyett__________________
Name:  William Huyett
Title:  Director
ROCKLEY PHOTONICS LIMITED, as a Guarantor
By:__/s/ Ciaran Rooney_________________
Name:  Ciaran Rooney
Title:  Director
ROCKLEY PHOTONICS, INC., as a Guarantor
By:__/s/ Averil Finn____________________
Name:  Averil Finn
Title:  Corporate Secretary

ROCKLEY PHOTONICS IRELAND LIMITED, as a Guarantor
By:_/s/ Ciaran Rooney__________________
Name:   Ciaran Rooney
Title:  Attorney

ROCKLEY PHOTONICS OY, as a Guarantor
By:__/s/ Markku Hirvonen ______________
Name:  Markku Hirvonen
Title:  Director
 

[Signature Page to Forbearance Agreement]

			
	14

						
		WILMINGTON SAVINGS FUND SOCIETY, FSB, as
Trustee and as Collateral Agent
By:    /s/ Raye Goldsborough        
Name:   Raye Goldsborough
Title:  Vice President

			
	15

WHITEBOX MULTI-STRATEGY PARTNERS, LP
Holder of $8,000,000 principal amount of Notes
By:__/s/ Andrew Thau__________________
Name:   Andrew Thau
Title:   Legal Analyst

WHITEBOX RELATIVE VALUE PARTNERS, LP
Holder of $5,500,000 principal amount of Notes
By:___/s/ Andrew Thau__________________
Name:   Andrew Thau
Title:   Legal Analyst

WHITEBOX GT FUND, LP
Holder of $1,000,000 principal amount of Notes
By:___/s/ Andrew Thau__________________
Name:   Andrew Thau
Title:   Legal Analyst

PANDORA SELECT PARTNERS, LP
Holder of $500,000 principal amount of Notes
By:__/s/ Andrew Thau___________________
Name:   Andrew Thau
Title:   Legal Analyst

			
	16

HIGHBRIDGE TACTICAL CREDIT MASTER FUND, L.P.
Holder of $9,839,000 principal amount of Notes
By: Highbridge Capital Management, LLC, as Trading Manager and not in its individual capacity
By:__/s/ Jonathan Segal__________________
Name: Jonathan Segal
Title: Managing Director, Co-Chief Investment Officer

			
	17

ROC SPV XIX LLC
Holder of $33,617,000 principal amount of Notes
By: ATW Partners Opportunities Management LLC, its manager
By:__/s/ Antonio Ruiz- Gimenez ___________
Name: Antonio Ruiz- Gimenez
Title:   Managing Member
By:_/s/ Kerry Propper ____________________
Name: Kerry Propper
Title:   Managing Member

			
	18

WAZEE STREET OPPORTUNITIES FUND V LP
Holder of $20,000,000 principal amount of Notes
By: WSOF V GP LLC, its general partner
By:__/s/ R. Michael Collins_______________
Name: R. Michael Collins
Title:   President

			
	19

EXHIBIT A
SPECIFIED EVENTS OF DEFAULT
1.    Failure to comply with the Section 4.17 (Minimum Liquidity Covenant) of the Indenture as of September 1, 2022.
2.    Failure to provide timely notice to the Trustee of the failure to comply with Section 4.17 (Minimum Liquidity Covenant) of the Indenture.cosm_ex41.htm

EXHIBIT 4.1  
  
 NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
  
 EXCHANGE WARRANT
  
 COSMOS HOLDINGS INC.
  
 	 Warrant Shares: 
	 Original Issuance Date: October [•], 2022

	 EW: No.: ___
	  

  
 THIS EXCHANGE WARRANT (this “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after October [•], 2022 (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on October [•], 2027 (the “Termination Date”) but not thereafter, to subscribe for and purchase from COSMOS HOLDINGS INC., a corporation incorporated under the laws of the State of Nevada (the “Company”), up to ______ shares of Common Stock, par value $0.001 per share (the “Common Shares”), of the Company (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
  
 Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Warrant Exchange Agreement (the “Exchange Agreement”), dated October [•], 2022, among the Company and the purchasers signatory thereto.
  
 Section 2. Exercise.
  
 a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrants available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
  
 	 
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 For the avoidance of doubt, there is no circumstance that would require the Company to net cash settle the Warrants.
  
 b) Exercise Price. The exercise price under this Warrant shall be $[•] per share, subject to adjustment hereunder (the “Exercise Price”).
  
 c) Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrants to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
  
 	  
	 (A)
	 =
	 as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (x) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (y) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

	  
	  
	  
	  

	  
	 (B)
	 =
	 the Exercise Price, as adjusted hereunder; and

	  
	  
	  
	  

	  
	 (X)
	 =
	 the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

  
 	 
	2
	

	 

  
 If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
  
 “Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the VWAP of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
  
 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
  
 d) Mechanics of Exercise.
  
 i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Shares Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, at the option of the Holder either (A) in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until the earlier of such Warrant Shares being delivered or Holder rescinds such exercise or (B) the amount pursuant to a Buy-In pursuant to Section 2(d)(iv) hereof. The Company agrees to maintain a registrar (which may be the Depositary) that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Exchange Agreement, the Company agrees to deliver, or cause to be delivered, the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
  
 	 
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 ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
  
 iii. Rescission Rights. If the Company fails to cause the Depositary to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
  
 iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Depositary to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Warrant Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common stock upon exercise of the Warrant as required pursuant to the terms hereof.
  
 	 
	4
	

	 

  
 v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
  
 vi. Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Depositary fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
  
 vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
  
 	 
	5
	

	 

  
 e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates, (ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership of the shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section 13(d) (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock underlying the Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of the Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Depositary setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be [4.99%/9.99%] of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Warrant Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration is owing to the Holder.
  
 	 
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 Section 3. Certain Adjustments.
  
 a) Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse share split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares 7of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant remains unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
  
 b) [RESERVED]
  
 c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
  
 d) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
  
 	 
	7
	

	 

  
 e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the Company’s assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of shares of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding shares of Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of shares of Common Stock or any compulsory share exchange pursuant to which the shares of Common Stock are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of shares of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within thirty (30) days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder, as described below, an amount of consideration equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction. The consideration paid to the Holder from the Company or any Successor Entity shall be the same type or form of consideration (and in the same proportion), valued at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of shares of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of shares of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of shares of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of shares of Common Stock will be deemed to have received shares of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public announcement of such contemplated Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the Company shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
  
 	 
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 f) [RESERVED]
  
 g) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share of Common Stock, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
  
 h) Notice to Holder.
  
 i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
  
 ii. Notice to Allow Exercise by Holder. If (A) the Company declares a dividend (or any other distribution in whatever form) on the shares of Common Stock, (B) the Company declares a special nonrecurring cash dividend on or a redemption of the shares of Common Stock, (C) the Company authorizes the granting to all holders of the shares of Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company is required in connection with a Fundamental Transaction, or (E) the Company authorizes the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the shares of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
  
 	 
	9
	

	 

  
 iii. Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
  
 Section 4. Transfer of Warrant.
  
 a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
  
 b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
  
 c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
  
 Section 5. Most Favored Nation. If, and whenever on or after the date hereof, the Company consummates a equity financing transaction pursuant to that certain Registration Statement on Form S-1 (File No. 333-267505) or a replacement registration statement (the “Financing”), then (i) the Company shall provide prior written notice thereof to the Holder and (ii) upon consummation of such Financing, the terms and conditions of this Warrant shall be, without any further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of any more favorable terms or conditions (as the case may be) set forth in any warrant or similar instrument issued to any investors in such Financing, provided that upon written notice to the Company, at any time, the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Warrant shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. The provisions of this Section 5 shall apply similarly and equally to each warrant or similar instrument issued to each investor in the Financing.
  
 	 
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 Section 6. Miscellaneous.
  
 a) Currency. All dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”). All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies shall be converted in the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange rate as published in the Wall Street Journal (NY edition) on the relevant date of calculation.
  
 b) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
  
 c) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
  
 d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
  
 e) Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares underlying this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued, and Warrant Shares, delivered, as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares underlying this Warrant, which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
  
 	 
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 Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any shares of Common Stock above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
  
 Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
  
 f) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Exchange Agreement.
  
 g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and if the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state, federal or foreign securities laws.
  
 h) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Exchange Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
  
 i) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Exchange Agreement.
  
 j) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any share of Common Stock or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
  
 	 
	12
	

	 

  
 k) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
  
 l) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
  
 m) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
  
 n) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
  
 o) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
  
 ******************
  
 (Signature Page Follows)
  
 	 
	13
	

	 

  
 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
  
 	  
	 COSMOS HOLDINGS INC.
	  

	  
	  
	  
	  

	 
	 By:
	  
	  

	 
	 Name:
	 Grigorios Siokas
	  

	 
	 Title:
	 Chief Executive Officer
	  

  
 	 
	14
	

	 

  
 EXHIBIT A
  
 NOTICE OF EXERCISE
  
 TO: COSMOS HOLDINGS INC.
  
 (1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
  
 (2) Payment shall take the form of (check applicable box):
  
 ☐ in lawful money of the United States; or
  
 ☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
  
 (3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
  
 ____________________________________________________________
  
 The Warrant Shares shall be delivered to the following DWAC Account Number:
 ____________________________________________________________
  
 ____________________________________________________________
 	 [SIGNATURE OF HOLDER]

  
 	 Name of Investing Entity:                                                                                          

	 Signature of Authorized Signatory of Investing Entity:                                               

	 Name of Authorized Signatory:                                                                                 

	 Title of Authorized Signatory:                                                                                    

	 Date:                                                                                                                       

  
 	 
	 A-1

	

	 

  
 EXHIBIT B
  
 ASSIGNMENT FORM
  
 (To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
  
 FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
  
 	 Name:
	  
	  

	  
	 (Please Print)
	  

	 Address:
	  
	  

	  
	 (Please Print)
	  

	 Phone Number:
	  
	  

	 Email Address:
	  
	  

	 Dated:
	  
	  

	 Holder’s Signature:
	  
	  

	 Holder’s Address:
	  
	  

  
 	 
	 B-1

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